Packable strikes $1.55bn SPAC deal

BY Richard Summerfield

Ecommerce marketplace enablement platform Packable has entered into a definitive agreement to merge with Highland Transcend Partners Corp, a special purpose acquisition company (SPAC), in a deal worth $1.55bn.

Packable, which is backed by private equity firm The Carlyle Group, was valued at around $1.1bn in November 2020 when Carlyle invested $250m to acquire its stake in the company.

Under the terms of the deal, Packable’s existing shareholders will receive 71 percent of the combined company, Highland Transcend SPAC founders and investors will own 19 percent, while private investment in public equity (PIPE) investors, including Fidelity Management & Research Company, Lugard Road Capital, Luxor Capital, Park West Asset Management and Morningside, will receive the remaining 11 percent.

“This is an incredibly exciting time for our team, and we are thrilled to partner with Highland Transcend as we plan to enter our next chapter as a public company,” said Packable co-founder and chief executive Andrew Vagenas. “While we’ve become a market leader in our industry, there is significant runway ahead of us in multiple avenues: from the continued proliferation of online marketplaces and geographic opportunities to our ability to invest in and grow Digitally Native Brands, while providing new data and technology services, as well as marketing options for our brand partners.”

“While we believe that third-party marketplaces will contribute more than 40 percent of all ecommerce revenues by 2025, brands find themselves challenged to manage the complexity of executing across these platforms,” said Ian Friedman, chief executive of Highland Transcend. “Packable has a leading software-driven offering enabling brands to grow their businesses across multiple online marketplaces. Andrew and the entire team have built an incredibly strong competitive platform; with approximately 75 million customer transactions to-date, we believe that Packable has one of the largest sets of third-party marketplace transaction data, outside of the marketplaces themselves. This data enables Packable’s competitive pricing, merchandising, and marketing decisions and will allow the company to launch a Software-as-a-Service offerings in the future.”

News: Carlyle-backed Packable agrees $1.55 billion SPAC merger

Cornerstone taken private in $5.2bn deal

BY Richard Summerfield

Private equity firm Clearlake Capital is to take cloud computing and management software provider Cornerstone OnDemand private in a deal worth $5.2bn.

Under the terms of the deal, Cornerstone shareholders will receive $57.50 per share in cash, a 15 percent premium over the stock’s closing price on the day before the deal was announced last week.  The transaction is expected to close in the second half of 2021, subject to customary closing conditions, including the receipt of regulatory approvals and approval by a majority of Cornerstone stockholders. Certain stockholders, including Clearlake, representing 15.65 percent of the company’s outstanding shares, have agreed to vote their shares in favour of the transaction.

“Clearlake’s investment reflects their confidence in our talented people, the power of our SaaS solutions and our value proposition for our customers,” said Phil Saunders, chief executive of Cornerstone. “With this transaction, we plan to continue to pursue new software capabilities that advance our customers’ efforts to optimize workforce agility, transform skill development, deliver personalized, engaging growth experiences, and align their organizations around a shared definition of success. We’re thrilled to welcome Clearlake as a partner that appreciates the impact our SaaS solutions have on the lives of people at work and our customer-centric philosophy as we accelerate our innovation.”

“We have long admired Cornerstone’s leading talent management SaaS solutions and the Company’s mission to help customers modernize the learning and development experience for their employees,” said Behdad Eghbali, co-founder and managing partner at Clearlake. “We believe there is a significant opportunity to strategically position Cornerstone in the market as a buy-and-build platform and industry consolidator, and we look forward to partnering with the management team to drive value through both organic growth acceleration and inorganic transformation.”

Cornerstone also reported its second-quarter earnings last week, recording $214.3m in revenue, with 97 percent coming from subscriptions, and representing a 16.3 percent year-over-year increase. The company has more than 6000 customers and 75 million users, and its software is available in 180 countries and 50 languages. Cornerstone went public in 2011.

News: Clearlake Capital to take Cornerstone OnDemand private for $3.8 billion

Advent sells Allnex for $4.75bn

BY Richard Summerfield

US private equity firm Advent International has agreed to sell German coating resins manufacturer Allnex to PTT Global Chemical for $4.75bn. The deal is expected to close in Q4 2021, subject to regulatory approvals.

Allnex has around 4000 employees worldwide and manages a global production network of 33 state-of-the-art manufacturing sites and 23 research and technology facilities. The company has been pioneering sustainable innovations for the coatings industry for over 70 years and focuses on environmentally friendly technologies, such as waterborne industrial resins, powder resins, energy curable resins and high-solids technologies. The company has annual revenue of around €2bn.

Advent acquired Cytec Industries’ coating resins business in 2013, rebranded it Allnex and merged it with Nuplex in 2016.

“We are proud of the success we have had in building allnex into a global player and are very grateful to Advent for its strong support and excellent partnership over the past years,” said Miguel Mantas, chief executive of Allnex. “In order to build on our leading market position, we will continue to invest in innovative technologies and look to expand our presence in APAC. With its resources, industrial network and expertise, PTT Global Chemical will represent an extraordinary opportunity to take the next steps in the development of our business.”

“Over the past eight years, we have supported allnex’s management team in transforming the company from a corporate carve-out into the number one global producer of industrial coating resins,” said Ronald Ayles, managing partner and head of the global chemicals and materials practice at Advent. “Our significant investment in growth lead to an impressive track record – especially in green technologies. With PTTGC, we have now found the ideal partner to support allnex’s next phase of growth and to continue its success story.”

“In line with our vision to become a leading global chemical company while improving people’s quality of life, as well as our core strategies to drive new sustainable growth opportunities, we are pleased to announce PTTGC International (Netherlands) B.V., a PTTGC wholly owned subsidiary, invests in allnex, a business with outstanding innovation, history and promise, to establish a stronger position internationally,” said Dr Kongkrapan Intarajang, chief executive of PTTGC.

New: Advent sells coating resins maker Allnex to Thailand's PTTGC

KPS Capital exits DexKo in $3.4bn deal

BY Richard Summerfield

Brookfield Business Partners has agreed to acquire DexKo Global Inc, a maker of recreational vehicle components, from private equity firm KPS Capital Partners LP in a $3.4bn deal.

Brookfield Business Partners, a subsidiary of Brookfield Asset Management, said the deal would be funded with about $1.1bn of equity, of which Brookfield intends to invest approximately $400m. The balance of the equity investment will be funded by institutional partners. The transaction is expected to close by the end of the year.

Michigan-based DexKo manufactures highly engineered components for recreational vehicles, trailers and towable equipment providers. The company employs more than 6000 people across 50 production facilities.

“We are pleased to grow our industrials operations with the acquisition of DexKo, a market leader known for quality and reliability,” said Mark Weinberg, managing partner of Brookfield Business Partners. “DexKo’s world-class management team has delivered consistently strong performance and we are excited to partner with them to further build on an established track record of value creation.”

“DexKo exemplifies the KPS investment strategy of seeing value where others do not, buying right and making businesses better, across decades, economic and business cycles, geographies and industries,” said Raquel Palmer, co-managing partner of KPS. “We are proud of DexKo’s extraordinary transformation under our ownership. DexKo demonstrates our ability to partner with world-class management teams to build industry-leading manufacturing companies on a global basis.”

“Our partnership with KPS has been extraordinary,” said Fred Bentley, chief executive of DexKo. “KPS recognized DexKo’s strength and potential from the start and invested to support DexKo’s growth ambitions. DexKo has become a better business as a result of KPS’ investments in our operations and people.

“DexKo is well positioned for future growth which we look forward to pursuing in partnership with Brookfield,” he added.

The deal is the latest addition to Brookfield’s portfolio of industrials, infrastructure and business services. The company says it has $600bn in assets under management with $22bn invested in the industrials sector alone.

Financing for the deal will be led by a syndicate of banks including Credit Suisse, Deutsche Bank, BMO Capital Markets, Bank of America, Goldman Sachs and RBC Capital Markets. Davis Polk & Wardwell LLP is acting as legal adviser to Brookfield.

News: Brookfield to buy recreational vehicle parts maker DexKo Global for $3.4 billion

CEE region records strong year for VC investment and PE exits

BY Fraser Tennant

Fuelling the coronavirus (COVID-19) recovery and underpinning the region’s long-term economic and social development, 2020 saw private equity (PE) invest heavily in Central and Eastern Europe (CEE), reveals a new report by Invest Europe.

In its ‘2020 Central and Eastern Europe Private Equity Statistics’, Invest Europe reports that PE firms invested in 566 companies last year – an increase of 15 percent on 2019 – with venture capital (VC) the driving force. Drilling down, PE firms backed 474 start-ups and scale-ups with total investment of €358m.

In terms of key jurisdictions, Poland was the leading destination, with a quarter of the region’s total investment value – €431m – and home to almost a fifth of the companies receiving funding. By investment value, it was followed by Estonia with 21 percent of the CEE total.

Additionally, the report notes that Hungary was the leading destination for investment by deal number, with 236 companies receiving €226m in funding, 220 of which were VC. Poland reported a total of 105 new investments, of which 82 were venture deals.

“PE is supporting more companies than ever across CEE,” said Bill Watson, chair of the Central and Eastern Europe taskforce at Invest Europe. “These are fast-growing businesses that can help drive the region’s recovery from the effects of the pandemic, as well as its long-term economic and social development.”

Across the CEE and all investments, information and communication technology was the leading sector, accounting for almost half of companies backed, while consumer goods and services ranked second.

“PE-backed companies in CEE are developing into local, regional and global champions,” said Eric de Montgolfier, chief executive of Invest Europe. “They are highlighting not only the talent, skills and entrepreneurship inherent in the region, but also the vast opportunity still to come as experienced managers work with businesses to take them to the next level.”

However, PE fundraising for investment in CEE did fall in 2020, dropping to €1bn, as fundraising cycles meant that the region’s large fund managers were not in the market raising new funds. In contrast, the VC sector raised €667m last year, the second-highest total on record, positioning the sector for a sustained high level of investment activity in the coming years.

Mr Watson concluded: “CEE is on a path that converges with the rest of Europe and PE can play an essential role in enabling companies in the region to achieve their full potential.”

Report: 2020 Central and Eastern Europe Private Equity Statistics