View this email online 

Apollo to take U.S. Silica private for $1.85bn; Madison Dearborn and HPS completes NFP sale for $13bn

Good morning dealmakers, thank goodness it’s Friday.

It’s Obey Martin Manayiti here with a jam-packed newsletter.

We have news this morning that Apollo is taking industrial minerals firm U.S. Silica private for $1.85 billion.

And speaking of take-privates, investment bank Houlihan Lokey released a report this week that indicated the number of sponsor-backed take private transactions decreased in 2023. I have exclusive insights for 2024 on this subject.

We also have the big one this morning that Madison Dearborn Partners and HPS Investment Partners have completed the previously announced sale of NFP for $13 billion.

Up next, employee ownership is gaining traction among PE sponsors asOpenGate Capital signed on to Ownership Works.

OpenGate also exited a waterproofing provider. We have exclusive details on the returns below.  

For our Friday listicle, I am detailing six recent solar deals that show sustainable investing is front and center amongst private equity.

I also have insights from a managing partner at Flexstone Partners on why most investors are in favor of private equity as opposed to public markets at this time.  

Industrial minerals

Apollo has agreed to acquire U.S. Silica, a Katy, Texas-based industrial minerals company, in a take-private deal for about $1.85 billion.

Premium subscribers of the Wire have more on this deal.

Insurance

Madison Dearborn Partners and HPS Investment Partners have completed the previously announced sale of NFP, an insurance firm, to Aon plc, a global professional services firm, for $13 billion.

Upgrade to the premium version of the Wire for more on this deal.

Ownership Works

OpenGate Capital is one of several new backers of Ownership Works, as employee ownership continues to gain traction in the private equity industry.

Premium subscribers of the Wire have more on this subject.

Waterproofing

Speaking of OpenGate, yesterday the firm sold SMAC, a French provider of waterproofing and building envelope systems, to Compagnie Financière Jousset and the SMAC management team. The deal resulted in $200 million in sales proceeds, according to people familiar with the matter.

Subscribe to the premium version of the Wire to learn more about the returns.

Solar power

Sustainable investments present the biggest opportunity in private markets for 2024, according to a report this week by Natixis Investment Managers, a consulting firm based in Boston. “One likely reason is that government funding to support energy transition projects ranging from electrified transport to renewable energy has grown from $526 billion globally in 2018 to $1.7 trillion in 2023,” the report says.

Solar energy has been at the center of many firms’ investment theses. We feature six recent investments that show PE’s warm feelings for solar energy and other related services, such as battery storage.

Premium subscribers have access to the six deals.

Going private

Key highlights from the Houlihan Lokey report titled 2023 Going Private Transaction Study indicate that:

• The number of sponsor-backed going private transactions decreased from 45 transactions in 2022 to 33 transactions in 2023.

Subscribe to the premium version of the Wire to get more on this report and what Rick Lacher, a managing director at the investment bank said about 2024.

PE versus public markets

Earlier in the week, Natixis Investment Managers released a report that opened the long held debate on public markets versus private equity. The report shows why most investors are bullish on private equity.

“One key reason for their optimism is the potential to outperform public markets, as nearly two-thirds (66%) of institutions believe there is a still a significant delta in returns between private and public markets,” read the report.

Premium subscribers have access to insights from Nitin Gupta, a managing partner at Flexstone Partners who was part of the discussants for the report.

That’s it for today. You can always reach me at obey.m@pei.group.

MK Flynn will be back with more on Monday.

Regards,

Obey

Read the full wire commentary on PE Hub ...

Also of note (may require subscriptions)

Has private equity fundraising hit bottom? It is perhaps too soon to say. The original causes of slower fundraising remain stubbornly in place. (Buyouts)

The Bank of England isn’t known for being a frequent commentator on the private equity industry. However, in the past month, it has made at least four public references to the asset class, highlighting concerns it has about how exposure to PE may result in potential risks to the economy. Why the sudden attention? The short answer is that it’s not sudden. (Private Equity International)

OpenGate Capital’s exit from SMAC, a French waterproofing and building envelope systems supplier, has resulted in $200 million in sales proceeds, according to people familiar with the matter. (PE Hub Europe)

Is it even really worth leading a deal these days? Reports of the benefits of preferential terms for investors who negotiate and structure a deal may be greatly exaggerated. (Secondaries Investor)

Why CLO equity may be the next big thing: Private debt has found another area of financing where traditional players are struggling to maintain their dominance. (Private Debt Investor)

Bain Capital set a $2 billion target for its fourth fund targeting life sciences companies, in line with what it raised for its predecessor. (Buyouts)

It is hard to see how VC firms can argue to their LPs that they really need more capital in a market where dealmaking remains slow and they are sitting on a massive amount of dry powder. (Venture Capital Journal)

FarmTogether has hired former AMERRA Capital Management executive David Gould in a newly created role as head of capital formation. (Agri Investor)

Bluefront Equity has launched its second seafood fund and has a $150 million fundraising target. The Article 8 Bluefront Capital II has already taken $50 million in commitments and has welcomed Cambridge Associates as a new investor to the strategy. (Agri Investor)

Pete Keenan, vice-president of finance at 645 Ventures, and Adam Devine, co-founder at Foresight Data, discuss advances in technology that allow fund sponsors to bring together data from different sources in order to help finance leaders make decisions that maximize portfolio value. (Private Funds CFO)

Once targeting a 5% infrastructure allocation, LACERA’s board of investments has voted to lower that number to 4% – nearly its current allocation, and down from September's 5.5%. (Infrastructure Investor)

Mounting distress will invigorate the real estate transaction market: The impact of rising rates on borrowers has yet to catalyze a wave of distressed sales. But there are signs they are coming. (Private Equity Real Estate)

They said it

“We have tremendous respect for U.S. Silica and its talented management team and employees, and are thrilled to partner with them to unlock the company’s next phase of growth. U.S. Silica’s industrial minerals and sand mining and logistics businesses each are proven leaders in their respective markets.”

— Gareth Turner, a partner at Apollo, said in a statement about the US Silica take private deal.