CD&R raises the bar with largest single-asset deal on Belron, Thoma Bravo to buy Bottomline Technologies

Happy Monday!

Largest single-asset deal ever: Clayton Dubilier & Rice closed what appears to be the largest ever single-asset secondaries deal after assembling an investor group to invest about $4 billion for more time and capital to manage its portfolio company Belron, Buyouts’ Chris Witkowsky writes.

The deal, announced on Friday, was broken into two parts: a traditional M&A sale and a continuation fund process. CD&R sold a 39 percent stake in Belron, which operates glass repair brands globally, to Hellman & Friedman, GIC and Blackrock Private Equity Partners in a traditional M&A process.

The continuation fund, called CD&R Value Building Partners I, picked up the remaining 61 percent stake. Generally speaking, secondaries buyers lead continuation fund deals, Witkowsky writes. In this case, it’s not clear who the investors were in the vehicle. CD&R will continue to hold a 20 percent stake in Belron, primarily through the continuation fund, which was valued at $4 billion.

The fact that such a massive deal got done is significant for the secondaries market as it illustrates how much capital buyers are willing to expend on large deals. GP-led secondaries, especially single-asset deals like Belron, have driven the market to what is expected to be record volume levels in 2021.

Thoma Bravo to acquire Bottomline: Thoma Bravo continues to tear up the pavement as a software investor, announcing on Friday that it agreed to buy Bottomline Technologies, a fintech company that makes complex business payments simpler and more secure. Expected to wrap up in Q2 2022, the deal will take the Nasdaq-listed Bottomline private for $57 per share in cash, valuing it at about $2.6 billion.

Banks and enterprises use Bottomline’s solutions for payments, cash management, automated workflows for payment processing and bill review and fraud detection, among other things.

Thoma Bravo has been tracking Bottomline for some time as part of its fintech thesis, which focuses on the sector’s role in digital acceleration. The PE firm reports doing about 17 fintech platform investments and 20-plus add-ons. The goal for Bottomline is to build on its presence in the B2B payments and other markets, managing partner Holden Spaht said in a statement.

Penfund’s Fund VII holds initial close: As private debt fundraising gathers steam, Penfund secured most of the C$1.5 billion ($1.2 billion) target set for its seventh offering in a first close. The Canadian junior capital investor in November raised C$928 million for Penfund Capital Fund VII, partner Richard Bradlow told Buyouts.

Bradlow attributed LP demand in part to the growing appeal of the asset class, which is perhaps indicated in this year’s private debt fundraising. Capital raised by global funds reached nearly $150 billion as of September 30, up 19 percent from the same time in 2020, affiliate title Private Debt Investor reported.

Penfund’s long-time specialization in junior lending to mid-market borrowers also resonated with LPs, Bradlow said. About 90 percent of the firm’s deals involve PE sponsors operating in its target sectors, such as Leonard Green & Partners, Hellman & Friedman, Genstar Capital and OMERS Private Equity.