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MDP takes MoneyGram private for $1.8bn; Vista leads $1bn investment in Securonix

Madison Dearborn to acquire MoneyGram for $1.8 billion while Vista invests in Securonix.

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

Take-private deal. Big news out from Madison Dearborn Partners this morning. The PE firm is acquiring digital P2P payments specialist MoneyGram International for $11.00 per share in an all-cash deal valued at approximately $1.8 billion. The price represents a 50 percent premium to MoneyGram’s closing stock price on December 14, 2021, the last trading day prior to media speculation regarding a possible transaction, according to the companies. Payment processing continues to be one of the most attractive areas of fintech investing for private equity firms.

“MoneyGram is a leader in cross-border payments with one of the strongest brands and reputations in the industry,” said Vahe Dombalagian, managing director, MDP, in a statement. “We are looking forward to applying our substantial experience growing digital businesses and deep payments knowledge to help MoneyGram further strengthen its market-leading cross-border capabilities and enhance its digital platform.” The agreement includes a 30-day “go-shop” period. Since it was formed in 1992, MDP has raised over $28 billion and has completed more than 150 investments. The Chicago firm invests in five industry verticals, including financial and transaction services.

Cybersecurity. Vista Equity Partners just announced it is leading a $1 billion investment in Securonix, a provider of cloud-based security analytics and operations. Volition Capital and Eight Roads Ventures also participated. “Securonix is driven by technology innovation and a passionate mission to address the cybersecurity challenges faced by organizations globally,” Sachin Nayyar, the CEO and co-founder of Securonix. “We solve a very tough problem that requires excellence across multiple domains, including product engineering, threat detection/hunting, data science, and operations. This funding will help us accelerate investments in these areas and continue to provide a world-class service to our customers.”

Longer hold times. In secondaries news, Roark Capital is running a process for more time and capital on several assets out of older funds, including Inspire Brands, which holds a massive portfolio of popular restaurants like Arby’s, Buffalo Wild Wings and Sonic, sources told Buyouts. As Chris explains in his story on Roark, “The GP-led deal is an example of a GP including several assets in a secondaries process that will allow it to hold the investments longer than traditional private equity funds allow. GP-led deals drove secondaries volume to record levels last year, reaching more than an estimated $130 billion.”

The Big Quit. Recruiting and retaining talent have taken center stage for companies of all shapes and sizes. For private equity firms, the issues go beyond firm management, they also permeate value creation. To shine a spotlight on managing portfolio company talent in the “Great Resignation,” PE Hub turned to Angela Geffre, chief human resources officer, Sun Capital Partners, for some advice.

“Good talent is harder to attract, more expensive to add and more challenging to retain than ever before,” writes Geffre in a guest article. “For the private equity industry, this confluence of factors presents some unique problems. Even as firms keep a closer eye on their own internal talent pipeline and adjust their strategies for recruiting and engaging with employees accordingly, they must also be mindful of the effects of labor market constriction on their portfolio companies, especially among high-value employees.”

The Mom Project. Geffre shares four key strategies PE firms can adopt to keep themselves ahead of the curve to ensure that talent shortages and resignations won’t overly disrupt operational performance. Here’s just one:

“Now more than ever, over-recruiting and volume hiring is necessary – especially in industries such as retail and food service where turnover tends to be higher. Having a pipeline of qualified candidates that can fill gaps in the event of resignations can help ease operational challenges, but it requires leg work up front by HR teams. Proactively working with recruiters, as well as using new technology tools to widen the talent funnel, will allow HR managers to pivot quickly. HR leaders can also partner with external firms, like ECA Partners, to help continually source qualified talent. Companies might also consider looking for talent in new places. One such resource is The Mom Project, which focuses on helping skilled women with families return to the workplace. Being more creative about the pool of candidates in consideration can bring new ideas and vitality to the organization while at the same time driving diversity.”

40 under 40. Time is running out to submit entries for Private Equity International’s fourth annual rising stars of private equity list. PEI’s 40 under 40: Future Leaders of Private Equity will be published online and in the Future of Private Equity Special in early May. Submit your nomination by end of day Thursday February 17 here. The list will feature individuals across five categories: Investor (LP); Fundraiser; Dealmaker; Lawyer; Operator.

That’s all for now. Chris writes the Wire on Wednesdays, so you’ll hear from him tomorrow. And I’ll be back on the keyboard on Thursday.

Cheers,
MK