CVC Capital to Acquire Infra Fund for $1.1B, Permira's $900M Biopharma Buyout

Insights

Chart of the Week: Average buyout sizes have declined across most sectors in North America, except for Energy, Healthcare, and Communications -- which all saw larger buyout sizes in Q2 2023. Note how the average Technology buyout has declined from $120 million in Q2 2022 to just $30 million in Q2 2023. (Read More)

Recent Reports

• North America Private Equity Report: Q2 2023
• Private Equity Exits Report: Q2 2023
• Private Equity Buyouts Report: Q2 2023

Deal News

European private equity firm, CVC, is set to acquire a majority stake in Dutch infrastructure investor DIF Capital Partners in a deal valued at approximately €1 billion in cash and shares. This acquisition aligns with CVC's recent strategy to expand its investment scope, particularly as it prepares for an expected IPO. This move is reflective of a broader industry trend, with other firms like Blackstone and Apollo diversifying into various asset classes, such as private credit and infrastructure, emphasizing a shift towards multifaceted investment strategies. (Source)

European private equity firm Permira has announced its acquisition of British biopharmaceutical services company, Ergomed, for approximately £703.1 million ($886.40 million). Following the news, Ergomed's stock value rose by 28%, hitting an eight-month high. Based in Surrey, Ergomed offers clinical research and trial management services, operating from 24 global offices. This move is in line with a series of healthcare sector buyouts in the UK this year. (Source)

Industry News

A major lawsuit was launched against the Securities and Exchange Commission (SEC) by a coalition comprising the largest private-equity and hedge funds, contesting new regulations introduced to enhance transparency and ensure fairer terms for investors from asset managers. The suit, submitted to a predominantly conservative federal appeals court, emphasizes the SEC's alleged overreach in its regulatory mandate. These rules, which were approved by the SEC in a divided vote, mandate private funds, controlling almost $27 trillion in assets, to periodically share detailed financial statements with their investors and undergo yearly audits. Additionally, they prevent managers from giving preferential terms to specific investors. The plaintiffs argue that the SEC's actions breach legal and procedural standards. Industry professionals have warned that these regulations could substantially disrupt their operational models, impairing competition, and stifling innovation. Notably, since the introduction of the proposed regulation, influential firms have been proactively lobbying against the SEC's plans and preparing to legally challenge them. (Wall Street Journal)

The London Stock Exchange (LSE) is considering a notable initiative to invigorate its platform by introducing an "intermittent trading venue", a means for founders, investors, and employees in private companies to sell their shares without a market listing. This move is in response to the growing trend of companies remaining private longer and the perceived challenges of the IPO market. Drawing inspiration from similar platforms in the US, the LSE aims to provide a bridge between private capital and public markets, thereby bolstering its appeal to rapidly growing businesses. (Financial Times)

Private equity firms have been aggressively investing in various sectors of the sports industry, from entire leagues to apparel brands. However, college sports have largely been overlooked. This might change soon as private equity sees a growing potential in the professionalization of college sports. Florida State, for instance, is in talks with Sixth Street for a potential investment. While there's enthusiasm for the commercial opportunities college sports present, there are challenges. Most colleges are public institutions, bound by state laws and nonprofit regulations that limit direct investments similar to professional sports. Recent shifts, such as football-driven conference realignments, have changed the college sports landscape. This, coupled with revenue disparities among colleges, might increase the appeal of private equity. While Europe has seen private equity involvement in sports, U.S. college sports present unique complexities due to the public nature of universities and existing third-party commercial rights. Hence, private equity's current involvement is more through investing in companies like Playfly or Legends that collaborate with major colleges. Additionally, the decision-making structure in colleges, involving various committees and boards, might challenge deal-making. (Front Office Sports)

In a rare move, employees at Sogo & Seibu, a major Japanese department store, went on strike over concerns regarding a sale of the store by Seven & i to Fortress, a SoftBank-owned entity. The deal, worth $1.5 billion, has been contentious due to Fortress's plans to introduce a discount electronics retailer within Sogo & Seibu, which workers believe could degrade the store's reputation and risk job security. This labor disruption, uncommon in Japan, coincides with new M&A guidelines proposed by the Japanese government and stands out in a nation where such dissent is typically rare. (Axios)

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