PE Weekly: Wells, abrdn Divest PE Assets

Private equity investors are seeing some ownership moves this week as Wells Fargo and abrdn both sell their PE assets. Other transactions span financial and business services, including deals in eProcurement and small business financing, while technology finds its way into this week’s M&A roundup, too.

Platform Investments

HighVista Strategies Acquires abrdn’s Private Markets Business. HighVista Strategies, an alternative asset manager that invests in both the private and public markets, has completed its acquisition of the U.S. private market business of investment firm arbrdn. The transaction includes abrdn’s U.S. private equity and venture capital assets, a “strategic” investment for HighVista that “further solidifies our well-differentiated investment capabilities,” stated HighVista Strategics CIO, co-founder and partner André Perold.

Capstreet Acquires eProcurement Software Company. Lower middle-market private equity firm Capstreet has invested in eProcurement software business PlanetBids, according to an announcement. PlanetBids provides a Software-as-a-Service solution that facilitates electronic procurement workflows for public and private organizations. Capstreet said it plans to grow the business by expanding its team and identifying new opportunities to broaden PlanetBids’ technology capabilities and geographic reach.

Frontier Growth, PE Backers Join Accredible’s Series B Round. Middle-market software investor Frontier Growth has led the Series B investment round of digital credentialing platform Accredible, according to a recent press release. Joining the round was private equity firm The Stephens Group, as well as PivotNorth and Uncork Capital. Accredible said it will use the latest funding to invest in product innovation.

Kelso & Company Collaborates on Infrastructure Platform. Kelso & Company, a middle-market buyout private equity firm, has collaborated to launch a new platform, Armada Materials. Launched alongside Rob Duke, who will serve as the platform’s CEO, as well as a group of additional investors, the platform will build an infrastructure materials and services business through strategic add-on acquisitions, the announcement noted. The platform has already invested in Volunteer Materials and its affiliate companies.

VSS Capital Launches Clinical Research Platform. VSS Capital Partners, a private equity firm focused on the healthcare, education and business services sectors, announced is growth capital investment in Eximia Research Network, a clinical trial research business servicing the pharmaceutical and biotech spaces. The investment forms a platform following Eximia’s acquisition of Sundance Clinical Research, and aims to support the acceleration drug approvals, according to a press release.

Unity Partners Acquires Pool Services Company. Unity Partners, a middle-market investment firm, has announced its majority investment in pool services company Poolie. According to a press release, Austin-based Poolie offers pool cleaning, repair and renovation services, and plans to expand its geographic footprint with Unity Partners’ support. The business will also launch a Purpose Plan, which facilitates employee ownership in the company, in alignment with Unity Partners’ strategy of building employee ownership into platform investments.

Add-Ons

Lee Equity and Twin Point Platform Acquires Wireless Tech Business. Alliance US Holdings, a platform company backed by private equity firms Lee Equity Partners and Twin Point Capital, has announced its latest acquisition. The company, which already owns wireless communications distributors Alliance Corporation, GetWireless and TESSCO Technologies, has acquired DiscountCell. The investment supports the platform’s efforts to strengthen its position in the value-added reseller channel space, a press release noted.

Southfield Capital’s Milrose Consultants Adds Eighths and Ninth Acquisitions. Milrose Consultants, a building compliance solution provider and portfolio company of lower middle-market private equity firm Southfield Capital, has announced its eighth and ninth add-on acquisitions. The company has invested in municipal permitting and zoning consulting firm JM Zoning as well as permit expediting firm Project Expediters Consulting Corp. In a statement, Southfield Principal Chris Grambling said the investments diversifies Milrose’s end markets.

Solace Capital’s Fabcon Precast Acquires Manufacturer. Fabcon Precast, a provider of structural precast wall panels, has acquired the precast division of The Bristol Group, a manufacturer of engineered precast and prestressed concrete products, according to a press release. Fabcon is a portfolio company of Solace Capital Partners, a middle-market private equity firm. Its investment expands its geographic footprint to the Mid-South market.

Strategics

Paychex Acquires Alterna Capital Solutions from Alterna Equity. Lower middle-market private equity firm Alterna Equity Partners has exited its portfolio company Alterna Capital Solutions to payroll solutions company Paychex, according to a press release. Alterna Capital Solutions provides small business financing solutions including invoice financing, asset-based lines of credit and other products. The transaction closed on July 31, 2023, the announcement noted.

Halifax Acquires Home Healthcare Assets from Sodexo. The Halifax Group, a middle-market private equity firm, has announced its acquisition of the home care division of Sodexo, a food services business. According to an announcement, Halifax will acquire Worldwide Home Care, a home healthcare business that Sodexo formed in 2009 following its acquisition of Comfort Keepers. The division operate across eight countries.

Krispy Kreme to Offload Insomnia Cookies. Doughnut company Krispy Kreme is reportedly exploring a sale of its Insomnia Cookies unit in an effort to refocus on its doughnut operations, reports in Reuters said this week. Krispy Kreme acquired a majority stake in Insomnia in 2018. Reports noted that the expected divestiture follows other M&A activity in the packaged foods space, including Campbell Soup’s acquisition of Sovos Brands and J.M. Smucker’s acquisition of Hostess Brands.

Exits

Wells Fargo Exits the Private Equity Space. Wells Fargo & Company has announced the sale of approximately $2 billion of private equity investments as the financial institution refocuses operations on its core businesses. Wells had previously been the sole institutional limited partner in the Norwest Equity Partners and Norwest Mezzanine Partners funds, a press release noted. Carlyle subsidiary AlpInvest Partners, Atalya Capital Management, Lexington Partners and Pantheon made up the buyer group.

Grove Mountain Exits Paving Business. Grove Mountain Partners, a middle-market private equity firm focused on the home services sector, has announced its exit of its Central States Paving and Concrete platform to Pave America. Central States was formed following the firm’s acquisition of four businesses beginning in December 2021.

Fundraising

Kelso & Company Raises $3.25 Billion. Middle-market private equity firm Kelso & Company has announced the close of its latest fund, Kelso Investment Associates XI, with $3.25 billion in capital commitments. Kelso partners and employees represent a general partner commitment of more than 12%, continuing its alignment with limited partners, the announcement noted.

Insights

European PE Investors Lengthen Holding Periods: S&P. New analysis from S&P Global Market Intelligence finds that European private equity investors are lengthening the holding periods of their portfolio companies, an expected trend amid a slowdown of IPOs and M&A activity overall. Analysts found that PE firms’ holding period increased to an average of 5.89 years in the 2023 fiscal year through Sept. 1, up from 5.62 years in 2022.

Align Capital Launches Independent Sponsor-Focused Strategy. Growth-oriented private equity firm Align Capital Partners announced this week the launch of its independent sponsor-focused private equity strategy, dubbed Align Collaborate. The initiative follows the firm’s partnership with independent sponsor investors Grant Kornman and Michael Kornman. “Align Collaborate’s goal is to be a collaborative equity partner that offers strong strategic and financial alignment to each prospective independent sponsor relationship,” the firm’s announcement stated.

Life Sciences Businesses Collaborate to Drive M&A. A new partnership among more than 30 life sciences organizations has formed to promote innovation through mergers and acquisitions, an announcement revealed this week. The Partnership for the U.S. Life Science Ecosystem (PULSE) aims to advance next-generation treatments and cures through M&A. In response to Federal Trade Commission initiatives PULSE considers obstructive to life sciences advancement, the partnership “will collectively highlight the importance of shared efficiencies and expertise that companies leverage across the development process through M&A to make sure patients receive lifesaving treatments as quickly as possible,” the announcement said.

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