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

• A look at the latest trends in healthcare dealmaking

• Plus, Stonepeak moves into private credit

Healthcare private equity update:

McDermott Will & Emery released the firm's latest healthcare private equity market report this week, providing a readout on the final sector-specific deal trends from 2023.

The firm’s data support the idea of a general trend toward more active deal structuring as buyers contend with choppy market conditions and work to bridge gaps in valuation expectations.

Rollover equity structures jumped in popularity and are now used in more than 65 percent of all deals, up from just 38 percent in 2020. Larger deals are more likely to include a rollover component — only half of deals with headline values under $50 million had rollover.

Though rollover incidence is growing, size has remained relatively steady. The average value of rollover as a percent of purchase price is now 28 percent, compared to 25 percent in the prior year.

Deals with deferred purchase prices or earnouts have also become more common. Around 23 percent of last year’s deals used earnouts, up from 17 percent in 2022 and just 12 percent through the market’s peak in 2021.

Earnout usage is up even within sub-verticals that have a stronger preference for upfront cash, like physician practice management. One-quarter of all PPM deals had earnouts last year, which is more than 2.5 times the number in 2021.

Despite the market turbulence, seller notes have fallen further out of favor. The percentage of transactions with seller notes is now just 5 percent, less than half that of 2020, following steady year-over-year declines.

Representation and warranty insurance adoption has ticked slightly higher, with 78 percent of deals greater than $50 million having RWI in 2023 vs. a 73 percent average from 2020 to 2022. Usage in deals less than $50 million continues to be relatively rare.

• Boeing (NYSE: BA) is exploring the sale of its Jeppesen navigation unit, which provides digital flight planning solutions and could fetch more than $6 billion, per Bloomberg.

• Carlyle Group is exploring options, including an IPO or sale, for Flender GmbH, a mechanical and electrical drivetrain manufacturer, in a deal that could value the business at up to €4 billion.

• Blackstone is in advanced talks to acquire a minority stake in New York-based middle market buyout firm American Industrial Partners.

• Aethon Energy Management has hired Goldman Sachs and Citigroup to advise on a potential sale or IPO of its natural gas production and midstream assets, which could be worth around $10 billion valuation, per Reuters.

• Stonepeak agreed to acquire private credit platform Boundary Street Capital.

• Wonder Group agreed to acquire Grubhub for $650 million from Just Eat Takeaway, which paid $7.3 billion for it in 2021.

• Triton Partners is considering a takeover bid for Evotec, a drug discovery platform, after increasing an existing stake to 9.99 percent.

• McKesson (NYSE: MCK) and Oracle (NYSE: ORCL) are among final bidders for EMR business Veradigm, per Axios.

• Partners Group is preparing to launch a sale process for International Schools Partnership, which could be valued at around €5 billion.

• DCC (LSE: DCC) is preparing to sell its DCC Healthcare division, which manufactures medical products and nutritional supplements. DCC is also exploring options for its technology distribution unit.

• Abu Dhabi Investment Authority agreed to acquire a $1 billion stake in Qlik, a Pennsylvania-based data analytics software provider, at a reported $10 billion valuation from Thoma Bravo.

• TPG acquired a minority stake in Demopolis Equity Partners, a lower middle market software private equity firm.

• Blackstone invested $300 million in Brigade Capital, a hedge fund focused on private credit and CLOs.

• HighPost Capital invested in Front Row Group, an e-commerce agency focused on beauty, health, wellness, and CPG brands.

• Vialto Partners, a tax solutions provider owned by CD&R, received $225 million in new equity from CD&R and HPS Investment Partners as part of a broader recapitalization.

• Decks & Docks, a portfolio company of CCMP Growth Advisors, acquired Bayou City Lumber, a Houston-based distributor of outdoor building products.

• ATIS, backed by Thompson Street Capital Partners, acquired Vermont Elevator Inspection Services.

• WSB, a GHK Capital Partners portfolio company, acquired Meshek & Associates, a Tulsa-based infrastructure engineering firm.

• Tria Federal, a portfolio company of Sagewind Capital, acquired Softrams, a digital services and system modernization provider for federal agencies.

• Morgan Street Holdings acquired Continental Services, a Detroit-based food service management company, from New Heritage Capital.

• Halifax Group acquired Universal Air Conditioner, a Mansfield, Texas-based distributor of aftermarket HVAC equipment for vehicles.

• Lone View Capital acquired a majority stake in logistics provider CargoSprint.

• Golden Gate Capital acquired a majority stake in Brava, a manufacturer of composite roofing tiles.

• Fortress Investment Group acquired Curzon, a UK arthouse cinema chain.

• Wynnchurch Capital acquired Principal Industries, a San Angelo, Texas-based manufacturer of signage LED components.

• Bridgepoint agreed to acquire Schuberg Philis, a Dutch IT services provider, for around €500 million.

• Coterra Energy agreed to acquire Franklin Mountain Energy and Avant Natural Resources’ Permian Basin assets for $3.95 billion.

• Cardinal Health agreed to acquire a 71 percent stake in GI Alliance, a gastroenterology practice network with 900+ physicians, for $2.8 billion from Apollo Global Management.

• Hilcorp Energy agreed to acquire ExxonMobil's (NYSE: XOM) oil drilling assets in the Permian Basin for around $1 billion, per Reuters.

• BioNTech (Nasdaq: BNTX) agreed to acquire Biotheus, a clinical-stage biotech developing antibodies for oncology and inflammatory diseases, for $800 million upfront plus up to $150 million in milestone payments.

• Pfizer (NYSE: PFE) has hired Goldman Sachs to lead a sale process for its Pfizer Hospital unit, which produces antibiotics and sterile injectable drugs for hospitals and clinics, per Reuters.

• First Reserve is planning to launch a 1H’25 sale process for convenience store operator Refuel, which could be worth more than $1.5 billion, per Reuters.

• Ammega Group, a Netherlands-based conveyor-belt maker owned by Partners Group, has selected UBS and Bank of America to lead a potential late-2025 IPO in Zurich, per Bloomberg.

• May River Capital acquired Cashco, a provider of pressure management solutions.

• Goldman Sachs Alternatives agreed to acquire residential HVAC business Sila Services from Morgan Stanley Capital Partners.

• Warburg Pincus invested $525 million in dental partnership organization MB2 Dental, owned by Charlesbank Capital Partners, at a $3.5 billion valuation.

• Golden Gate Capital invested in oneZero Financial Systems, a provider of multi-asset trading technology solutions backed by Lovell Minnick Partners.

• Go Capital and Station Partners invested in Arketi Group, a B2B technology marketing and public relations agency.

• Endeavor Group agreed to sell its OpenBet and IMG Arena sports betting units to OB Global Holdings, a management buyout vehicle led by Ari Emanuel and OpenBet CEO Jordan Levin, for around $450 million.

Tech, Vertical SaaS, & Misc. Enterprise

• Writer, an enterprise genAI platform, raised $200 million in Series C funding co-led by Premji Invest, Radical Ventures, and ICONIQ Growth, with participation from Salesforce Ventures, Adobe Ventures, B Capital, Citi Ventures, IBM Ventures, Workday Ventures, Accenture, Balderton Capital, Insight Partners, and Vanguard.

• Recogni, an AI inference chip startup, raised $102 million in Series C funding co-led by Celesta Capital and GreatPoint Ventures, with participation from Mayfield, DNS Capital, BMW i Ventures, SW Mobility Fund, Pledge Ventures, Tasaru Mobility Investments, and Juniper Networks.

• ScaleOps, a real-time automated cloud resource management platform, raised $58 million in Series B funding led by Lightspeed Venture Partners, with participation from NFX, Glilot Capital Partners, and Picture Capital.

• Conduktor, an enterprise data streaming platform, raised $30 million in Series B funding led by RTP Global, with participation from M12, Ansa, and Accel.

• Robin AI, a legal AI copilot, raised $25 million in Series B extension funding from PayPal Ventures, Willets, and Cambridge University.

• LocalStack, a developer platform for local AWS cloud environments, raised $25 million in Series A funding led by Notable Capital, with participation from CRV and Heavybit.

• PointFive, a cloud cost optimization platform, raised $20 million in Series A funding led by Salesforce Ventures, with participation from Index Ventures, Entree Capital, Sheva VC, and Vesey Ventures.

• UnifyApps, an enterprise AI integration platform, raised $20 million in Series A funding led by ICONIQ Growth, with participation from Elevation Capital.

Fintech

• Ualá, an Argentine neobank, raised $300 million in Series E funding led by Allianz X, with participation from Stone Ridge Holdings Group, Tencent, Pershing Square Foundation, Ribbit Capital, Goldman Sachs Asset Management, Soros Fund Management, SoftBank Latin America Fund, Jefferies, D1 Capital Partners, Claure Group, AlleyCorp, and Monashees.

• Lean Technologies, a Saudi fintech infrastructure platform, raised $67.5 million in Series B funding led by General Catalyst, with participation from Bain Capital Ventures and Arbor Ventures.

• Satispay, an Italian mobile payments network, raised €60 million in new funding from Addition, Greyhound Capital, and Lightrock.

• Neo Financial, a Canadian challenger bank, raised 360 million Canadian dollars in Series D funding from an undisclosed Chinese lead investor, with participation from Valar Ventures, Golden Ventures, Afore Capital, and Thomvest Ventures.

Consumer & Media

• Fleek, a secondhand clothing wholesale marketplace, raised $20.4 million in Series A and seed funding led by HV Capital, with participation from Andreessen Horowitz and Y Combinator.

• Bounce, a luggage storage network, raised $19 million in Series B funding led by Sapphire Sport, with participation from Andreessen Horowitz, General Catalyst, Thayer Ventures, FJ Labs, 20VC Growth, and Shilling.

• Neon, a direct-to-consumer gaming platform provider, raised $14 million in funding from Renegade Partners, Thrive Capital, a16z Speedrun, SciFi VC, and Ribbit Capital.

Healthcare

• Metsera, a developer of obesity and metabolic disease therapies, raised $215 million in Series B funding co-led by Wellington Management and Venrock Healthcare Capital Partners.

• Alentis Therapeutics, a clinical-stage biotech developing CLDN1-targeted therapies for tumors and organ fibrosis, raised $181.4 million in Series D funding co-led by OrbiMed, Novo Holdings, and Jeito Capital, with participation from Frazier Life Sciences and Longitude Capital, among others.

• Trace Neuroscience, a developer of genomic therapies for neurodegenerative diseases, raised $101 million in Series A funding led by Third Rock Ventures, with participation from Atlas Venture, RA Capital Management, and GV.

• Quantune Technologies, a developer of miniaturized laser spectrometers for non-invasive glucose monitoring, raised €8.5 million in seed funding led by Point72 Ventures and Vsquared Ventures, with participation from the European Innovation Council and Investment Bank of Berlin.

Industrials, Greentech, & Other

• Firefly Aerospace, a Texas-based space transportation startup, raised $175 million in Series D funding led by RPM Ventures, with participation from GiantLeap Capital, Human Element, and AE Industrial Partners.

• Chaos Industries, a defense tech developing detection and monitoring systems, raised $145 million in Series B funding led by Accel, with participation from 8VC, Overmatch Ventures, and Lerner Enterprises.

• Klim, a Berlin-based regenerative agriculture platform, raised $22 million in Series A funding led by BNP Paribas, with participation from Earthshot Ventures, Rabobank, AgFunder, Norinchukin Bank, Achmea Innovation Fund, Ananda Impact Ventures, and Elevator Ventures.

• Shiru, an AI-powered protein discovery platform, raised $16 million in Series B funding led by S2G Ventures, with participation from CPT Capital, Lux Capital, Nourish Ventures, and Meach Cove Capital.

• Vatn Systems, a developer of autonomous underwater defense vehicles, raised $13 million in seed funding led by DYNE Ventures, with participation from Lockheed Martin Ventures, RTX Ventures, In-Q-Tel, Propeller Ventures, SAIC Ventures, Cubit Capital, Fortitude Ventures, Centre Street Partners, The Veteran Fund, Blue Collective, and Decisive Point.

• Transom Capital Group raised $675 million for its fourth middle market fund.

• AshGrove Capital raised €650 million for its second specialty lending fund.

• Forerunner Ventures raised $500 million for its seventh early-stage fund.

• Altos Ventures raised $500 million for its latest fund.

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