Good morning, Hubsters. MK Flynn here with the Wire.
In keeping with Tech Tuesday, Thoma Bravo just announced the closing of its take-private deal for Ping Identity. And earlier this morning, EQT said it completed its deal for BPEA EQT.
More on those transactions below, but first some thoughts on resilience.
On Language. The word “perseverance” shot to the top of Merriam-Webster’s lookups early last year after NASA’s Mars rover Perseverance landed safely on the red planet in February.
I’m predicting “resilience” will place high on the 2022 Word of the Year lists.
The word was prominent in yesterday’s earnings call from Bank of America, which reported a smaller-than-expected 9 percent drop in quarterly profit.
“Our U.S. consumer clients remained resilient with strong, although slower growing, spending levels and still maintained elevated deposit amounts,” chairman and CEO Brian Moynihan told analysts on a conference call.
In recent interviews with PE Hub, private equity sources have talked a lot about sectors they consider recession-resilient, with cybersecurity, healthcare and wealth management among those often cited.
To prove the point on the cybersecurity beat, Thoma Bravo just announced this morning that it has closed the take-private deal for Ping Identity for $2.8 billion.
“With digitization increasing across industries, identity and access management are of critical importance,” said Seth Boro, a managing partner at Thoma Bravo.
The firm has been snatching up companies focused on identity management all year. Last week, the PE firm agreed to buy ForgeRock in an all-cash deal valued at about $2.3 billion.
In August, the firm closed the acquisition of SailPoint Technologies, which develops enterprise identity security software, in a take-private all-cash transaction worth $6.9 billion.
Tough times may fuel deals in healthcare, Andrew Adams, co-founder and managing partner at Oak HC/FT, recently told PE Hub’s Aaron Weitzman. Improving efficiency is more important than ever, Adams said.
“If you’re a managed care company – can I process claims more accurately and faster? If you’re a hospital system – can I operate my call center more efficiently? If you’re a pharma company – can I develop this drug for you faster and for less money? These are major pain points that have nothing to do with inflation or recession. And the demand for these efficiencies is not slowing down. You would actually point to an accelerant.”
As for wealth management, Mercer Global Advisors, backed by Oak Hill Capital and Genstar Capital, is buying up a storm and demonstrating the resilience of the sector in challenging economic times. See a recent story by PE Hub’s Obey Martin Manayiti, who interviewed Mercer chief executive David Barton.
Secular growth. Earlier today, Stockholm-headquartered EQT announced the completion of its merger with Hong Kong-based Baring Private Equity Asia to create BPEA EQT.
I spoke with Christian Sinding, the CEO of EQT, back in March on the day the deal was announced.
“What’s fascinating about Asia as a region of the world is that it’s continuing to grow significantly faster – and will do so for the coming decades – than the rest of the world,” he said. “Forty-plus percent of GDP growth will be generated in that region. The private equity market itself is growing about twice as fast as in the western world, and we believe that will continue to accelerate. And what you’ve seen, first in North America, and then in Europe, is, as private equity becomes more well known as an asset class, and as the middle class grows, as companies get larger, as managers become more professional, as the capital markets develop – all these things contribute to more private equity activity. We think it’s a really interesting space to be in to make thematic investments in certain sectors and in certain types of companies across the region – and quite an important one to be in for us as a global private equity firm but also for our clients – to have exposure to the long-term secular growth that’s happening.”
See my interview with Sinding here.
And see more on today’s announcement in PE Hub Europe’s Dealflow newsletter, written by editor Craig McGlashan.
Craig also reported today that AXA Spain is in exclusive negotiations with Groupe des Assurances du Crédit Mutuel to potentially buy its subsidiary Groupe Assurances du Crédit Mutuel España, a Spanish health insurer.
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This will be my last Wire for a bit, as I’ll be on vacation – or taking annual leave, as they say in the UK.
A night at the opera is one treat in store for me, as I’ll be seeing my favorite opera, Verdi’s La Traviata.
Buyouts’ Chris Witkowsky, PE Hub’s Aaron Weitzman and PE Hub Europe’s Craig McGlashan will be writing the Wire until I return on the 31st.
Happy dealmaking until then,