Good morning, dealmakers. MK Flynn here with today’s Wire.
Here’s a deal to start your day: KKR just announced a growth investment in FGS.
But, yes, it’s slow out there. And now we’ve got the numbers to prove it. See below for data on March dealflow. One silver lining: it’s a great time to attend conferences and network with colleagues.
Next week, I’ll be interviewing a Blackstone exec at a PEI Group conference in New York. Details below.
First up, a “boardroom issue”
This morning, KKR announced a growth investment in FGS Global, a strategic advisory and communications firm headquartered in New York with offices all over the world.
KKR will become a minority investor alongside FGS employees and majority shareholder WPP. The PE firm is making the investment through the KKR European Fund VI, which announced its final close earlier this month.
“Our investment in FGS is the latest example of our focus on proprietary, strategic partnership investments where we are providing long-term capital and a global network of resources to an entrepreneurial management team and alongside a world-class business,” Philipp Freise, partner and co-head of European Private Equity at KKR. “Stakeholder engagement is a boardroom issue and we are confident that FGS, with whom we have enjoyed a long-term relationship, is well positioned to capitalize on significant growth opportunities ahead as a global category leader in the growing management consulting service industry.”
FGS was created through a combination of strategic communications and public affairs firms: Finsbury, The Glover Park Group, Hering Schuppener, and Sard Verbinnen & Co.
“Global private equity deal value and volume tumbled year over year in March and in the first quarter,” finds new data and analysis from S&P Global Market Intelligence.
In March, the number of deals declined 48.9 percent to 885, down from 1,733 a year prior.
Deal value for the month was down 37.1 percent year over year. Overall private equity entries for March totaled $63.42 billion, compared with $100.86 billion in the same period a year ago.
For Q1, the number of deals slipped to 2,873 deals, down from 5,017 transactions in 2022. Total transaction value declined 48.6 percent year over year to $122.81 billion from $238.91 billion.
Tech remains bright
The technology, media and telecommunications sector continued to receive the most capital from investors during the month, bringing in $32.97 billion in total transaction value, up slightly from $32.16 billion in the same period in 2022.
The largest PE transaction announced in March was Silver Lake and Canada Pension Plan Investment Board’s agreement to buy experience management (XM) specialist Qualtrics International from SAP America for about $10.44 billion in an all-cash take-private deal.
As I mentioned yesterday, PE Hub’s Obey Martin Manayiti is working on a story about what’s driving PE-backed enterprise software deals. Look for that later in the month.
The second-biggest announced deal for the month was Apollo’s $8.16 billion acquisition of specialty chemical and ingredient distributor Univar Solutions from Parcom Capital Management.
Deals in the industrial and financial services sectors both declined in March. Industrial deals reached $11.15 billion in total deal value, down from $23.78 billion in March 2022; financial companies secured $7.53 billion last month, down from $17.31 billion the previous year.
One deal announced in March suggests the events industry is back: Blackstone is buying Cvent from Vista Equity Partners for $4.6 billion in a take-private deal.
“The continued events and travel recovery is one of Blackstone’s highest-conviction investment themes,” said David Schwartz, a senior managing director at Blackstone, in the deal announcement. “Given our extensive experience in the hospitality, events and real estate sectors, we believe Blackstone is well positioned as a growth partner for this exceptional business.”
Vista acquired Cvent in 2016 for $1.65 billion. Since then, Cvent has more than tripled its annual revenues, according to the company.
Speaking of Blackstone and conferences….
On Wednesday, April 19, I’ll be conducting a Fireside Keynote Chat with Arielle Gross Samuels, managing director, global head of marketing for Blackstone, at PEI Group’s 18th annual Investor Relations, Marketing & Communications New York Forum. (Note: PEI is the owner of PE Hub.)
We’ll be discussing “future-proof marketing” for private markets.
Before joining Blackstone, Samuels worked at Meta (Facebook), serving as the global head of ESG business and previously business lead of global business marketing. Prior to Meta, Samuels worked at Deloitte in engineering consulting.
It should be a very interesting conversation, and I hope to see you there!
That’s it for today. Tomorrow, Buyouts’ Chris Witkowsky will write the Wire, as per usual on Wednesdays. I’ll be back on Thursday.
Until then, happy dealmaking,