Advent International zigs when others zag; Platinum Equity closes buyouts of Australasia biz

Happy Monday, Hubsters. MK Flynn here with the Wire.

Welcome to the first half of 2023. After a slow H1 for private equity deals, here’s hoping dealmaking picks up in H2!

In the coming weeks, we’ll be running interviews with private equity partners who will share their forecasts for H2.

If you’d like to weigh in, I’d love to hear from you at mk.flynn@peimedia.com.

In today’s news…
Buyouts just released its annual Buyouts 100. We’ve got an excerpt from an interview with Advent International, which made it into the top 10 for the first time. Advent’s John Maldonado says the firm’s strategy gives it an edge in dealmaking.

And we’ve got a Deep Dive into a multi-firm investment in a developer of innovative cancer treatments.

But first a quick look at three deals announced this morning.

Trio of deals
*Platinum Equity has completed its buyout of JELD-WEN Australasia windows, doors and related building products business from JELD-WEN Holding for approximately $461 million, Iris Dorbian reports.

“Platinum has decades of experience with corporate carve outs and we expect a seamless transition,” said Platinum co-president Louis Samson in a statement. “We are excited about the prospects for the Australasia business as a standalone company.”

*Vehicle Management Solutions, a portfolio company of Mill Point Capital, has acquired Integrity Parking Management, a Denton, Texas-based towing company, Iris writes.

*London-based IK Partners has made a majority investment in Cinerius Financial Partners, an independent wealth management platform, Irien Joseph reports. Headquartered in Zug, Switzerland, Cinerius assets over $11.13 billion. Previous investor Summit Partners, based in Boston, and the Cinerius management team have reinvested as part of the transaction.

Secret sauce
While Blackstone Group earned the top slot on Buyouts 100, one of the most aggressive climbers was Advent International, which vaulted its way from the 21st position in 2022 to the sixth slot this year with a five-year fundraising tally of about $52.9 billion. Key to this was the closing of last year’s largest flagship fund, the $25 billion Advent International GPE X, explains Buyouts’ Kirk Falconer.

Advent’s expansion since 1984 owes to several factors, managing partner John Maldonado told Kirk, including “the secret sauce of how we manage ourselves.”

Unlike its peers, Advent is not run by a CEO or senior managing partner. Uniquely, it is owned by 52 partners and overseen through a collaborative governance structure by 14 managing partners.

Here’s an excerpt from Kirk’s interview with Maldonado:

Does a consensus-based style provide an edge in dealmaking?
It does. When you’re a management team, even if you’re CEO, you typically don’t manage by fiat. There’s a level of influence you need to work with your C-suite, your customers, your other stakeholders. A lot of what you do to get things done is managing and leading to influence.

Because we are partner-led/partner-owned, there’s no one person who can dictate his or her will to the rest of the organization. We need to agree. That makes us good partners to management teams. The pitch tends to really land. And once we’re partners with them, they see the approach that is in the water internally makes for a tight-knit collaboration with our portfolio companies.

How is Advent’s flagship strategy differentiated?
We think of ourselves as being nimble, creative investors. We talk a lot about dynamic capital allocation: let’s not create targets, let’s find the best opportunities. Let’s create a big funnel geographically and by sector and then let’s not follow the crowd, let’s not do what everybody else is doing. Let’s zig when others are zagging.

This has served us well – recently, we focused our deal teams and organizational energy around not doing deals we call arithmetic buyouts. We don’t want to buy safe businesses you’re underwriting to teens returns. We want to transform large, complex businesses or support emerging high-growth disruptors. It’s a barbell strategy.

You see this in the deals we’re doing. Some of the most complex transformations we’ve ever done in our nearly 40-year history are being done right now.

I would take the example of two simultaneous divestitures from public chemical companies and merging them at the outset of the deal [DEM and Lanxess, rebranded as Envalior]. It was a monumental effort. One business was for sale – and the real unlock was using the relationships and the knowledge we had to approach another company about their division and agree to carve it out to be a buyer of the business that was for sale. And over the last many years, we’ve built out the resourcing we have in-house to support these companies once we own them.

We’ve got operational capabilities to bring this curated network of the best-of-the-best to portfolio companies to help them beat down whatever challenges they may be facing, whether functional in nature or strategic. And we’ve gotten bigger and better in terms of the ideas we’re bringing to the table to make this part of the business more robust.

Check out the full Buyouts 100 list here.

Promising results
BlackRock Alternatives and Nextech invested in ITM Isotope Technologies, thanks to the company’s unique position in the burgeoning radiopharmaceuticals market, the firms told PE Hub Europe’s Craig McGlashan in a Deep Dive.

Munich-headquartered ITM manufactures targeted diagnostic and therapeutic radiopharmaceuticals and radioisotopes for cancer treatment. It was founded in 2004.
BlackRock Alternatives and Nextech were part of an equity investment round of €255 million in the company in early June led by Temasek and also involving Qatar Investment Authority, Nextech, ATHOS and Carbyne.

The market for radiopharmaceuticals, which use radioactive ingredients to treat disease, is expected to reach a value of $15.3 billion globally by 2030 at a compound annual growth rate of 6.5 percent from 2023, according to Data Bridge Market Research.

Demand for the treatment comes from “the promising results it has shown as a complementary alternative to existing oncology diagnostics and therapeutics,” Nathalie von Niederhäusern, head of EMEA at BlackRock Private Equity Partners (PEP), told PE Hub Europe. BlackRock Alternatives invested via its PEP team, which has placed more than $3.2 billion across 75 deals in EMEA since 2001, with healthcare one of its biggest areas of focus.

But the investment in ITM in particular was in part down to chemistry.
“We believe that vertical integration is a strategic imperative due to the short half-life of radioisotopes and the complexity of manufacturing radioisotopes makes it the industry’s bottleneck,” said von Niederhäusern. “ITM has been able to position itself at the center of the ecosystem by being the industry’s preferred supplier.

ITM’s has “unique access to leading innovation in the field of radiopharmaceuticals,” said Kanishka Pothula, a partner at Nextech. The Zurich-headquartered global cancer therapeutics-focused venture capital firm invested and committed up to €70 million in this and subsequent funding rounds.

“From a competitive moat perspective, unique access to a global reactor and accelerator network with exclusive access to highly specialized buildings, personnel and other critical infrastructure, places ITM in a central position in a rapidly evolving and emerging field,” said Pothula.

That’s all fo today.

Tomorrow, we’ll be observing Independence Day, and there will be no Wire.

Obey Martin Manayiti will write to you on Wednesday, filling in for Chris Witkowsky, who’s on vacation this week.

Happy 4th of July!

Cheers,

MK