B2B software assets embraced in pandemic lock-down, Family offices look to take advantage of market dislocation, Insight Partners racks up $9.5bn

Partners Group's sale of Vermaat Group wins International Deal of the Year and family offices prepare to take advantage of pandemic-affected market dislocation.

Happy Monday!

I’ll take any good news these days and it seems like some of the hardest hit countries in Europe – Italy, Spain and France – find themselves on the downward slope of the pandemic curve. We’re still climbing the curve toward the peak here in the U.S. so the toughest days are ahead. But it’s good to see that all this distancing and economic pain seem to actually pay off.

Reuters is catching up to our reporting, confirming our scoop from February that Silver Lake is preparing to raise Fund VI.

I wrote that Fund VI could raise as much as $18 billion to $20 billion. That was before the world descended into corona madness, so it’ll be interesting to see how Silver Lake fares in this environment. From what I’ve been told, Silver Lake should be one of those in-demand GPs able to actually raise a fund right now because LPs will be only interested in committing to the most established managers they know well.

Winner: Check out our International Deal of the Year winner: Partners Group sale of Vermaat Group, a high-end catering and hospitality business in the Netherlands, to Bridgepoint Advisers (Bridgepoint owns PEI Media, which owns PE Hub). Vermaat was founded in 1978 as a delicatessen.

Vermaat’s employee pool grew from 2,300 in 2015 to more than 4,000 last year, growing the company to 360 locations. Partners Group completed 10 add-ons for the company across its corporate, leisure, hospital and travel sectors. The firm reaped a gross internal rate of return above 30 percent and a 2.4x on the sale, according to reporter Teddy Grant. Read more.

B2B: One strategy benefiting from the unprecedented pandemic-fueled lock down involve subscription software like subscription entertainment, online learning, e-commerce, marketplaces and payments, writes Milana Vinn, our tech guru on PE Hub.

It’s pretty obvious these days which tech is making a difference to business and just society in general. Most of our lives have become scheduled around the next Zoom chat.

“This is [a] time where businesses are looking to move faster, reduce their operating expenses, focus on their most important work – and often that means to partner with the best-in-class software providers that allow them to do so,” Brian Shortsleeve, managing director at M33 Growth, said.

An important factor to take into account when evaluating the risk positioning of a B2B software company is the structure of its client contract, GP Bullhound’s Eric Crowley told Milana.

If the company operates under an annual contract and its billing date is in January or February, the company is clear for the following year and the pandemic won’t influence revenue significantly, Crowley explained.

On the other hand, a usage-based contract means revenue is dependent on the number of transactions. Companies with these contracts are at greater risk, as the dollar amount of total transactions is prone to decline amid a weakened economy, Crowley added.
Read more.

Top Scoops
Some family offices are gearing up to take advantage of the pandemic-spurred market dislocation, bringing to bear their long-term, flexible capital into an uncertain environment, writes Justin Mitchell on Buyouts. Many companies facing immediate capital issues, but not looking to sell into a low-valuation environment, may have interest in bringing in an experienced partner to help them get through the downturn. Read more.

Many private equity-backed healthcare companies may be able to get access to emergency loans from the government, despite many PE-backed companies being shut out from such relief, writes Sarah Pringle on PE Hub. Possible exceptions include investments made in physician practice groups through a management service organization, or MSO, Sarah writes. Check it out here.

Have a great day! As always, hit me up with tips n’ gossip, feedback or just to chat at cwitkowsky@buyoutsinsider.com, on Twitter or find me on LinkedIn.

Update: This report has been updated to clarify that M33 is M33 Growth.