As the world awaits plans of another stimulus bill, President-elect Joe Biden has chosen Xavier Becerra – a defender of the Affordable Care Act – as his nominee for secretary of Health and Human Services. The nomination of the Democratic attorney general of California is set to be formally announced early this week along with several other top healthcare advisers, according to the New York Times.
Besides playing a role in the incoming administration’s response to the covid-19 pandemic, would the appointment have any meaningful implications for private equity investors in healthcare? Write to me your thoughts.
SPACs: I recently got the chance to catch up with John LeClaire and Chris Wilson of Goodwin Procter, the law firm representing Cano Health on its $4.4 billion merger with Jaws Acquisition Corp, a SPAC sponsored by real estate investor Barry Sternlicht.
“With the notion that there’s a liquidity option out there at valuations like Cano’s, regular way PE buyers may worry – ‘How am I going to ever buy anything at that price?!’” said LeClaire, co-founder and co-chair of Goodwin’s Private Equity group. That said, LeClaire cautioned, “it’s hardly a one-size fits all type of thing. A number of favorable things coalesced for Cano.”
As PE Hub has previously written, Cano had been running a private equity-focused sale process before the SPAC piece was introduced. A likely outcome in that scenario, while debatable, was in the $1 billion to $2 billion range – significantly below the value at which Jaws’ assigned the company, sources said.
The billion-dollar question investors have been asking themselves: How does a SPAC achieve such a high valuation relative to what you see in the PE world? “My phone has been alive with that question,” Goodwin’s Wilson said. The answer? “It’s the PIPE investors who are really crystalizing the valuation,” he said.
Across the Atlantic: North American SPACs aren’t limiting themselves to domestic targets it seems.
Reuters reported this morning that Paysafe, a London-based payments company, is nearing a deal to merge with a SPAC sponsored by Vegas Golden Knights owner Bill Foley. The transaction would value the business at $9 billion and is expected to leave existing owners Blackstone Group and CVC Capital Partners with significant minority interests, Reuters said. The merger with Foley Trasimene Acquisition Corp II would result in Paysafe listing in New York, according to the news service.
Makin’ money: Accel-KKR is set to return more than 10 times its money on the sale of TrueCommerce to Welsh, Carson, Anderson & Stowe, people familiar with the matter told PE Hub. The firm announced Thursday the completion of the sale of supply chain software provider TrueCommerce to WCAS.
Take-private: New York buyout firm American Industrial Partners has agreed to a $1 billion take-private transaction for SEACOR holdings. The deal represents a 14 percent premium over SEACOR’s closing stock price on Dec. 4. Read PE Hub’s brief on the deal.
Note to Readers: It’s that time of year … for the 21st time, the editors of PE Hub and Buyouts honor exceptional buyouts with our Deal of the Year Awards.
Winners are chosen in seven categories: Deal of the Year, Large-Market Deal of the Year, Middle-Market Deal of the Year, Small-Market Deal of the Year, Turnaround of the Year, International Deal of the Year, and Secondaries Deal of the Year.
Go here for more information and to read about rules and methodology. Also check out past winners. Last year, New Mountain took the crown with its exit of Equian.
If you have additional questions, email Private Equity Editor Chris Witkowsky at email@example.com.