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Trade sales pick up as IPO exits plunge; deal value hits 12-month low in July

S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.

Private equity and venture capital exits were down across the board in North America through the first half of the year, but sales to strategic buyers remained relatively robust amid the wider decline.

Private equity-involved trade sales were down 21% year over year to $12.73 billion through June 30, according to S&P Global Market Intelligence data. Exits via secondary sales fell quite a bit further down 45% year over year for that same period and private equity-backed IPOs essentially disappeared from the major U.S. exchanges during the first two quarters of 2022.

All in all, the total value of private equity exits plunged 47% in the first half of the year compared to the first six months of 2021, which would end up being a record year for private equity exits globally. That stark falloff makes trade sale activity look robust by comparison.

Pete Witte, global private equity lead analyst for EY, suggested a couple of possible explanations for the relative strength of trade sales, which hit $11.10 billion in value in the second quarter, their highest total in at least six quarters.

One reason is that it just takes time to conclude a sale. Deals that closed in the second quarter may have been initiated months earlier, before market volatility raised urgent questions about valuations.

Read more about exit activity in the first half of the year.

CHART OF THE WEEK: Deal activity falls to lowest levels in a year

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⮞ Private equity deal value and volume worldwide both slid to a 12-month low in July.

⮞ Deal value declined 63% in July to $43.05 billion compared to the same month in 2021, and the 1,579 transactions represented a year-over-year decline of about 29%.

⮞ Private equity and venture capital firms were most active in the Asia-Pacific region, closing 554 deals with an announced value of $17.28 billion.

FUNDRAISING AND DEALS

* Thoma Bravo LP sold Barracuda Networks Inc., a cybersecurity solutions provider, to KKR & Co. Inc.

* Thoma Bravo also closed the acquisition of SailPoint Technologies Holdings Inc., an enterprise identity security company, in an all-cash deal valued at about $6.9 billion. Separately, Thoma Bravo completed the purchase of Mercell Holding ASA, a Norwegian e-tendering and procurement systems company.

* BlackRock Inc. led a $550 million funding round for Miami-based cruise company Virgin Voyages, Dow Jones Newswires’ MarketWatch reported. Existing investors including Bain Capital Pvt. Equity LP and Virgin Group also participated in the round.

* Crestview Partners LP made a significant capital infusion into broadband distributor and reseller Digicomm International Inc.

* J.F. Lehman & Co. sold its portfolio company Lone Star Disposal LP, a solid waste disposal specialist, to Waste Connections Inc.

* CVC Capital Partners Ltd.’s CVC Growth Funds agreed to sell a significant minority stake in VelocityEHS to Partners Group. VelocityEHS provides a software platform for environmental, health and safety, and environmental, social and governance.

* Thompson Street Capital Partners closed its sixth fund, Thompson Street Capital Partners VI LP, with more than $1.5 billion in capital commitments.

* BankTech Ventures LP raised more than $115 million in commitments at the close of its first namesake fund, Banktech Ventures LP.

FOCUS ON: ENERGY

* A joint venture of KKR-managed infrastructure funds and Pembina Pipeline Corp. acquired a 51% majority stake in Energy Transfer Canada ULC from Energy Transfer LP for US$265.7 million.

* Thailand-based Ratch Group PCL will acquire Nexif Energy’s portfolio of Australian and Southeast Asian energy assets from Denham Capital Management LP and Nexif.

* Apollo Global Management Inc. and New Fortress Energy Inc. closed their $2 billion liquefied natural gas maritime joint venture, creating a platform known as Energos Infrastructure. The platform, which owns and operates 11 liquefied natural gas infrastructure vessels, is about 80% owned by Apollo funds and 20% by New Fortress.

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