PE Weekly: Platform Deals, Fundraising Signal Dealmaker Optimism for H2

There has been talk for some time now of an anticipated rebound in M&A activity. Yet as interest rates remain high and market uncertainty persists, dealmakers seem to still be tepid about transacting. Even so, this week’s news is cause for optimism: M&A activity is dominated by platform transactions at a time when add-on acquisitions have been more prevalent as a result of unfavorable market conditions. Plus, a string of fundraising reveals more evidence that dealmakers have high hopes for the future.

Platform Investments and Acquisitions

BlackRock to Acquire Preqin. Preqin, a leading private markets data solutions provider, is set to be acquired by BlackRock for about $3.2 billion, according to a recent press release. The transaction heightens the capabilities of BlackRock’s private markets operations by combining Preqin’s data and research solutions with Aladdin’s workflow capabilities on a single platform.

Swander Pace Invests in Inovata Foods. Private equity firm Swander Pace Capital announced its partnership with Inovata Foods, which manufactures private label frozen entrees. Inovata operates out of two facilities in Canada, servicing customers in both Canada and the U.S. The investment from Swander Pace will support the company’s efforts to expand capacity, a press release said.

Good Springs Invests in Kimbel Mechanical Systems. Good Springs Capital, a private equity firm focused on the industrial and services sectors, announced its investment in Kimbel Mechanical Systems this week. Kymbel is a mechanical contractor servicing single-family homebuilders and multi-family residential project developers, offering plumbing, HVAC and electrical installation services.

LLCP Acquires NSL Analytical Services. Private equity firm Levine Leichtman Capital Partners (LLCP) has invested in NSL Analytical Services, according to a recent press release. NSL is a materials testing provider servicing highly-regulated and technologically advanced end-markets including the aerospace and defense, electronics and other sectors.

Aurora Capital Acquires First Legal. Aurora Capital partners, a middle-market private equity firm, announced its acquisition of First Legal in a press release this week. First Legal provides tech-enabled outsourced litigation support services. The investment marks the eleventh acquisition from Aurora Equity Partners VI.

Pacific Avenue Closes KiddeFenwal Acquisition. Middle-market private equity firm Pacific Avenue Capital Partners announced the close of its acquisition of KiddeFenwal, a designer and manufacturer of industrial and commercial fire suppression systems. The investment will support KiddeFenwal’s growth in the U.S. and globally, a press release noted, through customer diversification and product innovation.

Exits

Nokia to Exit Submarine Networks Business to French State. B2B technology company Nokia announced that it has entered into an agreement to sell off ASN, its submarine networks business. The French State will acquire the assets for about $375 million. ASN is an installer of optical submarine cable and providers turnkey undersea transmission systems for a variety of applications, including telecom.

Fundraising

Ardian Raises $3.2 Billion for Co-Investment Platform. Private investment house Ardian announced this week that it has raised $3.2 billion for its co-investment platform, Co-Investment Fund VI. The fundraise marks a 23% increase in commitments from the prior fifth fund. The strategy focuses on co-investments, providing access to minority investments alongside private equity investors.

Lee Equity partners Raises $1.3 Billion for Fund IV. Middle-market private equity firm Lee Equity Partners has raised $1.3 billion for Fund IV, surpassing its initial $1 billion target. The fund continues the firm’s middle-market investment strategy, which focuses on the financial and healthcare services space. The fundraise follows Lee’s acquisition of insurance broker Axis Insurance last month.

American Discovery Raises $190 Million for Fund II. American Discovery Capital, a merchant bank focused on the lower-middle market, has closed its second fund with $190 million in capital commitments. American Discover Fund II raised three-times more than the firm’s first fund, and will continue the firm’s investment strategy of pursuing majority and minority investments in the business services and software sectors.

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.