Happy Monday. Here’s what we’ve got today…

• A look at Apollo’s growing investment-grade business

• Plus, Apax considers a pair of software take-privates

More than a buyout shop:

Apollo Global Management is working to expand its credit business with a deeper push into investment-grade debt offerings for large corporates.

The high-grade debt market, historically served by large commercial and investment banks, is one of the few remaining untapped markets for private credit, which has focused primarily on increasingly competitive direct lending to middle market borrowers.

The firm can go where other sponsors haven't in part because of its relationship with retirement annuities business Athene, an Apollo-owned entity that gives the firm access to a ready source of long-duration capital.

Apollo believes it can originate more than $200 billion in corporate loans annually by 2026 through the new "high-grade capital solutions" strategy. The opportunity, says CEO Mark Rowan, is about servicing a “voracious need for capital, most of which we believe to be investment grade.”

Investment-grade debt can seem at odds with a firm whose reputation is built on flashier buyouts and ‘hybrid value’ deals. But, Apollo is coming to market with a more differentiated offering than traditional banks, focusing on bespoke structured financing solutions that can combine elements of traditional bank loans, bonds, and private credit.

Without the regulatory capital requirements of banks, the firm can operate with relatively few constraints. For borrowers, its willingness to engage on unique opportunities and its ability to quickly deploy capital at scale makes it an attractive partner — as do terms that are comparable or even superior to those on offer from banks.

As it competes to take share, Apollo has adopted a playbook that borrows heavily from the banks it’s trying to displace. The Financial Times cites sources at the firm who describe an internal operation that looks remarkably similar to the type of sell-side business development efforts you'd find at a J.P. Morgan or Bank of America: aggressively courting corporate C-Suites to build relationships and pitch them on various Apollo-led financings.

Typical pricing on such deals can be around 1 to 2 percentage points higher than that of more conventional loans or bonds. An attractive opportunity for Apollo’s Athene annuities business, which benefits from swapping out lower-yielding traditional debt instruments with more lucrative Apollo-originated credit.

It’s not just Athene. Apollo has built a business out of originating similar loans for outside insurance clients as well (and other asset managers), to whom it can charge management fees and transaction fees. The business is growing double-digits year-over-year, and its contribution is now north of $3 billion.

To date, the limiting factor hasn't been a lack of capital to deploy but rather an ability to source enough deployment opportunities to meet insurance demand.

• Temasek Holdings is nearing a deal to acquire a 20 percent stake in VFS Global, a Blackstone-owned visa outsourcing and technology services firm, at a potential valuation of $7 billion, per Bloomberg.

• Eni SpA is in talks with several sponsors, including Apollo, HitecVision, and Trilantic Europe, to sell a minority stake in Plenitude, its renewable and retail business, at a valuation above €10 billion, per Reuters.

• Bain Capital is considering the sale of British auto and home insurer Esure, which could be valued at more than £1 billion, per Reuters.

• Apax Partners is in advanced talks to acquire SoftwareOne, a Swiss reseller of software licenses, and is considering a potential combination with Crayon Group, a smaller Norwegian competitor.

• Rexel SA, a French distributor of electrical, heating, and plumbing products, rejected an unsolicited takeover offer from QXO valued at around $9.4 billion.

• KPMG is considering the sale of its French SME advisory unit, which could be valued at €500 million, with a potential divestment in 2024.

• MidOcean Energy, backed by EIG, agreed to acquire an additional 15 percent stake in Peru LNG, South America's only LNG export facility, from Hunt Oil Company, increasing its total stake to 35 percent.

• Peak Resources, a Yorktown Partners-backed oil and gas producer in Wyoming's Powder River Basin, filed for an IPO.

• LawnPRO Partners, a portfolio company of HCI Equity Partners, acquired Highest Quality, a lawn care services provider.

• SmartSights, backed by Capstreet, acquired Sage Clarity, a Chicago-based provider of real-time visibility software for manufacturing facility operations.

• Traffic & Mobility Consultants, backed by Grovecourt Capital Partners, acquired Propel Engineering, a West Palm Beach-based civil engineering firm.

Tech, Vertical SaaS, & Misc. Enterprise

• SafetyCulture, an Australian workplace operations platform, raised AU$165 million in new funding led by Airtree Ventures, with participation from Blackbird, Morpheus Ventures, Hostplus, and HESTA.

• Second Front Systems, a national security software accreditation startup, raised $70 million in Series C funding led by Salesforce Ventures, with participation from Battery Ventures, NEA, Moore Strategic Ventures, and Artis Ventures.

• TeamBridge, a workforce management system for hourly workers, raised $28 million in Series B funding led by Mayfield, with participation from General Catalyst and Abstract Ventures.

• 11x, a developer of autonomous digital workers for go-to-market teams, raised $24 million in Series A funding led by Benchmark, with participation from Quiet Capital, SV Angel, Abstract Ventures, Lux Capital, Operator Partners, Visionaries, Activant, HubSpot Ventures, Project A, and 20VC.

• AceUp, an AI-powered team transformation platform, raised $22.5 million in Series A funding led by PJC, with participation from Techstars Ventures, Gaingels Ventures, Water Bear Ventures, and Launchpad Venture Group.

• Patchstack, an Estonian open-source software cybersecurity startup, raised $5 million in Series A funding led by Karma Ventures, with participation from G+D Ventures and Emilia Capital.

Fintech

• Akur8, an insurance pricing and reserving platform, raised $120 million in Series C funding led by One Peak, with participation from Partners Group and Guidewire Software.

Consumer & Media

• Howbout, a social calendar app, raised $8 million in Series A funding led by Goodwater Capital, with participation from FJ Labs, Sequel, and Boost Capital.

Healthcare

• PathPresenter, a pathology image-sharing platform, raised $7.5 million in Series A funding led by AVANT BIO, with participation from Barco NV and Modi Ventures.

• Silver Point Capital raised $4.6 billion for its latest opportunistic credit fund.

• Kohlberg & Company raised $4.3 billion for its tenth middle market buyout fund, plus an additional $1 billion for dedicated co-investment vehicles.

• Noteus raised €600 million for its debut European venture fund.

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