Shutterstock picks up Giphy; Baird backs Freemarket; MSCP shares Ovation growth strategy

Baird Capital invests in fintech platform Freemarket.

Hello Hubsters! MK Flynn here, back from vacation.

There’s M&A news this morning featuring public tech companies, with Shutterstock agreeing to buy Giphy from Facebook parent Meta. More details on the deal, below.
In the private equity realm, we’ve got acquisition news from Baird Capital and an interview with Morgan Stanley Capital Partners about an exit.

Let’s kick off with the tech deal.

Express yourself
For Meta, the $53 billion sale of Giphy marks a disappointing – and expensive – end to a long legal battle with regulators.

Meta bought Giphy for $315 million in 2020, but in 2021 the U.K.’s top competition regulator ordered the Facebook parent to sell the animated images developer, ruling that Meta’s ownership of it would reduce competition unfairly in two markets, the display ad market and the social media market. After Meta lost an appeal, the company agreed to sell.
Meta’s loss appears to be Shutterstock’s gain.

Giphy’s library of GIFs and stickers draws more than 1.3 billion search queries on a daily basis and powers more than 15 billion daily media impressions, Shutterstock pointed out in the deal announcement.

“This is an exciting next step in Shutterstock’s journey as an end-to-end creative platform,” stated Shutterstock CEO Paul Hennessy. “Giphy enables everyday users to express themselves in memorable ways with GIF and sticker content while also enabling brands to be a part of these casual conversations. We plan to leverage Shutterstock’s unique capabilities in content and metadata monetization, generative AI, studio production and creative automation to enable the commercialization of our GIF library as we roll this offering out to customers.”

B2B tech adoption
Earlier today, Baird Capital unveiled a growth capital investment in London-based fintech platform Freemarket, providing a partial cash-out to existing shareholders.

“The B2B payment segment has lagged behind B2C from a technology adoption perspective, but as digitalization increasingly permeates the business landscape, B2B tech adoption within payments is increasing,” Baird partner Michael Holgate told PE Hub Europe’s Nina Lindholm.

Baird has offices in Chicago, London and Singapore and has raised more than $4 billion since 1989, investing in 338 companies.

A global platform and reach were “major” factors in Freemarket’s selection process for an investment partner, said Holgate. The plan for Freemarket centers on focus and execution, to ensure the business continues to deliver on its clients’ needs, according to Holgate.
“M&A targets exist but any acquisitions will be made on a selective basis to enhance platform capabilities, as opposed to scale plays,” he added.

Fertility services
Morgan Stanley Capital Partners, buoyed by the growing demand for fertility services, achieved a compounded annual revenue growth rate of above 20 percent in about three years during the hold of Ovation Fertility, Steve Rodgers, the firm’s managing director and head of healthcare, told PE Hub’s Obey Martin Manayiti.

MSCP sold the company to US Fertility, which is backed by Amulet Capital Partners, in April.
Headquartered in Nashville, Tennessee, Ovation is a provider of fertility laboratory services, including in-vitro fertilization (IVF), genetic testing, egg and embryo storage and other services for the fertility industry.

MSCP, which is the mid-market focused private equity team within Morgan Stanley Investment Management, invested in Ovation in June 2019.

“Infertility is a problem that a significant number of families face, and there are several additional trends that are accelerating leading to growth in the IVF market,” he added.
Rodgers said the firm completed four acquisitions during its hold period.

“The industry is fragmented and well positioned for consolidation, and there are a number of attractive ancillary services that are important parts of the fertility journey such as genetic testing, storage and surrogacy,” he said, adding that, “our platform benefited from offering the ancillary services to both our own partner physicians and non-affiliated fertility groups.”

Read Obey’s full story for more.

That’s all for today.

Buyouts’ Chris Witkowsky will be back tomorrow with the Wednesday Wire, and I’ll be with you on Thursday.

And if you happen to be vacationing in Delaware – as I was last week – be sure to check out the Peninsula Gallery in Lewes, where my friend John Aquilino is the Guest Artist of the Month. His seascapes are lovely!

All the best,