February 25, 2022 | Year 15 | Volume 2 | Issue 9 |
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Good morning all and happy Friday –
Private equity buys of public companies are interesting to write up because they give us the opportunity to have some fun digging for the underlying valuations.
Just the other day, Apollo announced the buy of publicly traded Tenneco at an enterprise value of $7.1 billion. If you didn’t know, Tenneco makes and sells automotive products – engine parts, catalytic converters, shocks and suspensions, bearings and spark plugs - for original equipment and aftermarket customers under a stable of well-known brand names including Monroe shocks and struts and Walker exhaust systems. In case you were wondering, the founding of Tenneco dates to 1940 when it operated as the Tennessee Gas and Transmission Company (who knew?) until adopting the Tenneco name in 1966.
Jumping back to 2022, for the trailing twelve months, Tenneco had revenues of more than $18.2 billion, $1.3 billion of EBITDA, and capital expenditures of $372 million. If you do the math, this equals a 5.5x valuation multiple of TTM EBITDA and a 7.7x multiple of TTM EBITDA after capital expenditures. Michael Reiss, a partner at Apollo, leads the transaction which is expected to close in the third quarter.
Over the past year, we’ve been busy researching, designing and producing our first-ever directory of family offices. Now completed, the 2022 Family Office Allocator features more than 200 pages of detailed listings for more than 320 single-family offices and 130 multi-family offices located in North America and around the world that have an appetite for buyout funds. Lots more detail on the 2022 Family Office Allocator is available in the PEP online store – just click HERE. |
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The big read… New York City-based OceanSound has held an above-target closing of its debut fund with $780 million of capital. OceanSound was founded in early 2019 by Joe Benavides, Ted Coons and Jeff Kelly and makes control investments in North America-based technology and technology-enabled services companies valued from $150 million to $750 million.
Don’t forget… The latest Middle Market Musings podcast is now up with hosts Andy Greenberg and Charlie Gifford chatting with Riverside Partners professional Jon Lemelman. After nearly twenty years at Boston-based Riverside, Jon has co-founded Classify, a software company that helps businesses create smarter, stress-free digital workplaces. Jon shares with Andy and Charlie his perspective on deal-making at Riverside, talks about the experiences that led to Classify, and the change in perspective involved in capital formation and business management after so many years on the other side of the table. Click HERE to give the podcast a listen.
Be sure to check out “Today’s Great Quote” with words of wisdom from Rudyard Kipling.
Best – John
John P. McNulty
Publisher
Private Equity Professional
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Today's News and Transactions |
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Apollo Inks Deal to Acquire Tenneco
Enterprise valuation of $7.1 billion represents 7.7x multiple of TTM EBITDA after capital expenditures
Publicly traded Tenneco has agreed to be acquired by Apollo in an all-cash transaction with an enterprise valuation of $7.1 billion. Tenneco (NYSE: TEN) is a designer, manufacturer and seller of automotive products for original equipment and aftermarket customers in the light vehicle, commercial truck, off-highway, and industrial sectors. The company operates through four business groups – Motorparts (steering, sealing, and engine parts), Ride Performance (suspension, noise and vibration technologies), Clean Air (catalytic converters and diesel oxidation catalysts), and Powertrain (pistons, cylinder liners, bearings, and spark plugs). The company sells its products under... Read More
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Family-Owned JEGS Partners with Greenbriar
Greenbriar's buy of JEGS is its eighth platform investment over the past twelve months
Greenbriar Equity Group has acquired a majority equity interest in JEGS Automotive, an online retailer and distributor of aftermarket auto parts and accessories. JEGS was founded in 1960 by hot rod enthusiast Jeg Coughlin in a 4,000 square foot garage and parts shop in Columbus, Ohio. Today, the company offers more than two million SKUs of branded and private-label aftermarket auto parts and accessories to a national base of automotive enthusiast customers. JEGS is headquartered just north of Columbus in in Delaware, Ohio. Greenbriar’s investment is the first institutional capital for JEGS and will be used to support product and market expansion, technology... Read More
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Gallant Acquires Pro-Vac from RLJ
RLJ Equity acquired Pro-Vac in December 2018 from Peninsula Capital Partners and Silver Peak Partners
Gallant Capital Partners has acquired Pro-Vac, a provider of below surface infrastructure services, from RLJ Equity Partners. Pro-Vac’s services include hydro excavation; stormwater and sewer systems maintenance; pipeline inspection, jetting, repair and grouting; vacuum sweeping and other specialty services. Pro-Vac’s customers include contractors, municipalities, and utilities. Pro-Vac, led by CEO Graham Gill, was founded in 2002 and is headquartered near Tacoma in Puyallup, Washington. “We are incredibly excited to further grow Pro-Vac with the support of Gallant,” said Mr. Gill. “Gallant’s... Read More
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Accounting Merger Creates New National Firm
The transaction creates the eighth largest accounting firm in the US with more than $1.4 billion in revenue
Regional accounting firms BKD and DHG have agreed to merge, creating a top-10 and national professional services firm. Tom Watson, the current CEO of BKD, will serve as the CEO of the new organization; and Matt Snow, the current CEO of DHG, will serve as chairman. The name of the merged company will be announced before the expected close of the transaction in the second quarter of 2022. Springfield, Missouri-headquartered BKD – founded as Baird, Kurtz, & Dobson in 1923 – ranks among the nation’s top-15 accounting firms with approximately 3,300 employees. Charlotte, North Carolina... Read More
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Worldwide Camping Switches Sponsors
L2 formed Worldwide Camping to acquire sister companies Insight 2 Design and Elevate in March 2018
L2 Capital Partners has sold its camping equipment platform Worldwide Camping to Clearview Capital. L2 formed Worldwide Camping to acquire sister companies Insight 2 Design and Elevate in March 2018. Insight 2 Design is a product development company specializing in battery lighting and camping equipment, and Elevate, is a designer and manufacturer of camping equipment including tents, shelters, lights, outdoor furniture, and sleeping bags. Elevate sells its products primarily through online retailers under the company-owned brand Core Equipment. Both Insight 2 Design and... Read More
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IOP Sells Midwest Paper to McKinley Paper
The sale of Midwest Paper is the first from IOP’s third fund which closed in July 2017 with $450 million of capital
Industrial Opportunity Partners (IOP) has sold its portfolio company Midwest Paper Group to McKinley Paper Company. IOP acquired Midwest Paper in December 2019. Midwest Paper manufactures and distributes more than 400,000 tons per year of recycled containerboard used in corrugated packaging and recycled bag products. Founded in 1889, Midwest Paper employs more than 320 people and is headquartered southwest of Green Bay in Combined Locks, Wisconsin. During IOP’s hold period, Dave Mackin, an IOP operating principal, served as Midwest Paper’s CEO... Read More
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OceanSound Beats Target, Closes First Fund
OceanSound now has $1.15 billion in AUM and has completed five platform investments and nine add-ons
OceanSound Partners has closed its debut fund, OceanSound Partners Fund LP (Fund I), with $780 million of committed capital. The fund’s initial target was $550 million. Institutional limited partners in Fund I include pension plans, endowments, foundations, family offices, institutional consultants, asset management firms and insurance companies. New York City-based OceanSound is a middle-market private equity firm making control investments of $75 million to $300 million in North America-based... Read More
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O2 Invests in Digital Agency BerlinRosen
BerlinRosen investment is the seventh for the firm’s third fund which closed in January 2021 at $270 million
O2 Investment Partners has made an investment in communications and advertising firm BerlinRosen. BerlinRosen provides strategic communications, public relations, consulting and digital advertising services to clients in the hospitality, travel, philanthropy, labor, real estate and consumer technology sectors. Founded in 2005 by Valerie Berlin and Jonathan Rosen, the firm has more than 270 employees across its New York City headquarters and offices in Washington DC and Los Angeles... Read More
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The Whirlaway Market
GF Data's latest report notes that there appears to remain some room in the future for pricing to advance
Like a sprinting racehorse maintaining its stride on the last turn, middle-market M&A kept its pace as 2021 drew to the finish, according to GF Data’s just-released February report. Valuations in the fourth quarter averaged 7.5x, matching the elevated mark for Q3. GF Data’s 258 active private equity contributors reported on 151 transactions in the quarter meeting our parameters – Total Enterprise Value (TEV) of $10 million to $250 million and TEV/Trailing Twelve Months (TTM) Adjusted EBITDA of 3x to 15x. This outdistanced the 135 transactions reported in Q4 2020 when the market was coming to... Read More
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Harkness is Able on Kane Sale
Over three years of ownership, Harkness grew Kane Logistics' annual revenue to more than $235 million
Harkness Capital Partners has agreed to sell Kane Logistics, a national provider of third-party logistic services, to ID Logistics at an enterprise value of $240 million. Harkness first invested in Kane Logistics in March 2019. Kane Logistics provides third-party logistics services, including warehousing and transportation management, contract packaging and cross-docking to large and mid-market companies. The company’s customers include numerous consumer product companies and retailers, including Gallo, Sam’s Club, AGFA, Dow, and Hain Celestial. Kane had 2021 revenues of $235 million... Read More
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Varsity Exits Probo Medical, Keeps Minority Interest
Varsity invested in Probo in 2018 and the firm actively grew the platform through eight add on acquisitions
Varsity Healthcare Partners has agreed to sell a majority equity interest in Probo Medical to Avista Capital Partners. Probo Medical provides new, used and refurbished ultrasound systems and ultrasound probes. The company’s services include equipment sales, part sales, equipment rentals, depot repair service, equipment installation and de-installation, and field-based repair. Probo’s operating footprint includes fourteen facilities in the United States and Europe, the majority of which are ISO-certified. The company, led by CEO Michael Asmer, was founded in 2014 and is headquartered... Read More
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Leeds Closes Another Add-On for Simplify Compliance
Leeds formed Simplify Compliance in 2016 as a buy-and-build platform in the compliance services sector
Simplify Compliance, a portfolio company of Leeds Equity, has acquired Human Capital Institute. The buy of HCI is the sixth acquisition by Simplify Compliance since its formation by Leeds in 2016. Human Capital Institute (HCI) provides human resource and talent management education through corporate training, virtual workshops and conferences, and certification programs. The company is led by CEO Chuck Feltz and is headquartered in Cincinnati. “It was important to find a perfect home for HCI,” said Mr. Feltz. “With a great footing in the HR marketplace and a history of making... Read More
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Private Equity Professional has been serving the private equity industry since 2007 and is published by Sun Business Media, LLC. Questions or comments? Email our publisher John McNulty at John@peprofessional.com. |
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