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

• A look at the tough regulatory environment for healthcare private equity

• Plus, Magnetar launches a new early-stage AI fund

States’ healthcare crackdown:

Healthcare private equity remains firmly in the regulatory hot seat as legislators look for ways to fight rising costs and, in some cases, worsened outcomes. High-profile failures of private equity-involved health systems haven't helped (e.g. Steward Health), and it could be argued that the political popularity of sponsor scrutiny is at an all-time high.

A growing group of U.S. states are now rolling out their own restrictions on dealmaking that are harsher than those at the national level, even as the FTC ramps up enforcement efforts of its own. One of the more common approaches by states has been healthcare-specific "mini-HSR Acts," allowing officials to challenge deals that they see as a risk to quality, access, and cost of care, even if those deals fall below federal antitrust thresholds.

Only one state—Indiana—calls out private equity by name in its guidelines, which came into effect July 1st, though a number of states' mini-HSR Acts include language that appears to specifically target sponsor involvement in healthcare. Washington, for example, now defines a 'hospital system' as an entity that includes the parent company (private equity ownership) as well as any affiliated entities of the parent — including any of the sponsors' other portfolio companies with no relation to the deal in question.

Some states that already have mini-HSR Acts are now considering additional legislation to increase the burden of private equity disclosure requirements in proposed healthcare transactions. California, Connecticut, Massachusetts, Minnesota, and Oregon each have active bills in their state's house or senate.

California's new measure would require a "private equity group" to provide written notice to the California attorney general at least 90 days before closing on any transactions involving healthcare facilities or provider groups. If the attorney general feels further review (including additional public input) is warranted, the waiting period can be extended an additional 59 days and, in certain cases, can further extend past the eight-month mark. After the waiting period, the attorney general will issue a determination to approve or kill the deal.

Massachusetts is also considering a waiting period and new cost-benefit analyses for high-risk deals to be conducted by the state's Health Policy Commission. The review itself could take up to 205 days, and one possible outcome of a negative finding is a five-year post-close reporting requirement in which the acquirer must submit ongoing data related to the deal's market impact.

The various proposals would each introduce substantial uncertainty into any new deals, but some states have opted for the simple approach: Minnesota's proposal is a blanket ban that would prohibit any private equity firm from acquiring any direct or indirect ownership stake or operational or financial control of a healthcare entity within the state.

Oregon is similarly contemplating an outright ban on certain transactions. Its bill, which has already passed in the House, would essentially outlaw the practice management structure that's commonly used by private equity in physician practice investments.

Other states with existing or pending healthcare transaction review laws include Colorado, Connecticut, Nevada, New York, and Rhode Island.

The definition of healthcare varies by state, but many proposals have taken a broad view that includes not only provider groups, but also payors, HMOs, pharmacy benefit managers, and third-party administrators. Life sciences, medical devices, and HCIT are generally excluded, though, other than HCIT, that doesn't help buyout firms with limited appetite for clinical trial risk.

Apart from the greater antitrust risk on any given deal, the current regulatory trend may jeopardize entire strategies: increased deal-by-deal transaction friction and lower reporting thresholds mean that even roll-ups of small add-ons could become more trouble than they’re worth, at least in certain states.

For the deals still being done, things may look a little different going forward. Knowledgeable local counsel and earlier regulatory engagement with state officials could become more important, and certain deal structures, like minority investments or joint ventures, might be a way to avoid issues in some jurisdictions. It may also be worth the time to model out the possible impact of ongoing compliance and reporting expenses or state-mandated post-closing commitments that restrict changes to staffing levels or facility closures.

• Edgar Bronfman Jr. backed out of his last-minute bid for Paramount parent company National Amusements, clearing the way for Skydance Media’s pre-existing agreement with Paramount.

• TA Associates and Montagu Private Equity acquired Harvest, a French wealth management software provider, from Five Arrows.

• CVC Capital Partners is in talks to acquire a significant minority stake in Odevo, a residential property management company, at a valuation of more than $3 billion.

• Summit Partners and Vista Equity Partners are considering exit options for Trintech, a provider of finance and account reconciliation software, and have hired Deutsche Bank to lead a sale process that could be worth around $2 billion, Reuters.

• Citation Capital acquired a majority stake in Aptive Environmental, a residential pest control company.

• Argonaut Private Equity acquired Hammer & Steel Global, a distributor of deep foundation drilling and pile driving equipment.

• Boyne Capital acquired Premier Building Associates, a Connecticut-based commercial roofing contractor.

• One Equity Partners agreed to acquire EthosEnergy, a provider of aftermarket maintenance services for rotating equipment in the power generation and industrial markets.

• Capgemini agreed to acquire Syniti, a provider of enterprise data management software and services, from Bridge Growth Partners.

• euNetworks Group, a Western European bandwidth infrastructure company, closed a €2.1 billion equity recapitalization led by a Stonepeak-managed vehicle, with investments from APG Asset Management and Investment Management Corporation of Ontario.

• Alleguard, a Wynnchurch Capital portfolio company, acquired Harbor Foam, a Michigan-based manufacturer of expanded polystyrene.

• Sikich, backed by Bain Capital, agreed to acquire Saggar & Rosenberg, a Rockville, Maryland-based CPA firm serving government contractors and federal agencies.

• M2S Group, a Wynnchurch Capital portfolio company, acquired Iconex's label solutions business.

• PrecisionX Group, a portfolio company of CORE Industrial Partners, acquired MSK Precision Products, a Florida-based provider of precision machining and assembly services.

• StandardAero, a Carlyle portfolio company, acquired Aero Turbine, a provider of MRO services for military engines and accessories, from Gallant Capital Partners.

• O2 Investment Partners acquired Harley Exteriors, a Seattle-based residential renovation provider.

• GrubMarket acquired FreshToGo, an online Asian grocery and specialty food e-commerce platform.

• GHK Capital Partners acquired Horizon Group, a provider of international freight forwarding for time-critical marine parts, from ICV Partners.

• Mill Point Capital invested in Garyline, a manufacturer and supplier of promotional and specialty packaging products.

Tech, Vertical SaaS, & Misc. Enterprise

• Cribl, an enterprise data infrastructure startup, raised $319 million in Series E funding led by GV.

• OpusClip, an AI tool to repurpose long-form video content into viral short clips, raised $30 million in Series B funding led by Millennium New Horizons.

• nOps, an AWS cost optimization platform, raised $30 million in Series A funding led by Headlight Partners.

• Supio, an AI platform for personal injury and mass tort plaintiff law firms, raised $25 million in Series A funding led by Sapphire Ventures, with participation from Bonfire Ventures and Foothill Ventures.

• Viggle AI, a Toronto-based AI character animation startup, raised $19 million in Series A funding led by Andreessen Horowitz, with participation from Two Small Fish Ventures.

• Planera, a scheduling and planning software for commercial construction projects, raised $13.5 million in Series A funding led by Sierra Ventures, with participation from Sorenson Capital, Brick and Mortar Ventures, Prudence VC, and Firebolt Ventures.

• pgEdge, a distributed PostgreSQL database optimized for the network edge, raised $10 million in new funding led by Rally Ventures, with participation from Sands Capital Ventures and Grotech Ventures.

• Jobilla, a Helsinki-based AI-powered digital recruitment platform, raised €6 million in new funding from Juuri Partners, Trind VC, and Business Finland.

Fintech

• Comun, a neobank for immigrants in the US, raised $21.5 million in Series A funding led by Redpoint Ventures, with participation from ANIMO Ventures, Costanoa Ventures, FJ Labs, RTP Global, and South Park Commons.

• Solayer Labs, developer of a Solana restaking protocol, raised $12 million in seed funding led by Polychain Capital, with participation from Big Brain Holdings, Hack VC, Nomad Capital, Race Capital, ABCDE, and Maelstrom.

Consumer & Media

• Gameplay Galaxy, the Web3 game developer behind the Trial Xtreme franchise, raised $11 million in seed extension funding co-led by Blockchain Capital and Merit Circle.

• myco, a UAE-based Web3 streaming platform, raised $10 million in Series A funding from Daman Investments, Aptos Labs, B Digital, Mocha Ventures, Art3 Foundation, Ghaf Capital Partners, Mix Media Network, Factor6 Capital Partners, and Enjinstarter.

• Aerflo, a developer of portable carbonation devices for sparkling water, raised $10 million in seed funding led by Lerer Hippeau and Torch Capital, with participation from Closed Loop Ventures Group, Good Friends, SWAT Equity Partners, WISE Ventures, Bluestein Ventures, RiverPark Ventures, and Palm Tree Crew.

• New School Foods, a plant-based seafood producer, raised $6 million in seed extension funding from Inter IKEA Group, Good Startup, NewTree Capital, and Hatch.

Healthcare

• Navigator Medicines, a biotech developing biologics for targeted immune regulation, raised $100 million in Series A funding co-led by RA Capital Management and Forbion.

Industrials, Greentech, & Other

• HabiTerre, a startup developing environmental systems models for agricultural production, raised $10 million in Series A funding led by John Deere.

• MMI, a Polish manufacturer of small and medium-sized buses, raised €7.7 million in funding from Vinci SA.

• LS Power Group raised $2.7 billion for its fifth energy infrastructure fund, exceeding a $2.5 billion target.

• Magnetar Capital raised $235 million for its Magnetar AI Ventures Fund, focusing on early-to-growth stage generative AI startups across models, infrastructure, and applications.

• Redalpine, a Swiss venture capital firm, raised $200 million for its seventh fund focused on European AI, biotech, and energy startups.

Interested in partnering with Transacted? If you’re a financial services firm looking to connect with an engaged audience, please reach out.

Got a tip or an idea for a story? Email [email protected], or Tweet/DM @transactedInc