New Mountain buys PerkinElmer carveout; Gryphon closes Rootstock Software deal

New Mountain Capital has agreed to acquire PerkinElmer’s applied, food and enterprise services businesses for up to $2.45 billion.

Good morning, dealmakers. MK Flynn here with today’s Wire.

Uncertainty is certainly taking a toll on dealmaking, but I’m happy to report that this Monday morning, there are plenty of transactions to cover, with private equity firms and strategic buyers alike making their plays.

Mission-critical. New Mountain Capital has agreed to acquire PerkinElmer’s applied, food and enterprise services businesses for up to $2.45 billion in total consideration.

Expected to close early next year, the carveout includes the seller’s OneSource lab and field services, along with a portfolio of atomic spectroscopy, molecular spectroscopy, and chromatography instruments, consumables and reagents that serve the biopharma, food, environmental and safety and applied end markets.

“The business we are acquiring provides mission-critical solutions that enable scientists and researchers to perform their important work, including developing and manufacturing biopharmaceuticals, ensuring a cleaner and safer environment and food supply, and helping to provide high-quality products to demanding customers,” said Andre Moura, managing director, New Mountain. The New York PE firm “intends to continue to invest behind the business, as we pursue a dynamic growth strategy.”

For Waltham, Massachusetts-based PerkinElmer, the deal represents “a pivotal step in the significant portfolio transformation we have been executing on over the last several years,” said Prahlad Singh, president and CEO. “Following the close of the transaction, we will be a pure-play, high growth, high margin life sciences and diagnostics company with unique scale.”

Supply chain software. Gryphon Investors just announced the San Francisco PE firm has acquired Rootstock Software, a developer of enterprise resource planning software for manufacturing, distribution, and supply chain organizations, for undisclosed terms. Salesforce Ventures and the company’s management team re-invested in the deal alongside Gryphon.

“Global supply chain challenges over the last two years have highlighted the need for manufacturers and distributors to modernize the technology that controls their core business operations and processes,” said Jon Cheek, deal partner and head of Gryphon’s software group. He cited “the strong and increasing market demand” for the San Ramon, California-based company’s software.

Payments. On the strategic front, Global Payments is buying EVO Payments in a deal valued at $4 billion. The transaction will expand Global Payments’ geographic footprint into new geographies, including Poland, Germany, Chile and Greece and add scale to its existing markets in the US, Canada, Mexico, Spain, Ireland the UK.

Global Payments expects to finance the acquisition with cash on hand and a committed bank facility. Silver Lake will make a strategic investment of $1.5 billion in Global Payments in the form of a convertible note.

Motor oil. Valvoline has agreed to sell its auto lubricants products business to Saudi Arabia’s Aramco for $2.65 billion in cash while retaining most of its quick-lube services business. Last year, Valvoline said it planned to separate the two. Included in the deal is a long-term supply agreement in which Valvoline will buy motor oil from the products business.

“The partnership between the world’s leading energy producer and one of the world’s most trusted global lubricant brands creates a powerful combination that delivers meaningful benefits to employees, customers — including the retail services business — suppliers and investors,” said Sam Mitchell, CEO of Lexington, Kentucky-based Valvoline.

Valuation reality check. “Private equity performance has held relatively steady compared with the pain in the public markets so far this year,” writes Buyouts’ Chris Witkowsky. “That may start changing over the new few weeks.”

Chris points out that the secondaries market is already reflecting the new environment, with most funds trading at discounts to net asset value as of reference dates of December 31 or March 31.

While GPs that are fundraising may not be “writings things down as aggressively as they should,” as one LP put it, they may not be able to hide forever.

As Chris says, “All eyes are on second quarter valuation marks, which will start publishing in mid-to-late August.”

Interest rate impact. How are you handling these uncertain times? I’d love to hear your experiences and insights. I’m especially interested in: How are rising interest rates affecting your deals and your outlook for M&A? Send your thoughts to me at mk.flynn@peimedia.com.

I’ll be back on the Wire tomorrow with more.

Until then, all the best,

MK