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| In today's Daily Pitch, you'll find: | | | | | |
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| PE turns to equity to fund add-ons amid tough debt market | |  | | (filadendron/Getty Images) | | | PE firms are changing their add-on playbook by relying more on equity to avoid paying higher interest rates.
Investors are increasingly worried that taking on further leverage to fund add-ons will trigger debt clauses that raise their overall borrowing costs. | | | | | | | | | Private capital holds a key to enabling value-based healthcare | | As parts of the US healthcare industry transition to value-based care, patients should expect better medicine and, hopefully, lower costs. But executing that transition well requires a massive up-front investment.
One solution: Value-based care enablement, a business model that groups independent practices or health systems together and takes on the downside risk of the new billing framework. Our recent industry research delves into the public and VC- and PE-backed companies driving the shift toward better-value healthcare. | | | | | | | |
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| Digitally transform fund operations to keep pace with legal demands | | Over the last two decades, innovation in the private funds industry has led to unprecedented returns. At the same time, this innovation, combined with rapid industry growth, heightened competition, and increased regulation, has made it exponentially more complex to manage a fund.
At this point, firms have to look beyond internal legal teams and external counsel to keep pace with intensifying legal workloads. Relying on these teams might provide short-term relief, but it’s neither efficient nor effective in the long run.
Legal tech and artificial intelligence offer viable alternatives to manual processes, but firms will need a comprehensive and industry-specific solution to benefit from a digital transformation.
Learn more in Ontra's white paper, The Digital Transformation Imperative | | | | | | | |
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| 5 charts: A light at the end of the tunnel for European PE? | |  | | (Jose A. Bernat Bacete/Getty Images) | | | Q2 2023 was another subdued quarter for European PE. While there are signs of life, there is little to indicate an imminent turnaround in fortunes.
Deal activity has continued its slump, exits have picked up slightly and fundraising remains concentrated among fewer funds. Here are five key trends pulled from PitchBook's Q2 2023 European PE Breakdown, which examines how the market performed in the first half of 2023. | | | | | | | | | The return of the LBO machine | |  | | (Jenna O'Malley/PitchBook News) | | | The rust is coming off the gears of private equity's LBO machine.
Leveraged buyouts accounted for 40% of US PE deals in 2008, but PE's bread-and-butter transaction type has given way to alternative strategies like add-on acquisitions and growth-equity deals. By 2022, it had fallen to 19% of total deal count.
But a rebound in bank lending in the second half of 2023, paired with a momentary pause in rising interest rates, recent valuation corrections and heaps of dry powder, could offer a glimmer of hope for PE's hallmark deal type. | | | | | | | | | Pandemic-propelled public medtechs lose wind in sails | | 2023 has been a mild year for public medtech companies. Share prices are either keeping pace with major indexes or, in the case of sectors that boomed during the COVID-19 pandemic, running below. Earnings estimates show a recovery in 2024 and 2025.
Our Q2 2023 Medtech Public Comp Sheet and Valuation Guide tracks stock performance, valuations and market caps—as well as forecasts for revenue, EBITDA and earnings per share—for key publicly traded companies. For this quarter's guide, all tables and charts are presented in spreadsheets for ease of use. | | | | | | | | | | Bath & Body Works cracks the code to 'Made in America.' [The Wall Street Journal]
In much of the South, electricity is in the hands of the US government, not private companies. Is anyone better off? [The Atlantic]
The global economy is showing signs of resilience despite lingering threats. [The New York Times] | | | | | |
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| | Since yesterday, the PitchBook Platform added: | | 453 Deals | 2073 People | 637 Companies | 8 Funds | | | | | | |
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The Daily Benchmark:
2017 Vintage Global Secondaries Funds | | | | | | |
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| A message from Moss Adams | | |
Insights for broadband industry deals | | Macroeconomic challenges, including geopolitical tensions, global supply chain disruptions, and interest rates raised to combat inflation, shifted dealmaking trends in the communications space.
However, pockets of opportunity remain with continued growth of digital and mobile technologies, including 5G and cloud-based communication tools, driving significant private market investment. Quarterly private investment deal value grew 41.6% in the first quarter of 2023 and already represents more than half of the annual total closed in 2022.
Explore recent dealmaking data and current trends in this industry report. | | | | | | | |
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HIG Capital has agreed to acquire audiobook publisher RBmedia from KKR for more than $1 billion, more than double the $500 million KKR paid for the company in 2018, The Wall Street Journal reported.
Silversmith Capital Partners-backed AppHub, an ecommerce enablement platform, has received a $95 million growth investment from PSG. AppHub has made nine software acquisitions since its founding in 2021.
The Carlyle Group has agreed to acquire Evolution Funding, a UK-based car finance software platform, from LDC. LDC will retain a stake in the business.
BC Partners has agreed to sell a minority stake in PetSmart, one of North America's largest pet retailers, to Apollo Global Management.
Middle market-focused RF Investment Partners has made a growth capital investment in Nextpoint, a legal-tech software provider.
Pearl Energy Investments has invested in newly formed Voyager Midstream Holdings, which will acquire and develop midstream oil and gas infrastructure in North America. | | | | | |
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| Thoma Bravo has agreed to sell Imperva to French aerospace and defense giant Thales for $3.6 billion. Imperva specializes in enterprise cybersecurity. | | | | | |
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Proterra Investment Partners has closed Proterra Credit Fund 2 above its $500 million initial hard cap. It will target middle-market food and beverage companies based in North America.
PE firm Valesco Industries has closed its third fund on $434 million. The fund is focused on investments, as well as subordinated debt, in small businesses and lower-middle-market businesses.
Valhalla Ventures has launched its debut fund with $66 million to invest in seed-stage gaming and deep-tech startups. | | | | | |
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