Good morning, Hubsters. MK Flynn here with the Wire.
At least one big LBO may be in the works, despite financing challenges in today’s choppy markets.
NCR is reportedly in exclusive talks with Veritas Capital, reports the Wall Street Journal.
The long-time maker of computer hardware originally known for cash registers and more recently for ATMs, has been moving into software and services. Its stock price has fallen, along with other tech stocks, and are down about 30 percent this year, closing at $29.10 on Monday, the newspaper points out.
It’s a tough time for big deals. Kohl’s and Walgreens Boots Alliance both scrapped transaction plans recently. Customer service software provider Zendesk, however, agreed on June 24, to a take-private by PE firms Permira and Hellman & Friedman for roughly $10.2 billion.
Exclusives. Meanwhile, in the middle and lower-middle market, activity continues.
PE Hub broke the news on two PE-backed deals this morning, with one story written by Aaron Weitzman and another by Obey Martin Manayiti.
Tower Arch Capital announced a majority investment in Intelligent Technical Solutions, an IT services provider headquartered in Las Vegas.
The deal for undisclosed terms includes a recapitalization with the management team, which includes CEO Tom Andrulis. Founded in 2003, ITS provides managed IT, cloud, cybersecurity voice over IP, phone and fiber internet services to small- and medium-sized businesses across the US.
Aaron spoke with Andrulis and Tower Arch partner Aubrey Burnett.
“This industry has a business model that has a lot of qualities we really like, providing essential services to small businesses that tend to be non-deferrable, reoccurring in nature and growing in demand,” explained Burnett.
ITS has a track record of acquisitions, which also attracted the PE firm. “Not only were they interested in pursuing M&A going forward but they had a good track record and experience already of identifying acquisitions and integrating them successfully with a really unique skill set among MSPs,” Burnett said.
ITS recently completed one acquisition and expects to close four more this year, Andrulis said.
Equity in education. Alpine Investors this morning announced the acquisition of FEV Tutor, a Boston-based online K-12 tutoring provider that seeks to “drive change by positively impacting learning outcomes for students from all backgrounds.” Obey spoke with FEV Tutor CEO Jim Tormey, who hails from Alpine’s CEO-in-residence program.
Two trends are driving demand for FEV’s offerings, according to the company: increased awareness of achievement and equity gaps; and increased acceptance of online learning in K-12 education.
As Tormey said, “Pre-pandemic, people just assumed that everyone had the same opportunities, but when many students were forced to go home where various socio-economic backgrounds were potentially harmful to their learning, it exposed that education is not equitable across this country, and that we need to do more to support the students.”
Read more here.
Before I sign off for the day, I want to encourage you to participate in the sixth annual Buyouts Emerging Manager Survey, conducted in partnership with Gen II Fund Services.
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I’ll be back with the Wire tomorrow.
Happy dealmaking until then,