Warren Buffett’s Berkshire strikes $10bn deal with Dominion Energy, Apax buys stake in Welsh, Carson’s InnovAge, Silver Lake approaches $15bn flagship

PE deals account for 17 percent of M&A activity, says new data and Berkshire Hathaway Energy has sealed a $10 billion deal with Dominion Energy.

Morning!

This is Sarah, filling in for Chris. How was everyone’s long weekend? I’ve been out in Wyoming doing mountain things, jamming in as much activity as possible with more than 15 hours of daylight.

Anyway, can you believe it’s time to reflect on the first half of the year?

Globally, the number of deals fell by 16 percent through the first half of 2020, according to data from Refinitiv. But private equity deals accounted for 17 percent of overall M&A activity over the period – the highest percentage since H1 2007. Read Karishma Vanjani’s full report.

This morning we have a couple deals to add to that list.
Berkshire Hathaway Energy, a unit of Warren Buffett’s Berkshire Hathaway, struck a deal to acquire Dominion Energy’s natural gas transmission and storage business.

The deal is valued at $9.7 billion including debt, with Berkshire’s energy division set to fork out $4 billion in cash for the assets. The transaction also represents Berkshire’s first bet since the pandemic escalated this spring. Read more.

And another healthcare deal: Apax Partners has come out on top in the process for InnovAge, acquiring a stake in the provider of PACE (Program of All-inclusive Care for the Elderly) from Welsh, Carson, Anderson & Stowe, sources familiar with the matter told me.

The pair of private equity shops will each hold 49 percent stakes in InnovAge, whose PACE programs help seniors continue to live independently, I learned. Simply put, the PACE program is considered an alternative to traditional nursing home care.

Back when the PACE program was created, you had to be a non-profit to participate. InnovAge was the first to convert into a for-profit status right before WCAS invested in the company in 2016. Today, the vast majority of PACE providers remain non-profit.

The interest in the company aligns with general themes that continue to play out across the healthcare industry, sources told me.

That includes seniors’ preference to live and grow older in their homes. It also includes a growing focus around social determinants of health, or the underlying fact that the majority of healthcare spend is driven by factors that are not clinical – whether that’s access to transportation or nutritious foods, socio-economic factors such as housing, education or literacy levels, or mental health.

Check out my full story to find out where valuation landed, and more detail around the pending deal and sale process.

Top Scoops
Silver Lake raised nearly $15 billion for its sixth flagship fund, which it launched into the teeth of the pandemic downturn, a source told Buyouts.

The downturn appears to have had no effect on Silver Lake’s fundraising process, which kicked off in the first quarter, Chris reported. Fund VI is expected to reach $18 billion as a final tally, which could come as soon as August, the person said.

Silver Lake closed its last flagship fund on $15 billion in 2017. Fund V was generating a 15.77 percent internal rate of return and a 1.2x multiple as of December 30, 2019, according to performance information from Washington State Investment Board.

Check out Buyouts’ full report.

That’s it for today’s rundown. As always, reach me at springle@buyoutsinsider.com with any comments, tips or just to say hello.