Insight Partners, Clearlake explore options for Diligent in potential $4bn deal, Waud teams up with ex-MatrixCare chief, Handy use of GP stakes funds as a succession tool

Insight and Clearlake mull options for Diligent and Waud teams up with industry veteran John Damgaard to build a healthcare IT platform.

Happy Wednesday!

We’ve got a big scoop on PE Hub this morning, courtesy of tech guru Milana “The Assassin” Vinn. Insight Partners and Clearlake Capital are exploring options for a company called Diligent. A deal could value the company at around $4 billion.

Diligent provides access to board directors and senior executives to time-sensitive and confidential information. It works to improve how board materials are produced, delivered and collaborated across any device, serving 140,000 executives globally, Milana writes.

Insight took Diligent private in April 2016 for $624 million, according to an announcement at the time. Clearlake took a minority position in Feb. 2018.

Check out the particulars here on PE Hub.

Insight Partners last month agreed to acquire Veeam Software, a Swiss provider of backup solutions for cloud data management. Under Insight’s ownership (the deal is expected to close in Q1), Veeam will become a U.S. company with a U.S. leadership team. It will continue its global expansion from offices in 30 countries. Insight Partners made an initial investment in the company in early 2019.

Stakes: Yesterday we talked about the importance of succession planning to ensure the future viability of a PE franchise. Today we have a story from Kirk Falconer about whether GP stake sales play any sort of role in encouraging succession planning. This is a fairly controversial debate.

LPs have often told me they see minority stake deals as a way for the older generation at firms to monetize their interests. This can be hard to do for private equity firms, which don’t have a lot of options for monetizations. One path is going public, which is rarely used.

Minority stakes deals have emerged as a way to monetize interests without inviting the scrutiny and reporting burden of the public markets. Minority stake firms buy interests usually under 25 percent in exchange for a share in fees and carry.

Bain & Co’s 2019 global private equity report identifies successions as the “primary motivation” of private equity managers selling minority stakes. Without firms that invest minority stakes in GP management companies, firms have few options for monetizing the large ownership and performance fee interests of founding partners nearing retirement, Kirk writes.

However, successions are usually not the publicly stated reason for doing minority stake deals. Bain said this is because firms don’t want to appear to be cashing out the teams responsible for historical performance.

Not everyone agrees successions play a big role in driving GP stakes deals. Michael Rees, founder and head of Dyal Capital Partners, said in the firm’s experience, the number of deals with a succession focus account for about 4 to 6 percent of the total, Kirk writes.

Even when managers are actively planning a succession while selling a minority interest, it’s rarely the main driver, Rees said. Firms instead seek permanent minority capital to strengthen to the balance sheet and fund new product development and future GP commitments.

Read Kirk’s story here on Buyouts. What do you think about such deals? Reach me at cwitkowsky@buyoutsinsider.com.

Top Scoops
Waud Capital Partners partnered with industry veteran John Damgaard to build a healthcare IT platform. Waud committed $150 million of equity capital to the partnership, writes Sarah Pringle on PE Hub. Check it out here.

Newbury Partners is allowing investors in its debut fund to sell their stakes in the 12-year-old pool, I wrote on Buyouts today. The process does not include a staple component.

Check it out here.

Have a great day! Reach me with good tips n’ feedback at cwitkowsky@buyoutsinsider.com, on Twitter or find me on LinkedIn.