Elliott takes stake in Salesforce; Ardian invests in Assist Digital; PE firms focus on value creation

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Elliott takes stake in Salesforce; Ardian invests in Assist Digital; PE firms focus on value creation

Good morning, Hubsters. MK Flynn here with the Wire on a busy Monday.

Some of the stories we’re covering today include: an activist investor with an appetite for LBOs has taken a big stake in an enterprise software company; dealmaking in Europe continues apace; and private equity firms focus on value creation.

Tech talk. This morning, we’re keeping an eye on Salesforce, as activist investor Elliott Management Corp. has taken a multibillion-dollar stake in the business software developer, a move first reported by the Wall Street Journal, citing people familiar with the matter.

Like many tech companies, the San Francisco-based enterprise software maker is currently laying off about 10 percent of its staff. Chair and Co-CEO Marc Beniof has admitted the company hired too many people during the pandemic, when demand for its products increased.

“Salesforce is one of the pre-eminent software companies in the world, and having followed the company for nearly two decades, we have developed a deep respect for Marc Benioff and what he has built,” Jesse Cohn, managing partner at Elliott, said.

Last year, Elliott was involved in takeovers of enterprise software developer Citrix Systems and media ratings group Nielsen, two of the largest leveraged buyouts of the year, through its private equity unit Evergreen Coast Capital, the Financial Times points out.

Customer experience. In dealmaking this morning, one European announcement stood out.

Ardian has entered into an agreement to acquire a majority stake of around 60 percent in Assist Digital, which provides end-to-end customer experience services. Assist Digital, headquartered in Milan, has offices in Italy, France, Germany, UK, Spain and Netherlands.

For more on the deal, including the roles played by Milan-based Progressio SGR and Paris-based BNP Paribas, read the full story by assistant reporter Irien Joseph on PE Hub Europe.

Next stop, the Netherlands. Private equity dealmaking continues to heat up in Europe, with more North American firms setting up shop in the region.

Today, MiddleGround Capital, headquartered in Lexington, Kentucky, announced a new office in Amsterdam. The operationally focused PE firm makes control investments in mid-market B2B industrial and specialty distribution companies.

The firm said it is expanding its operating capabilities “to meet the growing needs of global investors and portfolio investments,” a theme PE Hub and PE Hub Europe are hearing frequently in these economically challenging times.

Limited time offer. Complementary access to PE Hub Europe will end soon.

PE Hub Europe extends the renowned and respected North American deal coverage of PE Hub to the European market by leveraging the unrivalled access and knowledge of PEI Group.

Led by editor Craig McGlashan and including reporter Nina Lindholm and assistant reporter Irien Joseph, PE Hub Europe gets to the heart of the European private equity landscape by analyzing deals and the direction of the market and telling the stories of the people and firms making it all happen.

PE Hub Europe goes beyond the press release to get to the heart of the story by speaking to the dealmakers involved.

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Value creation. “Private equity firms are remaining proactive,” said Sean Mooney, the founder and CEO of BluWave, which provides a marketplace for services aimed at private equity professionals.

The company recently released BluWave's Q4 /2022 Activity Index Report, based on activity across its client base of 500 mid-market PE firms.

The index “shows how top PE firms are finding ways to continue making deals and how they’re surrounding their portfolio companies with the means to not only survive, but thrive as the economy transitions,“ Mooney told PE Hub.

That’s all for today.

Tomorrow, Aaron Weitzman will write the Wire. It will be his last Wire, as he moves on at the end of the week. Aaron has done a great job as a reporter for PE Hub over the last year, and we wish him well.

Buyouts’ Chris Witkowsky writes the Wire on Wednesdays, and I’ll be back on Thursday.

Happy dealmaking until then!

All the best,

MK

Read thefull wire commentaryon PE Hub …

Also of note (may require subscriptions)

Limited partners offered more, and sold less, than expected in secondaries deals last year, even as LP portfolio sales eclipsed GP-led processes like single asset continuation funds for the first time since 2019, according to fresh research from Jefferies. (Buyouts)

Buyouts previews a rare interview with one of the founding fathers of private equity: Carl Thoma, co-founder and managing partner of Thoma Bravo. "Any successful private equity professional is not in this for the fee income," Thoma said. "If they are, they probably won’t be very successful. So, if our carry goes down, our fees go down and our taxes go up, we’ll still get up every morning and enjoy what we’re doing."

Fondaction looks to repeat high returns trick with C$160 million fund. The firm’s C$30m pilot vehicle invested exclusively in projects that could generate carbon credits and has been able to deliver IRRs in the high teens. (Agri Investor)

"Venture capital firm Highland Europe has closed a new €1bn fund to back start-ups, growing its capital pool for investments as the tech industry is hit by a broader slowdown." (Financial Times)

The New York Times checks in on the pending mega-merger of the two largest US grocery chains, Kroger and Albertsons. "Ever since the [deal] was announced in October, the companies have argued that the marriage will be good for consumers, employees and communities. But the biggest winners in the $24.6 billion deal may be the private-equity giant Cerberus and a group of investors."

Pockit, a "taxpayer-backed provider of financial services to people who struggle to secure bank accounts[,] says it is close to securing private equity backing amid 'significant doubt' over its ability to continue trading." (The Times)

Boston-based Battery Ventures "is betting that fragmented markets in Europe will allow software investors to consolidate specialty providers into larger enterprises." (WSJ Pro)