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Vista announces another take-private tech deal; Monroe’s Ted Koenig discusses the virtues of private credit

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

It’s a busy morning, beginning with a multi-billion-dollar enterprise software deal from Vista Equity Partners, and including a Q&A with Monroe Capital’s Ted Koenig.

Take private. In its first deal of 2023, Vista has agreed to buy publicly-traded Duck Creek Technologies, a developer of technology for the property and casualty insurance industry, for $2.6 billion.

“Duck Creek is playing an outsized role in accelerating cloud strategies and unlocking all the advantages they provide this crucial sector of today’s economy,” said Monti Saroya, senior managing director and co-head of Vista’s Flagship Fund.

Tech-focused PE firms including Vista and Thoma Bravo are taking advantage of the public market volatility to make acquisitions, and we expect to see more take-private tech deals in 2023.

For more on the trends, see my recent interview with Thoma Bravo’s Holden Spaht.

Go to debt financing. PE Hub’s Q&A series with private equity leaders reflecting on highlights from 2022 and sharing their outlooks for 2023 continues today with Ted Koenig, chairman and CEO of Monroe Capital. 

I asked Koenig to share his perspective on the rise of private credit.

“In our view, private credit’s role has shifted over the years to the go-to source of debt financing for companies of all sizes in all industries,” Koenig said. “Direct lenders’ ability to provide borrowers with certainty of execution, and custom and tailored financing solutions, cannot be matched by the traditional bank underwriting and syndication process. Certainty is always highly valued by sponsors, but never more so than during periods of market volatility when banks are less willing to put their balance sheets at risk and when new issuance for collateralized loan obligations, the primary buyer of leveraged loans, slows.”

For more, read the full interview here.

Home improvement. Later today, LightBay Capital and Freeman Spogli & Co, are expected to announce the acquisition of residential services company Infinity Home Services, sources told Buyouts’ Chris Witkowsky. The two firms have partnered on several investments in the past.

You can read more about that expected announcement here.

We’ve seen an uptick in PE deals involving home maintenance. The trend began during the pandemic, when lockdowns motivated home owners to make improvements, and it’s expected to continue even if there’s a recession, as many people consider domestic repairs essential.

For more on those trends, see Iris Dorbian’s roundup of plumbing and HVAC services deals here and Obey Martin Manayiti’s look at PE-backed home maintenance services deals here. 

Extra, extra. Before I sign off for the day, I’d like to encourage you to sign up for PE Hub Europe and our Dealflow daily newsletter.

Today, the UK-based editorial team led by editor Craig McGlashan covered a pair of deals in the world of drug discovery by Inflexion and Novo Holdings, among other developments.

You can read all about it here.

For a limited time only, we’re offering complimentary access to PE Hub Europe. Sign in or register here to start reading today. 

That’s it for now. Aaron Weitzman will write tomorrow’s newsletter, and Chris Witkowsky will be on duty Wednesday. I’ll be back on Thursday.

Cheers ‘til then,

MK

Read thefull wire commentaryon PE Hub …

Also of note (may require subscriptions)

An LP opening its wallet for a GP in today’s fundraising market is a big move of confidence, especially if it represents the formation of a new relationship, writes Buyouts editor Chris Witkowsky.

In spite of its tough macro environment, Latin America has been one of General Atlantic’s best-performing regions, says Luis Cervantes, the managing director and head of GA’s Mexico office. (Private Equity International)

North Sky Capital, which manages a series of impact secondaries funds, has hired a European managing director to help it capitalise on an expected boom in impact secondaries. (New Private Markets)

While most college seniors are worried about landing their first job, Ben Finlay has faith that his faith will see him through. Finlay, who is in his last semester at Princeton University studying religion, recently founded Plesion Capital to make impact investments in Africa. The Vienna, Virginia-based firm just announced that it has committed $500,000 to Uganda-based fintech platform Xeno’s $2 million seed round. (Venture Capital Journal)

"Dan Glaser, the former chief executive of insurance broker and benefits company Marsh & McLennan Cos., is joining private-equity firm Clayton, Dubilier & Rice LLC as an operating partner." (Wall Street Journal)

"Enpal GmbH is close to raising new funds from a group of investors led by U.S. private-equity firm TPG Inc. in a deal that values the closely held German solar-panel company at $2.4 billion, according to people familiar with the matter." (Wall Street Journal)

"Private equity firms that deemed drug development too risky for their liking in the past are increasingly investing in the sector, raising dedicated funds and coming up with deals that compensate them for the uncertainty involved." (Reuters)

"Uncertainty about valuations caused the secondary market to slow in the second half of 2022, though pressures weighing on institutional investors and fund managers could trigger a wave of deals in 2023." (WSJ Pro)