Happy Monday! It’s Isabel O’Brien here with Value Add, a free weekly newsletter from Privitas covering the latest private equity operations news. Here’s what you need to know this week.

Done Deal

Calculated. CVC Capital Partners is tendering an offer to take CompuGroup, a German healthcare software firm, private. 

The firm is ready to pay €22 per share, or €1.18 billion ($1.2 billion) total for the company, at a 51.1% premium over the three month volume-weighted average stock price and a 33.5% premium over the December 6th closing price.

Systematic. It isn’t CVC’s first foray into healthcare IT – the firm invested in System C, a British healthcare software provider, in 2021. 

Since then, M&A has been the main strategy for growth for the company, with CVC leading add-ons for the firm including Clevermed, a maternity records software provider, and Oxford Computer Consultants, a financial contracts software solutions provider for the public sector, in 2023, CIS Oncology in 2024, and WellSky International in 2021. 

The pursuit of endless cloud growth, though, poses significant risks. Privitas’s August article, “Does PE Ownership Bear Some Blame for the Healthcare Cyberattack Crisis?”, outlined how the practice of piling healthcare data onto cloud-based servers has increased cyberattacks in the industry. System C, to its credit, has not faced any public cybersecurity attacks while being awarded for high financial performance, though financial details have not been disclosed.

Whether or not CVC will be able to replicate growth alongside secure servers at CompuGroup remains to be seen.

CVC and CompuGroup did not respond to requests for comment.

Portco News

PE portcos also saw some full and partial exits last week, as well as some exits-to-be:

• Insurance broker AssuredPartners, owned by GTCR and Apax Partners, is due to be acquired by Arthur J. Gallagher & Co. for $12 billion. 
• Bain Capital’s Kioxia, a Japanese chip manufacturer, set plans to IPO this week at a valuation of $5.2 billion. 
• ServiceTitan, a home services software provider owned by Iconiq and Bessemer Venture Partners, IPO'ed last week at a valuation of $10 billion, garnering $1 billion in returns for Iconiq and $800 million for Bessemer.  
• Nippon Life bought Resolution Life from Blackstone for $8.2 billion (at a valuation of $10.6 billion). 
• CIC Partners sold McClancy Foods to NovaTaste. Financial terms of the transaction were not disclosed.
• The Carlyle Group sold its portfolio company 1E, a corporate IT services software provider, to TeamViewer at an enterprise value of $720 million. 
• Cinven’s Nitel, an enterprise network connectivity service provider, was sold to Comcast Business for an undisclosed amount.

Meanwhile, portco M&A was in full swing:

• Apollo-backed Novolex, an America packaging company, bought Pactiv Evergreen, a food packaging business, for $3.22 billion. The deal was valued overall at $6.7 billion including debt.
• PrimeSource Brands, a residential branded products business owned by Clearlake, bought Harney Hardware, a door and bathroom hardware manufacturer and distributor, for an undisclosed amount. 
• Calabrio, a workforce management platform owned by Thoma Bravo, acquired Echo AI, an AI company focused on customer service and interactions. Financial terms of the deal were not disclosed.
• Another Thoma Bravo portco, EQS Group, an investment cloud software provider, acquired Daato, an ESG reporting platform, for an unknown sum.
• And finally Raptor Technologies, a school safety solutions company also owned by – you guessed it – Thoma Bravo, bought edtech company Smartpass for an unknown amount.

And there were some key people moves:

• Insurity, an insurance company software provider owned by GI Partners and TA Associates, promoted Sylvester Mathis from chief insurance officer to chief revenue officer. 
• Capitol Meridian Partners appointed Curtis M. Uehlein as an operating executive. 

Hot Take

A legacy. David Bonderman, the legendary co-founder of TPG, died last week. He was 82 years old.

By all accounts, the private markets ecosystem he helped establish is slowly waning. Corporate buyouts have lost a lot of ground to alternative investment products like real assets and private credit. 

However, there is one aspect of his legacy that PE professionals should never forget: his legacy as an operator.

“This was a person that never took a finance class. Didn’t know accounting. And yet he brought that broad experience and problem-solving expertise to the problems of investing, and his ability to use the different experiences he had to solve problems really created his style,” Jim Coulter, Bonderman’s co-founder at TPG, told Bloomberg.

Next gen. Indeed, Bonderman didn’t start his career as an investor until his 40s. Before that, he had a decades-long career in law, serving as a litigator, a special assistant to the US Attorney General during the Johnson administration, and as a law professor at Tulane University. When he got into investing, his first position was that of chief operating officer.

Perhaps most importantly, Bonderman was a strong proponent of ESG, stemming from the conservationist work he did while practicing law.

“The investment community, especially pension funds in the U.S., and Canada, have become interested in environmental and political causes of the sustainable sort,” Bonderman told environmental news outlet Mongabay in 2020. “I think that people, including businesses, will pay attention to issues beyond carbon as they get more familiar with what’s going on.”

He concluded: “This is only the start of what’s going to be a generations-long battle in favor of keeping the environment stable.”

With his passing, Bonderman has indeed passed on this fight to the next generation of investors and operators. Let’s hope they take his words to heart.

More from Privitas

• Technology: Value Creation 2024 (Read)
• Could Unhappy Employees Be Good For Tech Exits? (Read)
• Portco IQ: Technology 2024 (Read)
• Top Tech Exits in 2024 Were to Strategic Acquirers (Read)
• Exits Are Back, But Different (Read)

That’s all for this week – thanks for reading. Have questions? Email isabel.obrien@privitas.com.