Good morning! Greetings from the Metuchen compound.
Doing good: Continuing on our theme of private equity firms stepping up and helping out during this worldwide emergency, Thoma Bravo contributed $2 million to a non-profit focused on supporting students and families of San Francisco Unified School District. Spark* SF Public Schools has raised more than $4.2 million over the past two weeks.
Thoma Bravo’s gift will be used to fund meal distributions to local San Francisco children and their families during coronavirus-induced school closures. It also will be used to purchase WiFi hotspots and other devices to provide access to online learning. Read out the news brief here.
Thoma Bravo joins other firms like Leonard Green and MiddleGround Capital stepping up to support portfolio company employees and/or the wider community during the global shutdown. Have you heard of others? Hit me up at firstname.lastname@example.org. I want to hear about the good stuff too, along with The Drama.
Incentives: Here’s something on the theme of looking forward to a time when we’re all out of our houses and back to whatever ‘normal’ will be once this virus releases its grip on us.
Once M&A activity comes back, GPs more than ever are going to be looking for help sourcing deals. In the competitive market of the past few years, deal sourcing has been a main point of focus for firms looking for any sort of edge over the competition.
Most firms pay adviser fees to find and close deals, but a number of smaller PE firms have gotten creative in rewarding intermediaries for landing lucrative targets, according to Karishma Vanjani, our new reporter at PE Hub.
Branford Castle Partners hands out airline miles (which might not be so useful at the moment), for introductions that don’t even lead to closed deals. Shoreline Equity Partners, which targets companies with EBITDA up to $25 million, has an incentive program that includes a “trip of a lifetime.”
Trips can include a ski adventure in the Swiss Alps to destination vacations in Dubai or the Maldives, as well as VIP experiences at major sporting events.
Trivest Equity provides a three-year lease on an S-Class Mercedes Benz to an intermediary who introduces them to their next platform company, in addition to a fee. Read more.
Deal origination is vital for private equity firms of all sizes but smaller PE shops usually have a large abundance of opportunities, especially if they invest in founder-owned or closely-held businesses. For many, engaging specialized buyside advisers to canvas the market and narrow down a targeted list of promising opportunities is crucial.
What are you seeing out there in terms of incentives for bringing deals to PE firms? Reach me at email@example.com.
Turnaround investor Catalyst Capital is anticipating an economic slowdown lasting for a long time, potentially through 2020 and into 2021, spurring an uptick in distressed opportunities, writes Kirk Falconer on Buyouts.
“We anticipate an extended downturn due to the health crisis, not a V-shaped recovery, Gabriel de Alba, Catalyst’s managing director and partner,” told Kirk. “The historical reduction in demand and resulting economic and financial dislocation is creating shockwaves across a multitude of private and public companies.”
Ardian and Lexington Partners are set to buy a $1 billion-plus portfolio of fund stakes being sold by Canada Pension Plan Investment Board in a deal that was agreed before the pandemic-induced downturn. It’s not clear if the deal has closed yet and it’s possible buyers are trying to renegotiate the price since the market dislocation. Check it out here on Buyouts.
Have a great day! Reach me with your thoughts, tips, gossip, whatever at firstname.lastname@example.org or find me on LinkedIn.