CCP, Global Infrastructure Partners to acquire Allete for $6.2bn

BY Richard Summerfield

US utility group Allete is to be acquired by the Canada Pension Plan Investment Board (CPP Investments) and Global Infrastructure Partners (GIP) in a deal worth $6.2bn, inclusive of debt.

Under the terms of the deal, the firms will make a cash payment of $67 per share to take Allete private, a 19.1 percent premium over the company’s closing share price on 4 December 2023, the day before media reports that the power company was exploring a sale began to appear.

Allete’s board of directors has unanimously approved the transaction, which is set for completion in mid-2025, subject to shareholder approval and regulatory consents. Following completion, Allete will withdraw from the New York Stock Exchange and revert to private ownership.

“Our ‘Sustainability-in-Action' strategy has secured ALLETE’s place as a clean-energy leader,” said Bethany Owen, chair, president and chief executive of Allete. “Through this transaction with CPP Investments and GIP, we will have access to the capital we need while keeping our customers, communities and co-workers at the forefront of all that we do, with continuity of our day-to-day operations, strategy and shared purpose and values.”

She added: “CPP Investments and GIP have a successful track record of long-term partnerships with infrastructure businesses, and they recognize the important role our ALLETE companies serve in our communities as well as our nation’s energy future. Together, we will continue to invest in the clean-energy transition and build on our 100 plus-year history of providing safe, reliable, affordable energy to our customers.”

“Together with GIP, we look forward to bringing our sector expertise and long-term capital to support ALLETE’s strong management team as they continue to deliver safe, reliable, affordable energy services to their customers,” said James Bryce, managing director and global head of infrastructure at CPP Investments. “ALLETE is at the forefront of the clean energy transition and we are thrilled to support the delivery of the company’s ‘Sustainability-in-Action’ strategy, which we believe will generate substantial value both for ALLETE’s customers and CPP contributors and beneficiaries.”

“GIP, alongside CPP Investments, look forward to partnering to provide ALLETE with additional capital so they can continue to decarbonize their business to benefit the customers and communities they serve,” said Bayo Ogunlesi, chairman and chief executive of GIP. “Bringing together ALLETE, with its demonstrated commitment to clean energy, with GIP, one of the world’s premier developers of renewable power, furthers our commitment to serve growing market needs for affordable, carbon-free and more secure sources of energy.”

Allete’s existing management team, including Ms Owen, will continue to lead the company upon completion of the deal. The company’s headquarters will remain in Duluth, and commitments have been made to retain the workforce and maintain current compensation and benefits programmes.

News: US utility Allete goes private in $6.2 billion deal

GTCR acquires AssetMark in $2.7bn transaction

BY Fraser Tennant

In a deal that expands the private equity company’s footprint in the financial services industry, GTCR is to acquire wealth management platform AssetMark Financial Holdings, Inc. for approximately $2.7bn.

Under the terms of the definitive agreement – which has been unanimously approved by the AssetMark board of directors – GTCR will acquire a 100 percent interest, with AssetMark stockholders receiving $35.25 per share in cash.

Since its inception, GTCR has focused on identifying and partnering with management leaders in core domains to acquire and build market-leading companies through organic growth and strategic acquisitions. To date, it has invested more than $25bn in over 280 companies.

“AssetMark is a leader in the wealth technology industry, combining a high-quality service orientation with innovative technology and products that financial advisers rely on to support their clients,” said Collin Roche, co-chief executive and managing director at GTCR. “We would like to congratulate Huatai Securities, AssetMark’s majority shareholder, on the substantial increase in the scale and profile of the business during its ownership.”

With approximately $117bn of assets on the platform, AssetMark delivers an extensive suite of technology solutions and service offerings which enable independent financial advisers to create and manage customised client investment portfolios, report and analyse performance, custody assets, attract new clients and grow their advisory business.

Serving over 9300 financial advisers and over 257,000 investor households, the AssetMark platform differentiates itself through its comprehensive end to end offering and the personalised, high-touch service model it delivers to its financial adviser customers.

“This transaction will deliver substantial value for our shareholders, supports key elements of our strategy, and creates new and exciting opportunities for our employees,” said Michael Kim, chief executive of AssetMark. “In partnership with GTCR, AssetMark will continue to focus on expanding offerings for our clients with new product capabilities while maintaining our reputation for excellent client service.”

The transaction is subject to customary closing conditions and required regulatory approvals and is expected to close in Q4 2024. Upon completion of the transaction, AssetMark’s common stock will no longer be listed on any public market.

Michael Hollander, managing director at GTCR, concluded: “GTCR expects to support AssetMark as the company pursues additional inorganic M&A opportunities to further expand the leading service offering it provides financial advisers.”

News: PE firm GTCR to buy wealth management platform AssetMark for $2.7 bln

AIR Communities goes private in $10bn deal

BY Fraser Tennant

In a move that takes the real estate investment trust private, US alternative investment management company Blackstone is to acquire Apartment Income REIT – known as AIR Communities – in an all-cash transaction valued at approximately $10bn.

Under the terms of the definitive agreement, Blackstone will acquire all outstanding common shares of AIR Communities for $39.12 per share. Subject to and upon completion of the transaction, AIR Communities’ common stock will no longer be listed on the New York Stock Exchange.

The transaction has been unanimously approved by the AIR Communities board of directors.

“The transaction will strengthen the AIR mission to provide homes for others, be a great place to work, act as responsible stewards of AIR communities, and be a trusted partner to AIR investors,” said Terry Considine, president and chief executive of AIR Communities. “The business the AIR team has built will be improved and expanded by collaboration with Blackstone and a shared focus on serving residents and investing wisely.”

AIR Communities’ portfolio consists of 76 high-quality rental housing communities concentrated primarily in coastal markets including Miami, Los Angeles, Boston and Washington DC. Blackstone plans to invest more than $400m to maintain and improve the existing communities in the portfolio and may invest additional capital to fund further growth.

“AIR Communities represents the highest quality, large scale apartment portfolio we have ever acquired, and is located in markets where multifamily fundamentals are strong,” said Nadeem Meghji, global co-head of Blackstone Real Estate. “We are very impressed by the terrific operating team at AIR Communities and look forward to working closely with them, while continuing to deliver a fantastic resident experience.”

A global leader in real estate investing, Blackstone is the largest owner of commercial real estate globally, owning and operating assets across every major geography and sector, including logistics, residential, office, hospitality and retail.

The acquisition is expected to close in the third quarter of 2024, subject to approval by AIR Communities’ stockholders and other customary closing conditions.

Mr Considine concluded: “The AIR team is grateful to Blackstone for the opportunity and for its faith in what can be accomplished working together.”

News: Blackstone to take Apartment Income REIT private in $10bn deal

MedTech provider Agiliti goes private in $2.5n deal

BY Fraser Tennant

In a deal that takes the US MedTech provider private, Agiliti Inc. is to be acquired by its majority owner, private equity firm THL Partners, for approximately $2.5bn.  

Under the terms of the definitive agreement, THL will acquire all outstanding shares of Agiliti common stock not currently owned by THL and its affiliates and certain management shareholders for $10 per share in cash.

Upon completion of the transaction, Agiliti will become a private company and will no longer be publicly listed or traded on the New York Stock Exchange.

“Agiliti serves a critical role in sustaining our national healthcare infrastructure, and our dedicated team has led the way to our substantial growth and evolution over the last decade,” said Tom Leonard, chief executive of Agiliti. “We are pleased to expand our five-year partnership with THL in a transaction that provides immediate value and liquidity to our shareholders, while lifting certain overhangs that had limited our performance in the public market since the time of our initial public offering.”

An essential service provider to the US healthcare industry with solutions that help support a more efficient, safe and sustainable healthcare delivery system, Agiliti serves more than 10,000 national, regional and local acute care and alternate site providers across the US.

For more than eight decades, Agiliti has delivered medical equipment management and service solutions that help healthcare providers reduce costs, increase operating efficiencies and support optimal patient outcomes.

Acting upon the unanimous recommendation of a special committee of the Agiliti board of directors, the Agiliti board of directors approved the transaction. The transaction has also been approved by THL Agiliti LLC in its capacity as the majority shareholder of Agiliti and no other shareholder approval is required.

Serving as exclusive financial adviser to the special committee is Centerview Partners, with Weil, Gotshal & Manges acting as legal counsel. Goldman Sachs & Co. is providing exclusive financial advisory services to THL, with legal counsel from Ropes & Gray.

The transaction is expected to close in the first half of 2024, subject to customary closing conditions.

News: Healthcare tech Agiliti to be taken private in $2.5 bln deal

KKR to take Broadcom’s end-user computing division private in $4bn deal

BY Richard Summerfield

Private equity giant KKR has agreed to acquire chipmaker Broadcom’s end-user computing (EUC) unit in a deal worth around $4bn.

Upon completion of the deal, the EUC division will become a standalone company, with greater access to growth capital and a dedicated strategic focus on empowering customers and partners worldwide with innovative digital workspace solutions. The unit will continue to be run by its existing management team led by its existing senior vice president and general manager Shankar Iyer. KKR is making its investment primarily through its North America Fund XIII.

“We are confident that this pending transaction marks an exciting next chapter for the EUC Division and one that will create enormous opportunities and benefits for our customers, partners and employees,” said Mr Iyer. “The KKR team knows our industry well and is the ideal strategic partner to help us become a standalone company with an exclusive focus on delivering powerful tools for the digital workspace.”

Originally a division of VMware prior to Broadcom’s $61bn acquisition of the company in 2023, the EUC division provides a leading suite of digital workspace solutions that allow organisations to securely deliver and manage applications, desktops and data across any device or platform. Its flagship products include Horizon, a leading desktop and application virtualisation platform, and Workspace ONE, a marquee unified endpoint management platform. Broadcom announced its intention to divest its EUC unit in December 2023.

“Workspace ONE and Horizon are best-in-class platforms chosen by many of the world’s leading enterprises to create seamless and secure digital workspaces with interoperability across increasingly complicated technology stacks,” said Bradley Brown, managing director at KKR. “We see great potential to grow the EUC Division by empowering this talented team and investing in product innovation, delivering excellence for customers and building strategic partnerships.”

“EUC is a leader within large, high growth categories and demand for the business’s marquee offerings continues to grow as the workplace and the needs at the front-line evolve rapidly,” said John Park, a partner at KKR. “We are excited to deploy our experience and toolkit at KKR to back a world-class company in its next chapter as a standalone business, with accelerated investment and a continued focus on product and customer-centricity.”

Notably, KKR has announced its intention to implement an employee ownership programme, giving employees a chance to own equity in the new company alongside KKR. The deal is expected to close some time later this year, subject to standard regulatory approval.

News: Chipmaker Broadcom sells remote-access unit to KKR in $4 billion deal