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

• A look at debt financing for sponsors circling Sanofi’s consumer business

• The deal sheet, plus the 2024 IPO guide

Programming note: we’ll be on vacation for the next week. Expect your next issue of Transacted on March 27th.

Private equity suitors of Sanofi’s consumer health carveout are lining up debt financing packages that are likely to be among the largest-ever. Early talks are targeting nearly $8.2 billion of financing, per Bloomberg—just short of the $9 billion raised by Stone Point and Clayton Dubilier & Rice for their acquisition of Truist’s insurance unit earlier this year.

Advent International, Blackstone, Bain Capital, CVC Capital Partners, EQT, KKR, and Clayton Dubilier & Rice are all among potential bidders interested in the Sanofi asset, which is expected to fetch around $20 billion.

The potential deal may also signal a shift in preference back toward bank-led financings, at the expense of rival private credit offerings.

Last year, banks retreated from new deals as credit markets cooled. With a lack of willing purchasers for syndicated loans, banks found themselves saddled with financings they couldn’t get off their books.

Now, with a more active market and the general expectation that rates have peaked, banks are more confident they can successfully syndicate deals. Private equity investors will look forward to more robust lender processes. While direct lenders can provide greater flexibility, they often fall short on pricing when compared to cheaper bank-led syndications.

Consumer Exits

Late last year, Sanofi guided that the most likely outcome of its planned consumer divestiture would be through a separate public listing. Those plans are still progressing, with an offering expected late this year. The French drugmaker has, however, expressed openness to an outright sale if it finds an acquirer that will hit its desired valuation.

Sanofi’s consumer unit posted 2023 revenue of $5.6 billion, with flagship brands including Allegra, IcyHot and Aspercreme. The decision to offload the business mirrors similar moves made in recent years by Johnson & Johnson (spinning out Kenvue) and GSK (Haleon). Of the large pharmaceutical companies, only Bayer still maintains its consumer division.

The collective decision to move away from lower-margin consumer products is driven by shareholder pressure to focus solely on novel drug discovery and development—targeting blockbuster therapeutics that can move the needle for investors.

While consumer health businesses provide relatively stable performance and a source of cash, they also require a differentiated set of skills more focused on brand marketing, distribution, and manufacturing, not advanced drug discovery research.

A potential distraction for pharma, but an attractive target for private equity.

• HashiCorp, a $5.3 billion market cap provider of multi-cloud infrastructure automation software, is exploring a potential sale, per Bloomberg.

• Advent International is in advanced talks to acquire Nuvei, a payment technology company trading at a market value north of $3 billion.

• Carlyle Group is in advanced talks to acquire a majority stake in Thyssenkrupp's Marine Systems business at a €1.5 billion valuation.

• BNP Paribas is considering the acquisition of a 10 percent stake in Ageas, a Belgian insurance company, at a valuation of around €750 million, per Bloomberg.

• Battery Ventures has agreed to acquire TrueContext, a forms and intelligent workflows provider, for C$150 million.

• Oaktree Capital Management agreed to acquire LPW Group, a manufacturer of valves, fittings, flanges, and flow control products, from Wynnchurch Capital.

• Saudi Arabia's Public Investment Fund (PIF) is in early talks to acquire Saudia Airlines, the country's flagship carrier.

• New Mountain Capital agreed to acquire a majority stake in Grant Thornton's U.S. business.

• Great Hill Partners is in the process of acquiring a majority stake in a new U.K.-based employee benefits firm formed through the merger of Vivup and Perkbox.

• Kinderhook Industries has acquired Kaizen Auto Care, a provider of automotive collision repair services.

• NewSpring Capital invested in Shake Smart, a provider of healthy fast-casual food options.

• PAI Partners has agreed to acquire a majority stake in Beautynova, a cosmetics retailer.

• FotoFinder, a portfolio company of EMZ Partners, acquired DermLite, a provider of handheld dermatoscopes, from DW Healthcare Partners.

• ProAmpac, a portfolio company of Pritzker Private Capital, Constitution Capital Partners, A&M Capital, and GIC, has agreed to acquire Gelpac, a Canadian flexible packaging manufacturer, from Namakor Holdings and W Investments.

• Contineum Therapeutics, a biotech leveraging precision small molecules to target neuroscience, inflammation, and immunology indications, filed for a $150 million Nasdaq IPO.

Tech, Vertical SaaS, & Misc. Enterprise

• Lily AI, a Mountain View-based AI platform specializing in retail tech, raised $20 million in Series B-1 funding led by Conductive Ventures, with participation from Counterpart Ventures, Cendana Capital, Transform Capital, Canaan, Sorenson Capital, and NEA.

• Vawlt, a developer of distributed long-term supercloud storage solutions, raised €2.15 million from new investors Lince Capital, Basinghall, and Beta Capital, with participation from existing backers Armilar Venture Partners and Shilling VC.

Media & Consumer

• MetaCene, a Singapore-based game development studio, raised $10 million of Series A funding from Folius Ventures, SevenX Ventures, and The Spartan Group, among others.

Industrials, Greentech, & Other

• Mission Zero Technologies, a developer of direct air capture (DAC) technology, raised $25.4 million in Series A funding led by 2150, with participation from World Fund, Fortescue, Siemens Financial Services, and Bill Gates' Breakthrough Energy Ventures.

• Pure Lithium, a lithium metal battery technology company, raised $15 million in new funding from Oxy Low Carbon Ventures.

• Poseidona, a developer of sustainable food technologies specializing in algae-derived proteins, raised a €1.1 million ($1.19m) pre-seed round led by Faber, with participation from Dozen Investments, Sprout & About, ProVeg International, and WA4STEAM.

• Tandem Partners is raising $40 million for its debut fund focused on pre-seed to seed-stage investments.

1. The latest public offerings handbook.

• Latham releases the 2024 edition of its Global IPO Guide. — Latham & Watkins

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