Patient Square Capital to measure outcomes; Kinterra Capital banks on copper

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

With dealmaking slower than usual this year, PE firms have sped up their value creation activities. Many firms have turned inward and launched new initiatives designed to bolster their existing portfolio companies. Those efforts will also likely affect future dealmaking.

To that end, earlier this morning Patient Square Capital unveiled a new institute designed to measure the impact of the PE firm’s healthcare investments on patients. Highlights from that story are below.

We’ve also got look at how rising demand for copper in the age of electric vehicles and energy transition drove a recent deal from Kinterra Capital.

Before we get to those stories, let’s take a quick look at some deals announced over the last couple of days.

Regional bank merger
In the wake of Silicon Valley Bank’s demise, regional banks have been getting a lot of attention this year.

Earlier this week, Warburg Pincus and Centerbridge Partners said they are investing $400 million in the merger of regional banks Banc of California and PacWest, as Iris Dorbian reports.

Following closing and the asset sales, the combined company is expected to have approximately $36.1 billion in assets, $25.3 billion in total loans, $30.5 billion in total deposits and more than 70 branches in California.

“We are excited to back the strategic combination of two institutions we know well and respect,” said Todd Schell, who will join the board from Warburg Pincus. “The transaction provides an opportunity to execute a highly accretive balance sheet repositioning which generates substantial incremental earnings and positions the combined company for the next leg of profitable growth.”

Intelligence community
NewSpring Holdings has acquired Bridge Core, a McLean, Virginia-based provider of visual intelligence, cybersecurity, and other technical solutions to the U.S. government intelligence community.

“An era of rapidly proliferating and converging data presents unique, evolving challenges for the intelligence community,” said NewSpring general partner Lee Garber. “More than ever, we see the crucial role of a holistic solutions partner capable of elevating the transformation of data into precise and impactful insights for the numerous mission sets of the U.S. government.”

Digital advertising
Everstone Capital and Recognize have made a significant investment in India-based MediaMint, a digital advertising operations service provider.

The funding will help accelerate the company’s roadmap as it continues to serve digital marketing platforms, publishers, and agencies around the world.

“MediaMint is a leader in transforming the digital advertising workflows of the largest advertising platforms, publishers and agencies in the world,” said Avnish Mehra, vice chairman, private equity at Everstone Capital.

Now, onto PE Hub’s Deep Dives.

Improving outcomes
There’s a lot of talk at healthcare companies about improving outcomes for patients. Later this morning, Patient Square Capital announced earlier this morning an initiative to study and measure the impact of the private equity firm’s investments on patient outcomes and care across its portfolio companies.

Patient Square is naming Kelvin Baggett as managing director, head of patient impact and chair of the EMPIRIC Institute. An internal capability for the Menlo Park, California-based PE firm, EMPIRIC stands for Excellence in Medicine, Patient Impact Research, Innovation and Care.

Jim Momtazee, the managing partner of Patient Square, and Baggett spoke to PE Hub’s Rafael Canton about the initiative and the potential impact on Patient Square’s dealmaking in an exclusive interview.

“Effectively, we are taking a standard of care in the company we are invested in, whether that’s a product or a service, and then we are taking what the delta is based upon what we are doing,” Momtazee said. “We are measuring the delta based on the cumulative impact vis-à-vis the baseline for patients’ benefit into an objective number that we can measure and monitor.”

The institute will be integrated into the firm’s investment process as part of its transformation and growth team.

“It can help us do more and better,” Baggett said when asked about the impact of the EMPIRIC Institute on dealmaking. “It can help shape where we invest in the future and where our investments today might actually inform different decisions, where if we invest in a service, drug or category, there’s an opportunity to have a greater impact.”

Good outcomes for patients work hand in hand with good investments, said Momtazee.

Energy transition
Demand for critical minerals, such as copper, is set to rise with the acceleration of energy transition and the proliferation of electric vehicles, Cheryl Brandon and Kamal Toor, co-managing partners and co-founders of Kinterra Capital, told PE Hub’s Obey Martin Manayiti.

The Toronto firm’s Kinterra Copper USA recently acquired a 66 percent stake in the White Pine North copper project from Highland Copper Company.

The deal, which was announced earlier in July, provides Kinterra Copper with a controlling interest in the JV with majority board representation.

Located in the Western Upper Peninsula of Michigan, White Pine North is one of the largest independent copper development projects in the US, with approximately 5.7 billion pounds of copper and an $821 million net present value with a 22-year mine life, according to the company.

“Within all three aspects of the energy transition (which is transmission, generation, and storage), copper is a massive input,” Brandon said in an interview, adding that demand for copper is expected to double within the next decade.

The proliferation of electric vehicles is fueling demand. An EV carries up to four times the amount of copper as a gas-powered car.

As the US is priming to be a giant EV battery technology producer with multiple gigafactories underway, Brandon said she expects their investment to be a key player. “We typically partner with auto manufacturers and battery manufacturers and come up with long-term arrangements and supply contracts to be able to provide the critical minerals.”

Reach out
Earlier in the year, we changed our company name from PEI Media to PEI Group to reflect our growing business in data, conferences, memberships and more. As our revamped website says, “PEI Group is a subscriber-focused business intelligence company.”
Over the last few weeks, we’ve been updating our email addresses to reflect the change. We’ll keep you posted as team members’ email addresses move over to the new domain.
Please reach out to me at my new email address: mk.flynn@pei.group. I’d love to hear from you.

And while we’re talking about us, I’ll mention that we’ve got an opening for a Senior Reporter to join our growing team at PE Hub. If you know a journalist with experience covering private equity who’s based in New York, send ‘em my way.

Tomorrow, Rafael will fill in for Obey, who has the day off. And I’ll be back on Monday.

Happy dealmaking,

MK