PE Weekly: Carve-Outs and Take-Privates Entice PE Buyers

Private equity firms continue to drive a dealmaking rebound, and this week, PE investors embrace carve-out and take-private deals. Recent transactions that fall into these categories include acquisitions in the clinical services and events spaces. Elsewhere, M&A deals reach private credit, aerospace and defense, and infrastructure.

Platform Investments

Audax Carves Out Clinical Services Business of Avantor. Audax Private Equity has completed its carve-out acquisition of the clinical services business of publicly listed Avantor, a recent press release said. The business has been rebranded as Resonant Clinical Solutions and includes three brands servicing the pharmaceutical, biotechnical, contract research organization and diagnostic laboratory end clients.

Tecum Equity Acquires Kadon Precision and Aerospace. Aerospace and defense manufacturing company Kadon Precision and Aerospace has been acquired by Tecum Equity, an investment firm focused on the precision manufacturing space. A press release said Tecum will grow Kadon through strategic add-on acquisitions that expand the company’s manufacturing capabilities.

Morgan Stanley Backs Flexential. Morgan Stanley Infrastructure Partners, a private investment platform targeting the infrastructure sector, has provided a strategic investment in Flexential, which provides data center solutions. Morgan Stanley joins existing investor GI Partners as a co-control investor driving continued growth for the company.

Truelink to Acquire Events Business GES from Viad Corp. GES, an events industry provider, announced that its parent company Viad Corp has entered into an agreement to sell the business to private equity firm Truelink Capital. The firm expects to close the deal by the end of 2024. The take-private deal includes the acquisition of GES Exhibitions, Spiro, onPeak, SHOWTECh and Visit.

Bear Down Brands Receives Backing from Topspin Partners. Topspin Partners, a lower middle-market private equity firm, has invested in Bear Down Brands. The company develops and markets branded home, health and wellness products. According to an announcement, Bear Down has launched more than 200 SKUs since its founding in 2011.

Wendel Acquires Monroe Capital. European investment firm Wendel is expanding its Asset Management operations with the acquisition of lower middle-market private credit firm Monroe Capital. An announcement said Wendel will take 75% of Monroe Capital and a sponsoring program of $800 million to drive continued growth for the lender.

Eagle Merchant Takes Majority Stake in Concrete Business. Eagle Merchant Partners, a private equity firm that focuses on the franchise, multi-unit and commercial services spaces, has announced its majority acquisition of Sam the Concrete Man, a concrete services franchisor. Eagle Merchant said it aims to expand the company’s geographic footprint and enhance franchisee support services.

HCI Equity Launches Platform with Chicago Partners & Sound Acquisition. HCI Equity Partners, a lower middle-market private equity firm, has launched a new automotive aftermarket distribution platform, Driven Distribution Group. The launch follows the firm’s completion of its acquisition of the auto parts and accessories distribution business of Chicago Parts & Sound.

Vesper Provides Growth Investment to TAO. TAO Digital Solutions, a technology services provider, has announced it received a growth investment from private investment firm Vesper Company. The backing will support TAO’s organic and inorganic growth initiatives, the announcement noted, with services that span product design, development and delivery.

Wendel Group Acquires Majority Stake in Monroe Capital. Wendel Group, a publicly listed investment firm based in Europe, has reached an agreement to acquire a 75% stake in asset management firm Monroe Capital. A press release said Wendel will provide $1 billion for seed capital and GP commitments for current and future Monroe investments. The investment will also support expansion of Monroe’s private credit platform in the U.S.

LLCP to Invest in Online Tutoring Business. Private equity firm Levine Leichtman Capital Partners (LLCP) announced it reached an agreement to invest in Schülerhilfe, a Germany-based provider of on-site and online. Tutoring services. In a statement, LLCP Partner and Head of Europe Josh Kaufman pointed to “favorable tailwinds” in the industry that will support continued growth for the company.

One Equity Acquires IT Services Business Yorktel. One Equity Partners, a middle-market private equity firm, announced this week that it acquired global IT services firm York Telecom Corporation. York services blue-chip enterprise customers and government agencies with a variety of IT solutions, including AI-based monitoring for hybrid work environments.

Add-ons

Close Loop’s Sage Sustainable Acquires Relectro. Relectro, an electronics repair and refurbishment provider, has been acquired by Sage Sustainable Electronics, a press release announced. The investment expands Sage’s existing IT Asset Disposition services with repair capabilities. Sage is a portfolio company of Closed Loop Partners.

Transom Capital’s Artivo Surfaces Acquires Tom Duffy. Artivo Surfaces, a tile and flooring business that is the parent company of Virginia Tile, Galleher and Trinity Hardwood, has announced its acquisition of Tom Duffy Company. Tom Duffy supports Artivo’s expansion in the flooring market, a press release said. Artivo is backed by middle-market private equity firm Transom Capital.

Strategics

Panopto Acquires Elai to Add Text-to-Video Capabilities. Panopto, an AI-powered video creation and management company, has announced the introduction of generative AI text-to-video creation capabilities following its acquisition of Elai. Founded in 2021, Elai offers guided storyboard scriptwriting, avatar-building and other services powered by text-to-video AI technology. Panopto said the investment helps the company address emerging challenges faced by designers and content creators.

Exits

The Riverside Company to Exit PFB Assets to Carlisle Companies. Lower middle-market private equity firm The Riverside Company said in a recent press release that it will exit the insulation products units of portfolio company PFB Corporation. PFB’s Plasti-Fab and Insulspan business units will be acquired by publicly listed Carlisle Companies Incorporated for about $260 million. The transaction is expected to close in the year’s fourth quarter.

Fundraising

L2 Point Management Raises $460 Million. L2 Point Management, a private investment firm, announced the close of its inaugural structured equity fund, L2 Point Opportunities I, L.P. The fund surpassed its initial target and secured about $312 million in capital commitments; along with related co-investment vehicles, the firm’s structured equity strategy has raised a combined $460 million.

Insights

Axle Point Capital Launches to focus on A&D PE. A new private equity firm, Axle Point Capital, has launched, an announcement sent to Middle Market Growth revealed. The firm is focusing on the industrials and business services space, including aerospace and defense, as well as government services, in the lower-middle market. “We see a number of prime A&D investment opportunities, specifically around satellite, space, naval and autonomous technology,” said Gerik Degner, the firm’s managing partner.

Private Equity Drives M&A in TMT Sector: Report. Recent data from S&P Global Market Intelligence finds private equity is leading the dealmaking charge in the technology, media and telecommunications (TMT) sector. Data from the year’s third quarter revealed PE dealmakers drove M&A activity in the space, investing $52 billion in the sector and surpassing investment from strategic acquirers amid heightened regulatory pressures.

Middle Market Growth is produced by the Association for Corporate Growth. To learn more about the organization and how to become a member, visit www.acg.org.