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

Cyber attack methods continue to evolve – report

BY Richard Summerfield

Cyber criminals are deploying new and innovative lines of attack in addition to modified versions of existing methods, according to Verizon’s 2024 Data Breach Investigations Report.

According to the report, which analysed more than 30,000 real-world security incidents, including a record high of just over 10,000 confirmed data breaches, spanning 94 countries, the three most popular vectors for data breaches were unauthorised uses of web application credentials, email phishing and exploiting vulnerabilities in web applications, when excluding errors and misuse, typically honest mistakes by employees.

Attacks utilising the exploitation of vulnerabilities were up 180 percent, according to the report. This increase comes as no surprise given the mass exploitation of the MOVEit zero-day vulnerability and other similar vulnerabilities. Primarily, these attacks utilised ransomware and other extortion-related threat actors, and the main entry point was web applications. Attacks involving ransomware or extortion have seen considerable growth over the past year, accounting for 32 percent of all breaches.

“The exploitation of zero-day vulnerabilities by ransomware actors remains a persistent threat to safeguarding enterprises,” said Chris Novak, senior director of cybersecurity consulting at Verizon Business.

The human element also had a substantial hand in the number of recorded breaches. Sixty-eight percent of breaches involved a non-malicious human element. Accordingly, the onus remains on organisations to improve security awareness among their employees in order to reduce the impact of breaches. The report explains that the most common causes of breaches involving a non-malicious human element are someone falling victim to a social engineering attack or someone making a mistake.

“In either case, these could have been mitigated by basic security awareness and training. This is an updated metric in the report (we would previously include malicious insiders), and it is roughly the same as the previous period described in the 2023 DBIR,” Verizon added.

Report: 2024 Data Breach Investigations Report

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

CoStar acquires Matterport in $1.6bn transaction

BY Fraser Tennant

In a move that boosts its digital real estate services, real estate data provider CoStar Group is to acquire digital twin platform Matterport in a transaction valued at $1.6bn.

Under the terms of the definitive agreement, CoStar will acquire all outstanding shares of Matterport in a cash and stock transaction valued at $5.50 per share. Matterport stockholders will receive $2.75 in cash and $2.75 in shares of CoStar Group common stock for each share of Matterport common stock.

Utilised in nearly every sector of real estate, spanning residential, commercial, hospitality, retail and industrial spaces, among others, Matterport has curated what is considered the largest and most precise collection of spatial property data worldwide, with over 12 million spaces captured in 177 countries, representing more than 38 billion square feet of digital property under management.

“We are thrilled to join forces with CoStar Group, a long-standing customer and partner with a shared vision for transforming global real estate through technology and digitalisation,” said RJ Pittman, chair and chief executive of Matterport. “This transaction is another significant milestone that acknowledges the groundbreaking work Matterport has accomplished in 3D digital twin technology and artificial intelligence (AI)-driven property intelligence.”

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

“There is no better way to remotely experience space than via Matterport,” said Andy Florance, founder and chief executive of CoStar Group. “We intend to support and invest in research and development opportunities to further develop Matterport’s spatial technology, including the application of AI and machine learning to extract information from the 3D spatial data library as well as using generative AI to imagine and reimagine physical spaces.”

The transaction is expected to be completed during 2024, subject to the approval of Matterport stockholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.

“With CoStar’s expansive reach and scale in property research and analytics and our joint commitment to innovation, we believe that this powerful combination will transform how properties are marketed, sold and managed worldwide,” concluded Mr Pittman. “It offers Matterport's stockholders the opportunity to participate in the value creation and future growth prospects of our combined efforts.”

News: CoStar to buy Matterport in $1.6 bln deal to boost digital real estate services

Express Inc files for Chapter 11 bankruptcy protection

BY Richard Summerfield

Clothing retailer Express Inc has filed for Chapter 11 bankruptcy protection and announced its intention to close more than 100 retail locations across its portfolio of brands

According to the filing with the bankruptcy court in Delaware, Express has assets and liabilities in the range of $1bn to $10bn.

The company has a stable of brands including Express, Bonobos and UpWest Express. According to its website, Express operates around 530 Express retail and Express Factory Outlet stores in the US and Puerto Rico and around 12 UpWest retail stores, in addition to online operations for these brands.

In a statement announcing the filing, Express noted that it filed for bankruptcy to “facilitate” a sale process of most of its retail stores and operations to the investor group, which includes WHP, Simon Property Group and Brookfield Properties. The company received a nonbinding letter of intent from the investors to buy the assets and has also secured $35m in new financing from some of its existing lenders, subject to court approval. Express also secured $49m in cash from the IRS related to the CARES Act – a critical influx of liquidity that the company had been waiting on to shore up its balance sheet.

The company also named Mark Still as its new chief financial officer (CFO), effective immediately. Mr Still had served as interim CFO since November 2023.

“We continue to make meaningful progress refining our product assortments, driving demand, connecting with customers and strengthening our operations,” said Stewart Glendinning, chief executive of Express. “We are taking an important step that will strengthen our financial position and enable Express to continue advancing our business initiatives. WHP has been a strong partner to the Company since 2023, and the proposed transaction will provide us additional financial resources, better position the business for profitable growth and maximize value for our stakeholders.

“Express has a strong portfolio of brands and a premier omnichannel platform,” he continued. “Our top priority remains providing our customers with the contemporary styles and value they expect from us. We thank our associates for their continued hard work and commitment, and we appreciate the ongoing support of our vendors, suppliers and business partners.”

Express, which was founded in 1980 by Les Wexner’s Limited Brands, has endured a difficult few years. Its sales have plummeted while debt and costly leases dragged down its business.

News: Apparel retailer Express files for US bankruptcy protection, to close over 100 stores