Blackstone to sell Simply Self Storage for $2.2bn; GTCR to buy supply chain software maker from Warburg Pincus

Good morning, Hubsters. MK Flynn here with the Wire.

Hope you had a good Barbenheimer weekend!

The working week is off to a strong start, with a big exit just unveiled by Blackstone.

Supply chain software continues to draw private equity interest – GTCR is buying a company in the sector from Warburg Pincus, and there’s a recent report on the trends driving deals in the industry.

We’ve also got a look at how one PE firm is leveraging the movement to modernize the Internal Revenue Service.

We’ll kick things off with the big exit.

Recession-resilient sector
Public Storage has agreed to acquire Simply Self Storage from Blackstone Real Estate Income Trust (BREIT) for $2.2 billion, as Iris Dorbian reports. The deal is expected to close in the third quarter.

BREIT bought Simply from Brookfield Asset Management for approximately $1.2 billion back in 2020.

Self-storage is a “highly fragmented sector,” said Frank Cohen, chairman and CEO of BREIT, at the time of that deal. “Self-storage is a resilient sector through economic cycles because of low tenant turnover, minimal maintenance costs and stable cash flows.”
Under BREIT’s ownership, Blackstone said it made investments into the company that enabled it to enhance the quality of the portfolio and management team and significantly increase Simply’s net operating income.

Today, Simply includes 127 properties in 18 states.

“Where you invest matters, and this transaction demonstrates the strong investor demand for the high-quality assets and platforms we have assembled within BREIT,” said Nadeem Meghji, head of Blackstone Real Estate Americas, in a statement about the Simply exit. “This sale is a terrific outcome for BREIT stockholders and enables us to further concentrate BREIT’s portfolio in its highest growth sectors. Public Storage is a leader in its space and will be a terrific steward of this portfolio.”

Supply chain specialist
Chicago-based GTCR has agreed to acquire Once For All, a compliance and supply chain management software provider based in Basingstoke, UK and Paris, from Warburg Pincus, as Irien Joseph reports.

“We will look to accelerate the company’s growth and scale through product innovation and the addition of capabilities through M&A,” said Mark Anderson, managing director and head of technology, media and telecommunications at GTCR.

“GTCR has a long investment history and experience in vertical software with compliance solutions, which we will leverage in helping develop strategies that drive further growth for the business and value for our customers,” Anderson said.

Warehouse management
Harris Williams published a report highlighting trends driving deals the investment bank worked on in the sector recently, such as IKEA franchisor Ingka Group‘s recent acquisition of Made4net from Thompson Street Capital Partners.

Four key areas where Harris Williams sees M&A opportunity:

• Software tools for warehouse management
• Freight forwarders
• Ocean logistics
• ESG enablement

Four macro trends contributing to a growing demand for supply chain technology:
• Expanding cross-border trade activity
• Increased transportation costs
• Growing focus on building resiliency and diversification through each node of the supply chain
• Rising adoption of software solutions across end markets to better handle supply chain volatility

PE Hub expects to see continued deal activity in supply chain software.

IRS upgrade
The federal government’s push to modernize the Internal Revenue Service over the next decade inspired IMB Partners to invest in eTelligent Group, Tarrus Richardson, the founder and chief executive of the Bethesda, Maryland-based private equity firm, told Obey Martin Manayiti in an interview about the deal, which was announced earlier in July.

Founded in 2005 and based in Woodcliff Lake, New Jersey with an office in Ashburn, Virginia, eTel develops digital transformation services, including cybersecurity and web services, for the IRS and the US Treasury department.

IMB’s investment in the software developer comes at a time when the government is channeling billions of dollars into bolstering the IRS.

“The IRS is currently going through a growth phase, given the recent increase in funds it has been appropriated, which is approximately $70 billion over the next 10 years, to improve taxpayer services and to upgrade its IT systems. Given this dynamic, we think it’s a unique moment in time to partner with eTel to support its growth initiatives,” Richardson said.

“While the overall economic outlook in the US is somewhat cloudy, the IRS is an essential government agency that has been underinvested in and is now looking to work with its core partners to support its growth as they look to improve taxpayer services,” he said.

IMB is looking at both organic and inorganic strategies to help scale eTel.

That’s all for today.

Tomorrow, we’ll begin a new rotation on the Wire, with Craig McGlashan writing to you on Tuesdays. Craig is the editor of PE Hub Europe, but on Tuesday mornings, he’ll be focused on deals in North America.

And on Wednesday’s, Buyouts’ Chris Witkowsky will continue to write to you.

I’ll be back on Thursday.

One more bit of “housekeeping:” I’ve got a new email address as of today. It’s mk.flynn@pei.group. Please reach out to me there!

Happy dealmaking,
MK