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KKR snaps up UK infrastructure investor John Laing in £2bn deal

John Laing board to unanimously recommend KKR’s offer to shareholders to take firm private.

The private-equity firm KKR has agreed to buy the UK infrastructure investor John Laing, which has stakes in Alder Hey children’s hospital in Liverpool and a retirement homebuilding project with McCarthy & Stone, in a deal valued at about £2bn.

The takeover values the London-listed firm at 403p a share, which represents a 27% premium on the closing price of John Laing stock on 5 May, the day before it confirmed it was in talks with KKR.

John Laing has invested in more than 150 projects and businesses since it was founded, across a range of sectors including transport and energy.

The firm, which was floated in February 2015, owns assets including schools, hospitals and infrastructure predominantly in the US and Australia as well as in Europe.

The investor was involved in the 2013 redevelopment of Alder Hey, which was funded through a private finance initiative, and as a result still holds a 40% stake in the hospital.

John Laing said its board intended to unanimously recommend KKR’s offer to its shareholders to take the firm private, adding that it represented a fair and reasonable value for the company.

KKR has also proposed a £175m cash injection into John Laing’s pension fund, accompanied by a further £50m in 18 months.

John Laing’s shares rose by 11% in morning trading on Wednesday, to 402p, just below the offer price.


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Private equity brushes off past club deal woes with $34B Medline buyout

Private equity’s biggest guns are once again showing they can have record-setting buyout firepower when they work as a team.

After recently backing away from so-called club deals that bring together multiple firms, the industry now has its largest acquisition in years. The Carlyle Group and Hellman & Friedman have joined forces to acquire Medline in a deal reportedly worth around $34 billion, including debt.

The deal comes after US private equity firms amassed approximately $721 billion in dry powder as of June 30, 2020 following years of record fundraising outputs. And it may signal that club deals involving multiple buyout shops have returned after they fell out of favor following a series of high-profile flops.

The Medline deal also marks the largest private equity buyout by value in at least a decade, according to PitchBook data. So far in 2021, private equity firms have struck 13 deals in the US worth $5 billion or more, surpassing last year’s total of 11.


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Advent eyes $1B fund as PE continues its push into tech

Advent International has launched its first tech-focused vehicle with a target of $1 billion, according to Buyouts, becoming the latest major private equity firm to indicate an increasing appetite for tech deals.

The news comes about seven weeks after Bryan Taylor joined Advent as a managing partner and leader of the firm’s tech investment team. Taylor’s hiring coincided with the opening of a new office in the Bay Area, part of what an Advent press release at the time described as the firm “deepening its commitment to the technology sector.” Most recently, Taylor was the co-head of the tech group at TPG Capital, where he helped lead a team of 20; Advent’s tech group currently has more than a dozen employees across North America and Europe.

Reports of the debut tech vehicle also come as Advent is in the midst of another major fundraising effort. Public LP documents from earlier this month showed the firm has begun gathering commitments for its ninth flagship buyout fund, which reports from last autumn indicated could target at least $13 billion. That would equal the sum Advent raised for its prior flagship fund, which hit a $13 billion hard cap in 2016.

Earlier this week, another private equity investor formed a new fund focused on the tech space, albeit a very specific slice of it: Caisse de dépôt et placement du Québec unveiled its CDPQ-AI Fund, a $250 million pool that will be put to use backing companies from Québec with “a proven track record in artificial intelligence.”

Across the entire private equity landscape, firms are raising more cash for tech investments. At the end of January, buyout giant The Carlyle Group closed its latest European tech fund—which will also be deployed in the US—on €1.35 billion (about $1.5 billion), a serious increase from a 2015 predecessor that brought in €656.5 million. Carlyle’s close came a mere two days after Thoma Bravo, a longtime specialist in the tech space, wrapped up a $12.6 billion mega-fund, one of the largest vehicles ever that will mainly target tech companies.

In each of the past four years, there has been an increase in the percentage of overall PE investments in the US and Europe taking place in the IT space. During 2019, though, the numbers are full-on booming. More than 22% of completed deals so far this year have been in IT, per the PitchBook Platform, a major jump from last year’s 18% rate and a whole different universe from the 13% clip logged as recently as 2015. For years, the B2C space ranked second only to B2B in drawing the most PE deals; now, it seems IT has clearly overtaken B2C as the No. 2 choice.

And while Advent may be among those contributing to that change, tech deals are far from the Boston-based firm’s only focus. In March alone, Advent has been linked to a dizzying array of potential billion-dollar deals. The firm agreed to buy German chemicals company Evonik for €3 billion, while a potential €1.8 billion buyout of Italian debt provider Cerved fell apart after news of ongoing negotiations leaked to the press. Advent has also been among a host of firms named as possible buyers in a handful of very expensive auctions, including ongoing sale processes for Bayer‘s animal health unit, the skin health unit of Nestlé, and Kantar, a data analysis business owned by WPP.


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What’s next for European PE when the taps are dry and a recession looms?

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Is Genstar Capital The Next Private Equity Powerhouse?

Predicting the future is a difficult thing, as private equity investors know all too well. But if the recent past is any indication, Genstar Capital could be on the verge of assuming a starring role on the industry’s stage.

First, there’s the fundraising. Genstar closed its latest flagship buyout fund on $3.95 billion last year, which represented a nearly 100% increase from its previous effort, a $2.1 billion pool from 2015. That vehicle was in turn more than 100% larger than its predecessor. If Genstar keeps doubling the size of its funds—which is admittedly a tall proposition—it won’t be long before those vehicles are among the largest in private equity.

And then there are the deals. Genstar completed 24 investments during 1Q, according to PitchBook data, more than any other PE firm in the US. That continues a recent flurry of activity: Genstar has executed nearly 150 transactions since the start of 2016, more than in the previous nine years combined:

What kinds of deals are driving this rapid rise? Who are the firm’s key decision-makers? And where did Genstar come from?

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Esure Founder to Make £360Million

Esure founder Sir Peter Wood will make more than £360m from selling the insurance group to private equity firm Bain Capital in a £1.2bn deal.

Shares in the company, which owns Sheilas’ Wheels and GoCompare, shot up more than 30 per cent on Monday after the firm revealed it was in talks with US-based Bain.

The unsolicited bid of 280p per share represents a premium of 37 per cent on the share price before the offer was made. However, it is below the float price of 290p when it launched on the London Stock Exchange in 2013.

If the deal completes, esure will become a private company and its shares will no longer be traded on the stock market.

Sir Peter, who holds approximately 30.69 per cent of esure’s stock, will receive around £368m, but has also pledged to reinvest £50m in the business.

He will also continue as chairman of the firm – Bain said that due to his “extensive experience in the insurance sector and track record of driving growth and profitability at esure”, Sir Peter’s ongoing participation was “an important element of the offer”.

Sir Peter, who pocketed £198m when esure first floated three years ago, said the deal was “a great outcome for shareholders, for the company, and for customers”.

“As a private company and with Bain Capital’s backing, esure will be able to invest behind the innovation required to fully realise the opportunities in this market,” he added.

Robin Marshall, managing director and co-head of Bain Capital Europe, said: “Sir Peter Wood is a towering figure in the industry and we would be delighted to be able to take the company that he and his team have built to the next level. We are excited that he will remain a minority shareholder in the company and also grateful that he will remain as Chairman to facilitate a smooth transition to private ownership.”

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