PE firms like TPG speed up EV deals; Red Dog-backed Mammoth buys more car washes

Despite recession fears, the labor market continues to stay strong.

Happy Fri-yay, dealmakers! It’s Aaron Weitzman here on the wire.

Although “the R word” is being discussed heavily, it seems as though the labor market is staying strong. The June jobs report was released this morning, with 372,000 jobs added in the month and the unemployment rate was unchanged at 3.6 percent and close to historic lows.

That’s encouraging news for PE firms, many of whom tell us the biggest challenge for their portfolio companies these days is to hire and retain employees.

Electric vehicles. PE Hub’s Obey Martin Manayiti spotted a trend with PE firms investing in electric vehicles, with TPG among the buyers.

“Historically, the unit cost of operating an electric vehicle was cheaper, but the total cost of ownership was expensive,” said Scott Gilbertson, partner, TPG Growth. “I think the democratization of vehicles and the knowledge of these EVs and charging locations is going to create a meaningful acceleration of electric vehicle adoption.”

Other recent buyers include Clearlake Capital, Lincolnshire Management, Aterian Investment Partners and Spring Lane Capital.

Read the whole story here.

Car wash boom. Another trend we’ve been tracking this summer is that PE firms are snatching up car washes. Obey wrote a feature on this back in May.

And now, Red Dog Equity-backed Mammoth Holdings has bought three more car washes.
Just like dry cleaners, car washes have traditionally been local businesses run by a family or a group of friends. “As platforms have emerged, larger PE groups are taking notice and have platforms of significant scale to now invest in,” Mammoth’s Gary Dennis told Obey back in May.

Fund closure. Buyouts’ Chris Witkowsky wrote about TCG Capital’s closure of the firm’s third fund.

“TCG Capital, the investment firm formed by Peter Chernin, the former number two at News Corp, has closed its flagship commingled fund on $1.3 billion, beating its initial target,” wrote Chris. “TCG straddles the line between venture capital and growth equity, backing young and aggressive companies like Barstool Sports, Exploding Kittens and Goldin Auctions. It looks for brands with distinct customer loyalty with the ability to monetize that relationship through products, subscriptions and events.”

Read the whole story here.

I wonder what investments TCG will make with the money raised? As always, if you here of any M&A market chatter, I am always interested in that. Feel free to let me know what you are seeing and hearing out there. Hit me up at aaron.w@peimedia.com. While I am highly interested in any healthcare deals, I am also open to hearing about any deals, regardless of sector.

Speaking of healthcare…

In case you missed it. Earlier this week, we published my interview with Devin O’Reilly, managing director of private equity and North America head of healthcare at Bain Capital as part of PE Hub’s ongoing healthcare spotlight series.

O’Reilly dished about the firms’ approach to healthcare investing, some themes Bain is investing in and about the firms’ longer-than-average hold time for its healthcare assets.

“We have a longer-term orientation than many of our peers with an average hold period over six years,” said O’Reilly. “This is because we’re looking for businesses where there’s some type of inflection point, not businesses that are aiming to maintain the status quo.”
Bain is “not in the market to quickly flip businesses.”

“We are looking to partner with companies and accelerate their growth journeys at points of inflection. Our hold periods tend to be longer, and we’re very patient in that regard,” he said.

Read the whole story here.

I will be releasing two more healthcare spotlight series stories next week, featuring Court Square Capital Partners and Signet Healthcare Partners. As a reminder, I am always looking to profile more PE firms investing in healthcare, so send ‘em my way!

That is a wrap for me. I am currently in the middle of a New England road trip! I am writing this from the Berkshires in Massachusetts. Then on Saturday, I’m off to my old stomping grounds of New Hampshire for a few days to see family and then ending the trip in Boston, where I will be writing to you again next Friday.

MK Flynn will be back with another edition of the Wire on Monday.

Hope you all have a great weekend!

Cheers,

Aaron