Good morning, Hubsters. Senior reporter Michael Schoeck here with the US edition of the Wire from the New York newsroom, filling in for Obey Martin Manayiti, who’s on parental leave.
We’re gearing up for PEI Group’s NEXUS 2025 summit in Orlando, March 10-12. PE Hub’s editor-in-chief Mary Kathleen (MK) Flynn and reporter Rafael Canton will be attending, and they look forward to meeting you there.
In the days leading up to the conference, we’ll share some program highlights in the Wire. See below for a look at NEXUS featured speaker Tricia Glynn, a managing partner at Advent International, who invests in the consumer sector.
Next, we’ll highlight a deal involving a diamond crystal cutting company for the energy and mining markets.
And last up we’ll have a look at trends driving the growing use of continuation funds by private equity firms.
NEXUS preview: Advent’s Tricia Glynn
As the days count down to PEI Group’s NEXUS 2025 summit in Orlando, March 10-12, we’re sharing details on the program.
PE Hub’s editor-in-chief Mary Kathleen (MK) Flynn will be interviewing many of the PE industry’s thought leaders on stage at NEXUS, including Tricia Glynn, a managing partner at Advent International, where she advises on buyouts and growth equity investments in the consumer sector.
Glynn joined Advent in 2016 and is based at the firm’s Boston headquarters. Prior to joining Advent, Glynn worked at Bain Capital Private Equity, where she was a principal in the consumer, retail, and dining sector team.
Advent has been very active in the consumer sector. In February, the firm closed its acquisition of condiments and seasoning maker Sauer Brands from Falfurrias Capital Partners. Glynn led the deal.
In 2024, the firm sold Sovos Brands to Campbell Soup Company for $2.7 billion. Also in 2024, Advent completed the sale of CRM Group, owner of Kopenhagen and Brasil Cacau, to Nestlé Brasil.
On the acquisition side in 2024, Advent invested in Brazilian hair care brand Skala Cosméticos and in Seek Pet Food.
At NEXUS, Glynn will share her insights on investing in the consumer sector, including the emerging category of luxury fitness.
For more of what to expect at NEXUS 2025, check out MK’s conversation with Thoma Bravo’s Orlando Bravo about investing in tech companies.
Diamond cutter divestment
The energy-facing industrials market has shown no shortage of PE-backed deals and companies coming up for sale.
LongRange Capital, a mid-market private equity firm based in Stamford, Connecticut, has announced an agreement to acquire US Synthetic Corporation from ChampionX for undisclosed terms.
ChampionX made the divestment to secure Hart-Scott Rodino antitrust approval of its pending merger agreement with SLB (Schlumberger), an $8 billion transaction announced in April, according to a press release.
Based in Orem, Utah, US Synthetic is a manufacturer of polycrystalline diamond inserts, bearings and other products for the global energy, mining, and industrial markets.
Industrials was the most active sector in Q4 dealmaking, according to S&P Global. Industrial bankers have also forecasted a 25 percent increase in M&A deals in the broad sector this year.
Warburg Pincus is reportedly in the advanced stages to sell Sundyne, a maker of centrifugal pumps and compressors to heavy industrials and energy markets, as reported by PE Hub in late 2024.
Check out this Year-end story on the industrials market and On the Block series story from April for more insight on industrials and manufacturing companies coming to the market.
Continuations aplenty
Continuation vehicle funds are at the center of the exit dilemma, with many private equity firms now participating in secondaries vehicle for portfolio companies than in recent years.
Both single-asset and multi-asset continuation vehicles are now utilized by 42 percent of private equity firms, according to a new report by MCAM Group, a placement agent to PE firms.
Continuation vehicles now represent $60 billion in total assets, or just 1.5 percent of the $4.2 trillion of assets under management held by PE firms. But it’s worth noting that 32 percent of continuation vehicles now hold multiple assets, suggesting a larger representation among portfolio companies, MCAM notes.
The IPO market, which has been sluggish since 2021, has significantly reduced the exit opportunities for some PE funds. Many firms are using continuation funds to wait out this slump before putting assets on the market.
MCAM says that while a weaker exit market via M&A or IPO has been the main driver of the rise in continuation funds, such vehicles are a natural evolution of the PE industry to become longer-term investors in companies.
“LPs have historically been reluctant to invest in continuation funds – that has now changed as PE firms have proven that they can build and realize additional value in certain assets held for longer,” said Lars Bjoergerd, managing director of MCAM.
As part of PE Hub’s ongoing coverage of companies for sale, strategic reviews of PE-backed companies have often concluded with a continuation funding arrangement rather than a traditional buyout, sources have told me.
SCI Capital Partners-backed ice distributor Reddy Ice was one such company that went up for sale in 2024 only to be dropped into a $1.6 billion CV backed by Apollo among others.
Check out these recent stories on CV deal activity:
That’s a wrap for me. Keep an eye out for the Europe edition of the Wire tomorrow from Craig McGlashan and the US edition from Rafael Canton.
Cheers,
Michael
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