U.S. buyout fund Bain Capital is in final talks to buy French IT services firm Inetum in a deal worth about $2.27 billion that would boost its presence across Europe’s tech sector, sources familiar with the matter told Reuters.
The deal will see Inetum – formerly known as Gfi Informatique – returning into private equity hands after being sold to Qatar’s group Mannai Corp in 2016, the sources said, speaking on condition of anonymity.
Bain is putting the finishing touches to the transaction which could be signed as early as this week and would value the 52-year old French firm at roughly 2 billion euros ($2.27 billion), one of the sources said.
JPMorgan is working with Mannai Corp on the sale while Credit Suisse is advising Bain, the sources said.
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Mannai, which has also hired U.S. bank Lazard, said on Wednesday that its board had approved a potential sale of its full stake in Inetum, without mentioning the buyer.
Bain was not immediately available to comment while JPMorgan and Credit Suisse declined to comment.
The move comes as Bain Capital is looking to build scale in Europe’s fragmented IT services industry where the private equity firm bought Italy’s Engineering Group in 2020.
Based on the outskirts of Paris, Inetum provides services spanning IT consultancy, cloud computing, artificial intelligence, blockchain and infrastructure in more than 26 countries.
In 2019 it bought Spanish firm Informática El Corte Ingles (IECISA) to create a European tech champion.
Inetum, led by Chief Executive Vincent Rouaix, had revenues of almost 2 billion euros in 2020 and was previously backed by investment firms Apax France, Altamir and Boussard & Gavaudan.
Bain, which owns British market data business Kantar and has been a prolific investor in Europe’s payments industry, has valued Inetum at about 10 times its core earnings of roughly 200 million euros, one of the sources said.
The Boston-based private equity firm has held bilateral talks with owner Mannai Corp for several weeks ahead of a possible deal, the source said.
Private equity funds have deployed record amounts of dry powder during the pandemic and are keen to finalise
Cyber startup Wiz raises $1bn in private funds
Wiz, a US-Israeli startup and cloud cybersecurity solutions provider, has raised $1bn in a private funding round led by Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital, valuing the four-year old company at $12bn, according to a report by Reuters.
The report cites a statement made on Tuesday by Wiz, which has now raised $1.9bn since its founding in 2020, in revealing that it plans to use the finds for future merger & acquisition efforts, talent recruitment and product development.
Wiz’s new valuation is a 20% increase over the company’s latest fundraising round last year, with the business expecting 2024 to be a year of consolidation within the security market.
Other participants in the funding round include Greylock and Wellington Management, as well as existing investors Cyberstarts, Greenoaks, Howard Schultz, Index Ventures, Salesforce Ventures and Sequoia Capital.
Ethos Partners sell Cosegic to MML Enterprise
Lower mid-market private investment firm Ethos Partners will sell UK compliance consultancy Cosegic to international mid-market private equity firm MML Capital.
Cosegic which provides compliance consultancy and regtech services for firms that offer regulated financial services, was acquired by Ethos in March 2021 to facilitate the retirement of majority owner Ben Mason, who founded the business in 2003 as Compliancy Services.
Cosegic helps clients become authorised by the Financial Conduct Authority and the Prudential Regulation Authority and manages their ongoing compliance and regulatory obligations.
In June 2022, the company completed the bolt-on of Portman Compliance, owned and led by Nancy King, after which the enlarged group became known as Cosegic. The deal saw Portman’s portfolio of around 150 clients, the majority of which were hedge funds and private equity businesses, serviced within the rebranded Cosegic business. In November 2022, Adam Holden joined as CFO.
Cosegic were advised by Arrowpoint Advisory, HCR, Grant Thornton, CIL, Quantuma and Shoosmiths.
KKR raises $15bn in Asia’s biggest fund as buyout-backed deals rise
Private equity powerhouse KKR & Co said on Tuesday it has raised $15 billion for its fourth Asia-Pacific focused fund, marking the region’s biggest private equity fund at a time when buyout-backed deals are on the rise.
U.S.-based KKR started marketing the new Asia fund towards the end of 2019, initially targeting $12.5 billion, sources familiar with the situation have said previously.”Companies across Asia Pacific are recognising their potential to become not only national and regional champions but also global leaders in their industries,” Ashish Shastry, KKR’s co-head of Asia Pacific private equity, said in a statement announcing the fund-raising.
KKR said the fund exceeded its target size to reach its hard cap for fund investors’ commitments and received strong support from new and existing global investors, including significant representation from Asia Pacific-based investors.
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Coronavirus-spurred growth in the technology sector is expected to drive M&A activity in Asia this year. Private equity-backed deals in the region rose 51% to a record $129 billion last year.
Many regional funds including China’s Primavera Capital and Boyu Capital are also raising funds, while Hillhouse Capital is targeting raising $13 billion, sources have said.
KKR said its fund would tap into opportunities stemming from rising consumer spending and urbanisation trends, as well as corporate carve-outs, spin-offs and consolidation.
KKR will invest about $1.3 billion in capital alongside fund investors through the firm and its employees’ commitments.
In January, it said it had closed its first fund targeting real estate investments in Asia Pacific, days after it closed its inaugural Asia infrastructure fund.
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Bain Capital acquires $250m minority stake in professional services firm Sikich
Sikich, a global professional services company, has secured a minority growth investment of $250m from Bain Capital, with the funding set to be deployed to finance the firm’s expansion plans, the companies said on Thursday.
Sikich, which was founded in 1982, maintains majority control of the company and its existing executive and leadership teams, led by CEO Christopher Geier, who assumed the role in 2017 and according to a press statement, has overseen a period of “rapid growth”.
Sikich currently employs around 2,000 and serves clients in all major US markets and around the world.
The investment was made from funds managed by Bain Capital Special Situations and Bain Capital Credit.
PJT Park Hill acted as financial advisor for Sikich, while Holland & Knight and Vedder Price acted as legal advisors. Kirkland & Ellis and Hunton Andrews Kurth acted as legal advisors for Bain Capital.
Ancala exits Dragon LNG Group interests to VTTI
Independent infrastructure manager Ancala will sell its 50% interest in Dragon LNG Group, the owner and operator of a liquefied natural gas regasification terminal to VTTI, a global specialist in energy storage and developer of energy infrastructure.
Dragon’s terminal, which is located in Milford Haven, Wales, is one of three LNG terminals in the UK, and has a gas send out rate of up to 9bn cubic meters per annum.
Ancala completed the acquisition of a 50% interest in Dragon in 2019. The other 50% interest is held by Shell, who will remain as a shareholder following the transaction.
Since Ancala’s acquisition, the infrastructure manager has worked with the business to invest in the terminal, develop and execute its net zero strategy and enhance its operations, according to a press release. Dragon commissioned a reliquefaction plant which makes the terminal Europe’s only zero send-out regasification plant.
Dragon is also currently working in partnership with RWE, the largest power generator in Wales, on the construction of a Multi-Utility Services Transit, which is intended to connect industry across the Milford Haven Waterway.
The transaction, which is subject to customary conditions and is expected to close in Q3 2024, marks Ancala’s sixth exit from its first flagship infrastructure fund. Financial details have not been disclosed.
Ancala was advised by Travers Smith and Alvarez & Marsal.
South Florida entrepreneur launches PE firm Exuma
South Florida businessman and entrepreneur Anthony Perera has launched Exuma Capital Partners, a private equity firm that will invest in high-growth middle markets across the technology, real estate, food and beverage, and home services industries.
In a press statement, the firm said that its mission was “to generate superior returns for investors by fostering growth in underserved and fragmented markets”.
Perera, who oversaw the growth of remote inspection and permit documentation company Inspected.com and founded Air Pros USA, will serve as a Managing Partner at Exuma.
Physicians describe private equity as “scapegoat” for healthcare delivery
Issues in healthcare delivery are not due to private equity but rather to flawed incentive structures that do not prioritise patient health and wellbeing, argued doctors David N Bernstein and Prakash Jayakumar in a joint op-ed in Becker’s Hospital Review last week.
Bernstein is a resident physician in the Harvard Combined Orthopedic Residency Program at Massachusetts General Hospital and Jayakumar is an assistant professor and director at the department of surgery and perioperative care at the University of Texas at Austin’s Dell Medical School.
Bernstein and Jayakumar describe the current US healthcare system as one that financially rewards those who deliver “the quantity of services delivered and goods sold, rather than quality – and specifically health outcomes benefiting patients relative to cost”, arguing that private equity in health care is a side effect of the current system, and the real issue lies in the underlying incentive structures. They note that even hospitals and health systems that are not owned or operated by private equity are facing financial struggles.
The co-authors propose a shift towards a healthcare delivery system that rewards health and enhances value for patients, minimising private equity’s role in healthcare and allowing physicians “to treat patients as they see fit as long as patient value remains optimised, and bureaucratic hurdles, including unnecessary paperwork, will likely be reduced”.
The proposed healthcare system, they continue, aligns the two goals of helping people and making money, “which are commonly thought or assumed to be mutually exclusive in healthcare”.
Bernstein and Jayakumar’s op-ed follows a recent study in the Journal of the American Medical Association, which found that “private equity acquisition was associated with increased hospital-acquired adverse events, decreased treatment of elderly and poorer patients, and increased hospital transfers”, and the US Senate’s probe into the role of private equity in the US healthcare space.
Blackstone, KKR and Sony eyeing deal for online comic store co Infocom
Private equity majors Blackstone and KKR as well as Sony Group are among a number of parties interested in acquiring Japan-based online comic store company Infocom in a deal that could be worth up to $1.28bn (JPY200bn), according to a report by Bloomberg.
The report cites multiple unnamed sources in revealing that Infocom’s parent company Teijin is looking to sell its entire stake of around 55% and has scheduled a second round of bidding for mid-May.
According to one of Bloomberg’s sources, some bidders are aiming to acquire all of Infocom’s shares through a tender offer that could put the purchase price at JPY200bn.
Infocom, which has a current market capitalisation of JPY171bn, operates digital comic site MechaComic, one of Japan’s largest.
Industry Split on SFDR Outcome
Consultation results reveal investors and industry networks undecided on whether to leave Articles 8 and 9 behind.
The European Commission has published a summary report outlining feedback to its consultation on the future of its flagship sustainable finance disclosure regime, having found no clear consensus on how to improve the framework.
The Sustainable Finance Disclosure Regulation (SFDR) first came into effect in March 2021, introducing disclosure requirements for fund managers to report at the entity- and product-level on how and to what extent their funds align with Article 8 and 9 fund categories.
In the three years since, compliance with SFDR has been fraught with challenges, prompting the commission to run a three-month consultation last year proposing changes to existing disclosure requirements and questioning whether the regulation was still relevant.
With the results now visible, it appears that while most respondents agreed that SFDR’s purpose remains valid, they question its current effectiveness, with 62% noting that SFDR has not sufficiently strengthened protection for end investors and 52% claiming it has not successfully directed capital towards sustainable and transition investments. In addition, 84% of respondents said SFDR disclosures were not useful to investors.
Meanwhile, seventy-seven percent of respondents highlighted additional limitations within the framework, such as a lack of legal clarity on key concepts, limited relevance of certain disclosure requirements, and ongoing issues with data availability.
A large majority of respondents called for disclosure requirements such as adverse sustainability impacts to be simplified and streamlined across the EU’s sustainable finance framework.
“Support for SFDR remains strong, demonstrating its positive effect on improving the transparency of sustainable investments,” Pierre Garrault, Senior Policy Adviser at pan-European sustainable investment organisation Eurosif, told ESG Investor. “But many respondents – including Eurosif – find it insufficiently clear in defining key terms and acknowledge it is used as a de facto labelling regime.”
The commission also noted “no clear preference” for either of its two proposed approaches to a potential EU fund labelling system.
One of these options would involve designing and implementing new criteria that would more closely align with the UK’s Sustainability Disclosure Requirements (SDR), whereas the other would formalise Article 8 and 9 as