PE Weekly: Drone Racing League Acquired, Sterling Raises $3.5 Billion

While middle-market M&A volume may be picking up as quickly or dramatically as dealmakers may have hoped, fundraising news continues to draw optimism into the dealmaking community. This week, The Sterling Group was one firm that announced a new private equity fund, but it wasn’t the only. Plus, M&A activity reaches crypto trading, logistics and the Drone Racing League. Read more below.

Platform Investments and Acquisitions

Infinite Reality Acquires Drone Racing League. Infinite Reality, a company that creates immersive AI-powered experiences, has acquired the Drone Racing League in a deal worth $250 million, according to a press release. The investment expands Infinite Reality’s valuation to $3.5 billion and will augment its ability to enhance audience experiences of sports and entertainment programming and events.

Grain Management Acquires 123NET. Global investment firm Grain Management, which focuses on broadband and digital infrastructure investments, announced this week its acquisition of 123NET, a fiber internet and business voice services provider. Based in Michigan, 123NET plans to use the backing from Grain to expand its AI-powered data centers.

Add-Ons

Bank-Backed Talos Acquires Cloudwall. Digital asset trading platform Talos has acquired Cloudwall, a digital asset risk technology developer, according to a recent press release. Talos is backed by several investors, including banks Citi, Wells Fargo and BNY Mellon. In a statement, Talos CEO and cofounder Anton Katz said the company’s acquisition of Cloudwall broadens its portfolio management capabilities.

Allied Industrial’s Celebrity Coaches Acquires Moonstruck Leasing. Celebrity Coaches, a provider of transportation and logistics for the live events and entertainment sector, has acquired Moonstruck Leasing just months after joining the Allied Industrial Partners portfolio. Moonstruck is an entertainment coach leasing company and expands Celebrity’s existing fleet. The transaction marks Celebrity’s first bolt-on acquisition since being acquired by Allied Industrial in March.

Godspeed Capital’s ICE Acquires IDCUS. Transportation-focused engineering and consulting services platform ICE USA, backed by lower middle-market defense and government services private equity firm Godspeed Capital Management, has acquired IDCUS Inc., according to a press release. IDCUS is a professional services, civil engineering and consulting firm specializing in public infrastructure development for transportation customers.

Exits

Staples Exits DEX Imaging to Gamut Capital. Gamut Capital Management, a middle-market private equity firm based in New York, is acquiring DEX Imaging from its previous owner, Staples. DEX, which provides managed print services, was acquired by Staples in 2019 and has since grown organically and through M&A.

LLCP Exits Tropical Smoothie Café. Private equity firm Levine Leichtman Capital Partners (LLCP) announced this week the sale of TCS Intermediate, also known as Tropical Smoothie Cafe, to Blackstone, a franchisor of fast casual restaurants across 44 states. LLCP first invested in the company in September 2020.

Fundraising

Sterling Raises $3.5 Billion for Sixth PE Fund. The Sterling Group has announced the close of Sterling Group Partners VI at its hard cap of $3.5 billion, the firm said in a press release, exceeding its initial target of $2.75 billion. The private equity fund will focus on corporate carveouts in the industrials sector.

GEF Capital Closes First U.S. Climate Change Fund. Private equity firm GEF Capital Partners, which focuses on climate change, announced the close of its first U.S. fund, GEF US Climate Solutions Fund II. The firm secured $325 million in capital commitments, exceeding its $250 million target. GEF Capital will use the fund to invest in lower middle-market companies in the U.S. and Canada within the climate change and pollution remediation solution space.

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.