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AMERICAS
Privately held steel company Esmark said on August 23 that it would not participate in the purchase process for US Steel and respect the position of the United Steel Workers union, which is supporting Cleveland-Cliffs' offer, Reuters reported.
Esmark offered to buy US Steel for $35 per share, or an equity value of $7.8bn. Esmark's exit leaves Arcelor-Mittal as the only known potential challenger to Cleveland-Cliffs, which went public with its bid for US Steel earlier in August. USW, which has asserted itself aggressively in the bidding battle, had said the union would not endorse any buyers other than Cleveland-Cliffs. However, US Steel said its labor agreement with USW does not afford the union the right to veto a sale of the company.
APRINOIA Therapeutics, a clinical-stage biotechnology company focused on neurodegenerative diseases, and Ross Acquisition II, a special purpose acquisition company, mutually terminated the $280m merger.
The parties entered into a Termination Agreement on August 21, 2023, which is effective immediately and contains mutual releases for claims and liabilities.
Trive-backed Forward Slope, a technology services company providing software and surveillance solutions to the defense industry, completed the acquisition of SoarTech, a software company. Financial terms were not disclosed.
"Through our 15-year history of partnering with Forward Slope to solve customer challenges, we have developed a deep understanding and appreciation of their complementary expertise in developing software solutions. The combined set of capabilities, talented teams and cultural alignment gave us conviction that a partnership with Forward Slope was an ideal next chapter for SoarTech. We believe that joining forces with Forward Slope will accelerate opportunities for SoarTech and allow us to solve complex DOD challenges in an agile way," Mike van Lent, SoarTech Chief Executive Officer.
SoarTech was advised by KippsDeSanto & Co and Pillsbury Winthrop Shaw Pittman. Trive Capital was advised by Haynes and Boone.
Roark Capital, a private equity firm, agreed to acquire Subway, a quick service restaurant brand. Financial terms were not disclosed.
"This transaction reflects Subway's long-term growth potential, and the substantial value of our brand and our franchisees around the world. Subway has a bright future with Roark, and we are committed to continuing to focus on a win-win-win approach for our franchisees, our guests and our employees," John Chidsey, Subway CEO.
Subway is advised by JP Morgan and Sullivan & Cromwell (led by Frank Aquila and Melissa Sawyer). Roark is advised by Morgan Stanley.
Pan Management, an energy investment firm, completed the acquisition of Northwoods Management, a firm that owns highly productive assets located in the Powder River Basin. Financial terms were not disclosed.
“We consider this acquisition to be a pivotal move for OneRock, solidifying our position with a robust presence in resource-rich unconventional plays. It represents a crucial component of our growth strategy into the E&P business, while concurrently expanding our commodity optionality and seamlessly aligning with Pan Management’s overarching investment strategy. We anticipate leveraging the OneRock platform to acquire further assets and strategically expand our footprint," Daniel Fan, Pan Management Partner and Head of North American E&P Investments.
Pan Management was advised by Willkie Farr & Gallagher (led by Tan Lu and Brad Honeycutt). Northwoods Management was advised by Houlihan Lokey.
Deltek, a global provider of software and solutions for project-based businesses, completed the acquisition Replicon, a software developer. Financial terms were not disclosed.
"We are very excited to complete this acquisition – one of the largest in Deltek's history – and welcome Replicon into the Deltek family. Just like Deltek, the Replicon team is dedicated to project-based businesses with a specific focus on customers, collaboration and innovation. With the combination of our two companies, we now have new and expanded capabilities to offer project and service-centric organizations globally. We look forward to the many new opportunities this acquisition brings to Deltek Project Nation, including those with Replicon customers and partners," Mike Corkery, Deltek President and CEO.
ENGIE, a multinational utility company, agreed to acquire Broad Reach Power, a company specialized in battery storage, from Apollo and EnCap, two private equity funds, for $1.6bn.
"This acquisition is fully in line with ENGIE's strategy: it will contribute to the development of a low-carbon, affordable and resilient energy system where flexible assets will play a critical role alongside renewables,” Catherine MacGregor, ENGIE CEO.
Clearhaven Partners-backed Engageware, a cloud-based customer engagement software, completed the acquisition of Aivo, a company that develops artificial intelligence solutions with the aim of transforming the way companies and customers interact. Financial terms were not disclosed.
"We are thrilled to welcome Aivo to the Engageware family. It is essential that organizations leverage technology to improve customer experiences, drive operational efficiency, automate customer service, and reduce workload for call center employees. In a world where consumers have become accustomed to fast-paced, on-demand services, they expect immediate access to pertinent information and instant responses to their inquiries. By integrating Aivo’s products into Engageware’s customer engagement platform, we help organizations deliver accurate and instantaneous information to their customers, no matter the channel," Nina Vellayan, Engageware CEO.
SHEIN, an online fast fashion retailer, agreed to acquire a 33% stake in SPARC Group, a retail company with an extensive brand portfolio spanning fashion, accessories, and lifestyle products. Financial terms were not disclosed.
"SHEIN is thrilled to have SPARC Group as a partner and minority shareholder and we look forward to finding new ways to delight our customers through the potential of this partnership. The powerful combination of Simon's leadership in physical retail, Authentic's brand development expertise, and SHEIN's on-demand model will help us drive scalable growth and together make fashion more accessible to all," Donald Tang, SHEIN Chairman.
Ravago Group, a polymer recycling and distribution company, agreed to acquire a majority stake in M. Holland, an international distributor of thermoplastic resins and ancillary materials. Financial terms were not disclosed.
The M. Holland Company is expected to continue its more than 70 years as an independent international distributor of thermoplastic resins, providing suppliers with strategic channels to market, and customers with innovative product and supply chain solutions.
Citi, a banking partner for institutions with cross-border needs, completed the investment in Rextie, a fintech company for FX services. Financial terms were not disclosed.
“Rextie’s founders have created a high growth business, with proven product-market fit and strong foundation of repeat clients. We are excited to invest in a company that’s participating in a very dynamic market in Peru,” Aldo Alvarez, Citi Lead for LatAm Strategic Investments.
Hedge funds, PE firms hit with new SEC fee disclosure rules.
Hedge funds and private equity firms will have to disclose more about their fees and face new restrictions from the US Securities and Exchange Commission on giving investors special treatment. The rules adopted on August 23 will require private funds to detail quarterly fees and expenses to investors, Bloomberg reported.
Firms also will be prohibited from allowing some favored investors to cash out more easily than others — unless those deals are offered to all fund investors. It's the latest bid by the SEC under Chair Gary Gensler to tighten its grip on the fast-growing, multitrillion-dollar industry.
Private credit lends $574m for Standish stake sale to THL. (FS)
Private credit lenders are providing a $574m debt package to help finance Thomas H. Lee Partners' acquisition of a majority stake in Standish Management, Bloomberg reported.
Private equity firm THL agreed in July to buy a majority stake in Standish Management in a deal that values the company at around $1.6bn, including debt. Firms, including HPS Investment Partners, Neuberger Berman, and Stone Point Capital, are part of the financing. The debt consists of a $459m first-lien term loan, a $50m delayed-draw term loan, and a $65m revolving credit facility.
Cboe CEO says the firm can go after deals in open jurisdictions.
Exchange operator Cboe Global Markets can do future acquisitions and expand its global presence as long as the firm maintains a "flexible balance sheet," Bloomberg reported.
"There is nothing we have to do. We like to be in jurisdictions that are open to competition, and we like to be there in scale. That's really where our acquisitions have been in the past," Edward Tilly, Cboe Global Markets CEO.
KKR's latest bankruptcy deal is a bad omen for lenders. (FS)
As corporate failures surge this year, debt investors are in a fight to salvage as much money as they can from the wreckage. The early skirmishes are going very badly.
The bankruptcy of GenesisCare, a cancer treatment specialist backed by private equity powerhouse KKR and China Resources Pharmaceutical Group, is the latest cautionary tale of how much value is being destroyed when companies go bust now. In previous default cycles, leveraged loan providers would expect to get 70% to 80% of their cash back from failing companies, Bloomberg reported.
Internet startup VNG files to become first Vietnam tech firm to go public in US.
Internet startup VNG filed for an initial public offering in the US, making it the first Vietnamese technology company to seek a listing in New York and adding to a diversifying roster of companies planning listings as equity markets thaw, Bloomberg reported.
VNG, which plans to offer almost 22m shares in the IPO, will set a proposed price range in a later filing with the US Securities and Exchange Commission. It said in its filing on August 23 that VNG will continue to be controlled by its founders, Le Hong Minh and Vuong Quang Khai.
Blackstone revives retail buyout fund launch. (FS)
Blackstone Group plans to launch a private equity fund for wealthy individuals after a months-long delay, FT reported.
Blackstone will begin taking subscriptions for the Blackstone Private Equity Strategies Fund, or BXPE, in the fourth quarter and it is planned to be launched in January. BXPE inauguration has been delayed for quite some time now, as Blackstone shelved the launch late last year after its flagship property fund was forced to limit redemptions, adding that it had earlier also delayed raising capital for it. The New York-based investment manager limited withdrawals from its $70bn unlisted Real Estate Income Trust last year after a surge in redemption requests, an unprecedented blow to a franchise that helped it turn into an asset management behemoth.
EMEA
GAM has entered into discussions with French billionaire Xavier Niel's NewGAMe and the Bruellan investor group after the Liontrust Asset Management bid failed to gather enough votes, Bloomberg reported.
The talks are focused on agreeing on short-term bridge financing, and NewGAMe is starting "immediate discussions with GAM's portfolio management teams" to better understand the business.
Liontrust Asset Management said on August 24 that it would incur a one-off charge "not more than" $14m after failing to secure required investor support for the bid while it had secured backing from shareholders representing a total of 53m GAM Shares, corresponding to 33.45% of total stock subject to its offer.
Cordiant Digital Infrastructure, an operationally focused specialist digital infrastructure investor, agreed to acquire Speed Fibre, an open access fibre infrastructure provider, for €191m ($207m).
"As a fourth significant investment, Speed Fibre represents a further strategic milestone for the Company. Speed Fibre operates in a new market for CORD where data consumption growth is expected to be among the highest in Europe. This provides additional portfolio cash flow supported by high visibility revenues from wholesale contracts with global blue-chip customers and offers the potential to generate long-term value and attractive returns to shareholders," Shonaid Jemmett-Page, Cordiant Digital Infrastructure Chairman.
Qatar Sports Investments, the owner of top French football team Paris Saint-Germain, completed the acquisition of World Padel Tour, a sports club that conducts tennis leagues and tournaments. Financial terms were not disclosed.
The tour of the racket sport that has been growing in popularity over the last few years will be called Premier Padel and will be governed by the International Padel Federation.
UBS poised to absorb Credit Suisse domestic bank, drop brand.
UBS Group is poised to decide in favor of fully integrating Credit Suisse's domestic bank, ending months of speculation about the future of the business. The Zurich-based lender has set a target of winding down the Credit Suisse brand in the country, Bloomberg reported.
Executives are preparing for an announcement as soon as the end of this month. UBS has long signaled its preference to subsume its erstwhile local rival's lucrative domestic business rather than spin it off — but Switzerland's elections, due in October, had forced executives to downplay their plan. The domestic job cuts likely to ensue would add to controversy already heightened over the market power that UBS now wields in Switzerland.
Women's multiclub football pioneer in talks over first deal.
Mercury 13, a newly formed company chasing stakes in women's football clubs, is in talks to strike its first deal. The company led by tech entrepreneur Victoire Cogevina Reynal is in exclusive discussions to take a stake in the women's team at Lewes FC, a small fan-owned club based near Brighton on England's south coast, Bloomberg reported.
Lewes runs both a men's and a women's football team, which are resourced equally—a rare approach in the sport. "Lewes was a clear choice because they represent many core principles of how we believe a women's club should be managed," Cogevina Reynal.
Covestro investors press company to enter talks with ADNOC.
Germany's Covestro should engage in formal takeover talks with Abu Dhabi National Oil in the interest of its shareholders. ADNOC, which is trying to diversify and develop its downstream and renewable energy operations, made a non-binding offer for Covestro of €55 ($60) per share in June, which was rejected, Reuters reported.
Earlier in August, ADNOC verbally signaled to Covestro, which has not officially commented on the takeover approach, that it could raise its informal offer to €60 ($65) per share conditional on the German company entering formal talks. Arne Rautenberg, fund manager at Union Investment, said management should take the next step to enter formal discussions within days to avoid further speculation and market uncertainty. The higher offer would value Covestro, which produces foam chemicals used in mattresses, car seats and insulation for buildings, at about €11.6bn ($12.58bn).
Fintech tycoon emerges as mystery backer behind Kazakh bank deal.
A billionaire co-owner of Kazakh fintech giant Kaspi.kz provided the financial backing that helped resolve the biggest asset dispute since Nursultan Nazarbayev resigned as president in 2019, Bloomberg reported.
Kazakh authorities asked Kaspi's chairman, Vyacheslav Kim, to extend the previously undisclosed funding that allowed for a change in ownership at First Heartland Jusan Bank.
IPO market will need more than Arm's listing to bring it back to life.
Arm's highly anticipated IPO has sparked hopes that the moribund market for new listings will spring back to life. All the problems that have waylaid the market for initial public offerings over the past 18 months — from an aggressive Federal Reserve to the threat of a global recession — remain in place.
Arm is different than other IPO wannabes that would raise a fraction that its reportedly seeking. For one, it's massive in comparison, with $2.68bn in sales and $524m in net income last year. More importantly, it toils in the white-hot market for artificial intelligence, Bloomberg reported.
APAC
Kuala Lumpur Kepong, a palm oil firm, agreed to acquire an additional 33% stake in Boustead Plantations, an oil palm estates operator, for $248m.
“This strategic collaboration will not only strengthen the existing co-operation between KLK and BHB, but it provides a major boost to the long-term growth strategy of KLK Group’s plantation business. We are humbled to be entrusted as a partner to co-operate and deliver improvements to BPlant’s estates, in synergy with our own estates. We are optimistic that this corporate exercise will bring positive benefit for Malaysia’s palm oil industry as a whole," KLK Seri Lee Oi Hian CEO.
Malaysia's Permodalan Nasional weighs $2.15bn Sime Darby-Perodua merger. (FS)
Malaysia's largest asset manager, Permodalan Nasional, is considering merging Sime Darby Motors and Perusahaan Otomobil Kedua to create a local automotive giant worth over $2.15bn. State-owned PNB is talking to advisers to explore options, including first by merging the holding companies of the two units and then creating a bigger automotive group that could help spearhead the development of the electric vehicle sector in Malaysia, DealStreetAsia reported.
The plan comes amid a push by the Malaysian government to develop the country's EV sector as competition heats up in Southeast Asia to become the main player or a hub in the global production and supply chain of EVs.
PNB, which manages over $64bn of assets, could drive such a deal as it is the biggest shareholder in Sime Darby Motors' parent, Sime Darby, owning almost a 50% stake and is also the largest shareholder in Perodua's top stakeholder and owns a direct 10% stake in Perodua.
KKR nears sale of pub operator Australian Venue to PAG for $906m. (FS)
KKR is nearing a deal to sell pub operator Australian Venue to private equity firm PAG for about $906m. Discussions are in the final stages and an announcement could come as soon as in the coming days. The management of Australian Venue will stay on to run the business, Bloomberg reported.
Australian Venue owns and operates pubs, bars and event spaces in Australia. It has more than 200 locations across the country. The company shelved its planned initial public offering in Sydney in May 2021 over concerns that the coronavirus pandemic could cloud its business outlook.
Paytm shareholder Antfin to sell 3.6% stake via block deal. (FS)
Paytm shareholder Antfin is likely to sell a 3.6% stake in the Indian payments firm through a block deal on August 25 as it further reduces its stake in the company. The floor price for the sale is set at INR880 ($9.7) per share which is a 2.7% discount on Paytm's last closing price of INR904.45 ($10.9), Reuters reported.
Citi has been appointed as the broker for the deal, which the broadcaster said is valued at a total of $234m. Earlier this month, Paytm said Chief Executive Vijay Shekhar Sharma would buy a 10.3% stake held by Antfin in the firm he founded – in a deal that made him its single largest shareholder. Antfin is the Netherlands-based arm of Chinese fintech giant Ant Financial. The company, whose stake in Paytm fell to 13.49% after the earlier deal, could further reduce its stake to under 10%.
Mamaearth eyes up to $150m pre-IPO funding. (FS)
Baby and mother care brand Mamaearth is in talks to raise around $120-150m in a pre-IPO funding round. The company is looking to raise funding from SoftBank, sovereign wealth funds like GIC and Qatar Investment Authority, and pre-IPO investors like Fidelity Investments, DealStreetAsia reported.
Mamaearth is expecting to raise capital at a valuation of $1.5bn. Founded by husband-wife duo Ghazal Alagh and Varun Alagh, Mamaearth claims to offer 100% toxin-free and natural baby care, skincare, and hair care products. Since 2016, Mamaearth has created a product portfolio of more than 140 products and claims to have reached over 5m customers in 500 Indian cities. The company filed its draft red herring prospectus with the markets regulator, the Securities and Exchange Board of India, to raise funds through an IPO in December last year.
Sinopec eyes Shell's historic Singapore oil refinery.
China's state-owned Sinopec is among several parties circling Shell's storied Bukom oil refinery in Singapore, an asset the company has placed under review as part of a revamp of its refining and chemicals business, Bloomberg reported.
Sinopec's internal affairs suggest that the Chinese refining giant was interested in Bukom for the exposure it can provide in the Singapore market, Asia's number 1 pricing, trading, and distribution hub for oil products such as gasoline and diesel.
Blackstone's China unit gets nod to raise funds for overseas investments. (FS)
Blackstone's newly established China unit has received regulatory approval to raise funds that will be invested overseas, joining other global asset managers in seeking to tap Chinese investor demand for foreign assets. Blackstone registered a fund management unit with the Asset Management Association of China under the qualified domestic limited partnership programme, DealStreetAsia reported.
The unit, which was established in March, has seven full-time employees, including five fund professionals. The quota-based QDLP programme, first launched in 2012, allows foreign and domestic fund managers to raise money from Chinese high-net-worth individuals and institutions, which is then fed into offshore funds.
Lenskart-backer Chiratae Ventures to hit first close of $350m Fund V by year-end. (FS)
Indian venture capital firm Chiratae Ventures will hit the first close of its $350m early-stage Fund V in a few months, DealStreetAsia reported.
"I won't be able to go into numbers. But we will definitely do our first close around December. So in other words, by the end of this year. It will be a substantial first close," Sudhir Sethi, Chiratae Founder and Managing Partner.
The Bengaluru-based investor added that Chiratae Ventures has seen healthy interest from existing limited partners, many of whom will return for this upcoming fund. The vehicle comes shortly after the successful full close of Chiratae's Growth Fund I, which raised $122m in May this year.
HSBC hires Evercore's Hong to lead Singapore dealmaking coverage. (People)
HSBC has hired Alex Hong from Evercore to lead the bank's dealmaking efforts in Singapore. Hong, who has been at Evercore for almost a decade, is set to join HSBC in September. He will report to Sandeep Pahwa, head of investment banking for South and Southeast Asia, Bloomberg reported.
A slump in dealmaking globally has prompted Wall Street firms to downsize their investment banking operations, leading to thousands of job cuts. The government-brokered takeover of Credit Suisse by UBS Group also spurred a slew of departures. Deutsche Bank and Jefferies Financial Group are among those that seized the opportunity and scaled up their presence in Asia with hiring sprees.
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