TSCP closes sale of Made4net to IKEA; FFL shares exit strategy for HR specialist ProService

Good morning, Hubsters. MK Flynn here with the Wire.

After a sluggish start to the week, this morning we’re seeing a flurry of deal announcements.

We’ve got deal news to share from Blackstone, TSCP, Enlightenment Capital and Wind Point, thanks to Iris Dorbian’s early morning reporting.

We’ve also got a Deep Dive from Obey Martin Manayiti on a recent exit for FFL Partners.

And we wrap things up with a podcast worth revisiting as June begins.

Let’s take a quick look at the news.

Big deal
Blackstone has closed its previously announced acquisition of a majority stake in Emerson’s climate technologies business.

According to the terms of the agreement, Emerson received upfront about $9.7 billion at the close. The deal puts the business at a valuation of $14 billion. The new standalone business will be named Copeland.

“Copeland has grown into the market leader in supplying critical components for residential, commercial and industrial climate control solutions, and we are thrilled to support its next phase of growth as a world-class standalone company,” said Joe Baratta, global head of Blackstone Private Equity in a statement.

IKEA exit
Thompson Street Capital Partners (TSCP) has completed the sale of Made4net, a Teaneck, New Jersey-based provider of cloud-based warehouse management system and supply chain execution software, to Ingka Investments, the investment arm of Ingka Group, which owns IKEA.

In conjunction with the acquisition, Ingka Group will be rolling out Made4net’s software solution across its global footprint of IKEA stores as part of its broader digital transformation and omni-channel commerce strategy.

iNovex, which is backed by Enlightenment Capital, has agreed to acquire Columbia, Maryland-based cybersecurity company Secure Innovations.

The Kleinfelder Group, a portfolio company of Wind Point Partners, has acquired Austin-based Doucet & Associates, a provider of civil engineering, environmental permitting, surveying and construction management services.

Remember the Great Resignation?
The pandemic drove demand for human resources services, as apprehensive employers sought to manage new challenges, including remote work, writes PE Hub’s Obey Martin Manayiti.

One company that benefited from the higher HR demand was ProService, which grew by more than 2.5x during FFL Partners’ six-year hold period, managing partner Cas Schneller told Obey.

Earlier in May, the San Francisco-based firm exited its investment in ProService, selling its stake to Silver Lake.

Headquartered in Honolulu, ProService offers a suite of HR services such as payroll, benefits, insurance, compliance, administrative and risk management services cutting across different sectors including construction companies, restaurants, hospitality, professional services, education and more.

“The goal was to continue to drive double digit growth rates in Hawaii,” said Schneller. “To do that, we invested in technology to improve the product. We also invested in the management team and brought higher powered leaders aboard who could operate at a bigger scale.”

But a few years into the investment, covid hit, and many employers didn’t know how to steer their way out of the pandemic. Enter ProService.

“The company had thousands of clients, and each of their clients are small businesses,” explained Schneller. “A lot of the small businesses were hurt very badly during covid, and a lot of them were forced to lay off employees and downsize.”

Over the last few years, demand has grown.

“As time has passed, HR has been recognized more as a strategic area, and the best companies in the world are very good at their HR because it means that you are good at attracting, retaining and developing the right kind of talent. The company can reduce turnover and create opportunities for its people,” Schneller said.

LGBTQ+ support
June is Pride Month, which offers a good opportunity to listen to last year’s Private Equity International podcast about how private equity firms can support LGBTQ+ employees. The podcast episode is from our On the Minds of Millennials miniseries. In this episode, Christina Drakos, director at Advent International, and Brandon Donnenfeld, managing director at KRR, draw on their own personal journeys and share their insights.

That’s our newsletter for today. Obey will be back tomorrow with Friday’s Wire, and I’ll see you on Monday.

Happy dealmaking until then,