More PE cybersecurity deals expected; tech valuations are 'not sustainable'

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The Wire

Feb. 25, 2022

More PE cybersecurity deals expected; tech valuations are 'not sustainable'

Good morning. MK Flynn here, with today’s PE Hub Wire.

It's a news-packed Friday morning, with headlines, including: President Biden is expected to announce Ketanji Brown Jackson as his nominee to the US Supreme Court, multiple media outlets are reporting.If confirmed, Jackson would be the first Black woman to sit on the court. The Personal Consumption Expenditures index, a key indicator of inflation, rose again in January, marking a 40-year high. And banks and other financial services firms are worrying about cyberattacks from Russia in retaliation for sanctions imposed by the U.S. and allies after the invasion of Ukraine.

Cybersecurity is seeing a lot of interest from private equity this year. Earlier in the week, for example, Equistone Partners acquired a majority stake in Eperi, a provider of cybersecurity software for cloud applications. We’ll be on the lookout for more cybersecurity deals to come.

PE pros. PE Hub’s Q&A series with high-profile private equity professionals continues today with insights from Alok Singh, founder and CEO of Bridge Growth Partners, a New York PE firm that invests in tech companies. Bridge Growth sold Finalsite, a provider of school website and digital communications tools, to Veritas Capital in December. Singh shared thoughts on the deal and on trends in tech investing. Read the full interview. And visit pehub.com for more interviews in our ongoing series.

Volatility. Uncertainty is creeping into secondaries pricing amid market volatility, Chris writes.

In case you missed. As February draws to a close, check out our most-read stories of the month:

General Atlantic sees opportunities in healthcare system’s inefficiencies: “Virtual care was tiny before the global pandemic, but there is an enormous number of players now," said GA's Robb Vorhoff. "We believe there will be a big consolidation trend in that space.”

Healthcare is 20 years behind in tech, which spells opportunities for Silversmith: "I think of how painful banking was in the 1980s and 1990s and how tech has transformed and makes things smoother, and healthcare has not changed a whole lot," said Silversmith co-founder Jeff Crisan.

‘Valuation is a view of the future,’ says William Blair CEO Brent Gledhill: 'Many sectors – consumer services, logistics, distribution, for example – are terrific sectors with higher valuations today that align with long-term trends.'

Coming up next week: On Tuesday, Buyouts will publish the annual Women in Private Equity, featuring 10 rockstars in dealmaking. Don’t miss the special report written and produced by Chris, Karl, Kirk, Iris, Aaron and me.

Hope you have a safe and healthy weekend,

MK

Read the full wire commentary on PE Hub ...

Also of note (may require subscriptions)

KKR eyes $16bn for second long-duration fund. If KKR succeeds in closing at $16bn, it will have raised the market’s single largest long-life vehicle to date. (Buyouts)

Chris Hayes, ILPA’s top lobbyist, is leaving the organization. Jennifer Choi, managing director of industry affairs at ILPA, will assume Hayes’s role. ILPA is hiring for a directory of legal and regulatory affairs, reporting to Choi. (Private Funds CFO)