M&A wrap: KKR, Declaration Partners, Carlyle, Apollo, Jack Entertainment, 3i, Huron
KKR & Co. (NYSE: KKR) has gathered more than $2 billion to invest in fast-growing technology companies as it further expands beyond the mega-deals that made its reputation. The firm is raising its second fund dedicated to growth-equity investments in technology, media and telecommunications, according to Bloomberg News. The fund, which is expected to close by year’s end, is about triple the size of the debut vehicle: the KKR Next Generation Technology Growth Fund raised $714 million in 2016. KKR’s fundraising haul comes as big buyout shops are increasingly targeting startups, aiming to bolster returns with faster-growing firms. TPG was one of the first private equity firms to raise an earlier-stage growth fund more than a decade ago, betting on companies such as Airbnb Inc. and Uber Technologies Inc. (NYSE: UBER). KKR invested in companies including cybersecurity firm KnowBe4 Inc., OneStream Software LLC and Lyft Inc. through its first growth fund. Read the full story by Bloomberg: KKR raises more than $2 billion to buy fast growing tech firms.
For more fundraising news, see PE fundraising scorecard: Birch Hill, Clearlake, Meridian.
Declaration Partners, the investment firm backed by the family office of Carlyle Group (Nasdaq: CG) co-founder David Rubenstein, has bought a minority stake in Peacable Street Capital. The latter is a finance company that provides capital to small and mid-sized income-producing real estate in North America. Fried, Frank, Harris, Shriver & Jacobson LLP and Reed Smith LLP advised Peacable. Paul, Weiss, Rifkind, Wharton & Garrison advised Declaration.
Real estate investment firm VICI Properties Inc. (NYSE: VICI) is buying the real estate assets of Jack Cleveland Casino and Jack Thistledown Racino from Jack Entertainment for $843 million. Jack will lease the properties back and will continue to operate them. "Ohio continues to be one of the healthiest and fastest growing regional gaming markets and we are thrilled to add high-quality, urban real estate to our portfolio at an attractive capitalization rate," says VICI chief operating officer John Payne.
Apollo Global Management Inc. (NYSE: APO) is doubling down on its investment in Athene Holding Ltd., increasing its stake to 35 percent and deepening the ties between the two firms. Apollo will acquire approximately 35.5 million common shares of Athene for about $1.55 billion, the companies said in a statement. Athene will also purchase a 7 percent equity stake in Apollo. The two firms are using a stock swap for the deal. Read the full story by Bloomberg News: Apollo doubles down on Athene stake.
3i-backed Regional Rail is buying Pinsly Railroad Co.'s Florida operations from the Surface Transportation Board.
Granite Creek Capital Partners and Red Arts Capital have acquired logistics and transportation company Sunset Pacific Transportation.
Huron Capital-backed Xlerate Group has acquired Columbus Fair Auto Auction, which operates a car auction along with body and repair auto shop in Ohio.
For more deal news, see Weekly wrap: Houlihan Lokey, Movista, Platinum.
Overall M&A activity in the third quarter saw $600 billion worth of deals closed, according to PitchBoook. So far in 2019, more than 8,000 deals have closed, worth about $1.6 trillion. The activity is on pace with the first three quarters of 2018. Among the deals that closed include: Cox Automotive's purchase of Rivian Automotive; TPG Sixth St Partners' deal for Smartdrive Systems and Boathouse Capital backing TapClicks. Read the full story: Key middle-market M&A deals completed in Q3 2019
The private equity model has held up very well over the decades, continuing to outperform the public markets, even as economic cycles come and go. But the rate of growth has slowed, leading PE firms to seek adjacent areas of business to expand. As PE firms face increased pressure to produce higher returns on their investments, many of them are turning to a familiar area of business: lending. Adams Street Partners, Balance Point Capital, Carlyle and VSS are all actively engaged in lending. Read the full story: Private equity firms are becoming lenders. Here’s why.
It’s a milestone year for the Blackstone Group Inc. (NYSE: BX), which transitioned from a publicly traded partnership to a corporation on July 1. The New York firm announced the final close of its latest global real estate fund recently. With $20.5 billion of total capital commitments, Blackstone Real Estate Partners IX is the largest real estate fund ever raised. Mergers & Acquisitions spoke with Stephen A. Schwarzman, the firm’s co-founder, chairman and CEO. Read the full story: "Complete control" is the beauty of private equity, says Blackstone's Stephen A. Schwarzman.
Bank M&A has been soaring, creating the perfect backdrop for Piper Jaffray’s announced acquisition of Sandler O’Neill & Partners LP. “There has been a lot of consolidation in the bank space,” Piper Jaffray CEO Chad Abraham told Mergers & Acquisitions. “But there are still 5,000 banks, and we expect the pace of consolidation to continue.” For analysis of the deal, see Counting on bank M&A: Why Piper Jaffray bought Sandler O'Neill.
Looking for a glimpse of what’s to come in the private equity industry? Meet Mergers & Acquisitions' 2019 Rising Stars of Private Equity. As the PE industry undergoes a generational shift, and many firm founders retire, it’s well worth getting to know these emerging leaders, including Branford's Austin Collier, Sterling Partners' Shawn Domanic and Summit Partners' Sophia Popova. For profiles and video interviews, see Meet Mergers & Acquisitions' 2019 Rising Stars of Private Equity. For Q&As, see 10 Rising Stars of Private Equity tell their tales.
To celebrate deals, dealmakers and dealmaking firms, Mergers & Acquisitions produces three special reports every year: the M&A Mid-Market Awards; the Rising Stars of Private Equity; and the Most Influential Women in Mid-Market M&A. For more on the timeline and nomination process for each, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.
The Institute of International Education holds its 2019 IIE Centennial Gala at the Pierre in New York Oct. 30. The Gala honors Martin Lipton, founding partner of Wachtell, Lipton, Rosen & Katz law firm, with the IIE Stephen P. Duggan Award for Mutual Understanding.
ACG Boston hosts The 2nd annual Healthcare Conference – Improving the Patient Experience - on Nov. 6 at the UMass Club in Boston, as a part of the ACG Northeast Industry Tour. Speakers include Mergers & Acquisitions editor-in-chief Mary Kathleen Flynn, who is moderating a panel.
ACG Charlotte brings M&A pros together for Deal Crawl at the Mint Museum in Charlotte, North Carolina, Nov. 6-7.
The Third Annual Women in Alternative Investments Career Forum is taking place at the New York Hilton on Nov. 8.
ACG New York is hosting Middle Market Week in New York from Nov. 11-15. The 17th Annual Private Equity Wine Tasting Gala takes place on Nov. 13 at Gotham Hall.
Exponent Women is hosting a Family Office Event with Owens Group at LX Gallery in New York on Nov. 21. Mergers & Acquisitions editor-in-chief Mary Kathleen Flynn is moderating a panel.