You’re reading Value Add’s weekly briefing, the leading newsletter for the operating side of private equity. Here’s what you need to know this week, from insights for PE-backed executives and portco news to recent buyouts and investment trends. 

Spotlight

Advent International is advancing towards an acquisition of Nuvei, a Canadian-based fintech company that offers payment processing solutions. Nuvei went public in September 2020, raising $700 million — the largest tech IPO in the history of the Toronto Stock Exchange. The deal size is still uncertain, but Nuvei is actively engaged in discussions about going private with major shareholders and outside advisors. The company’s TSX-listed stock jumped +32% on news of the announcement, closing March 18th on a $4 billion market cap. 

The adoption of digital payments — accelerated by online shopping and the 2020 pandemic — has been a boon for processors like Nuvei. The company’s transaction volume increased +53% YoY in Q4 2023, which resulted in strong earnings — revenue was up +46% to $322 million for the quarter, and adjusted EBITDA grew +40% to $120 million. Despite the growth, Nuvei's shares are currently trading -82% lower than their highs of 2021 as the company has been recovering from a correction in tech markets as well as a short-seller report released by Spruce Point Capital Management in April 2023. 

Some consider Nuvei to be a classic target for Advent International, a firm that has, in the past, focused on the technology and financial services sectors. If a deal does come to fruition, Advent may have to help Nuvei integrate recent acquisitions such as its $1.3 billion acquisition of Paya Holdings in 2023.

Software companies have been a major target for PE firms over the past year, and Nuvei-Paya could be seen as a tempting two-for-one deal.

Buyout News

Another Canadian payments company, Lightspeed Commerce, has said that it would also be open to being taken private. “I still believe that the [public] stock market is a good place for Lightspeed, but when you look at what’s happening, you wonder if going private would be a better option,” CEO Dax Dasilva stated. The company is currently trading at a $2.1 billion market cap.

Several PE firms, including Advent International, Blackstone, Bain Capital, CVC Capital Partners, and KKR have been approaching both banks and private lenders in order to secure debt financing packages of as much as $8.2 billion with the intent to take over Paris-based pharmaceutical company Sanofi’s consumer healthcare division. The deal could be valued at around $20 billion, which would be the largest buyout this year. The fact that banks are competing to lend in the deal is significant as they have largely sat on the sidelines the past two years, and it’s a sign that they are looking to re-enter the LBO market as interest rates stabilize. 

Apollo Global Management has offered $11 billion to acquire Paramount’s Hollywood film studio. However, Shari Redstone, whose family controls Paramount’s parent company, National Amusements, says she would rather do a deal with billionaire David Ellison and his company Skydance Media. Paramount Global’s shares currently trade at a $7.7 billion total enterprise valuation on the Nasdaq, down from 2019’s $17 billion.

Nordstrom’s founding family, which controls 30% of the company, is seeking buyout bids to take the retailer private. The company currently has a market cap of $3.2 billion, down from $7.2 billion in March 2021. Leonard Green & Partners offered $8.4 billion to take Nordstrom private in 2018, but the company’s board rejected the deal. Since then, the retailer has held up better than most department stores but has still had its fair share of challenges due to lower store traffic, shifting consumer habits, and the rise of e-commerce competitors. 

Advent International, Hellman & Friedman, and Thoma Bravo are each in talks with Synopsys to acquire its $3 billion software security business, known as “SIG.” The company is likely trying to free up cash after its $34 billion acquisition of software developer Ansys. The SIG business unit is used by software developers to test the security of their applications. Synopsys executives, including CFO Shelagh Glaser, have experience doing deals with private equity.

Platinum Equity is weighing a sale of golf car manufacturer Club Car at a valuation of $2 billion. The company reportedly generated $200 million in EBITDA in the previous 12 months. Platinum Equity acquired Club Car for $1.7 billion in 2021 from Ingersoll Rand. While the company is most well-known for its golf carts, it’s been leading the way in creating a new category of “small-format electric lifestyle vehicles” for schools, hospitals, and consumers. Club Car CEO Mark Wagner has been with the company since 2017 when it was still a part of the Ingersoll Rand brand portfolio. 

Vista Equity is looking to exit Solera, a technology company that provides fleet management software for automotive companies, via an IPO in late 2024. Vista acquired the company for $6.5 billion in 2016 and has been heavily involved on the operations side. Darko Dejanovic, President of Vista’s Intelligence Group, has been CEO of Solera since 2019.

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