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

Blare the sirens. Bain Capital has offered to take Surgery Partners private for $25.75 per share, a 21.2 percent premium over its January 27th closing price. The firm already owns a 39 percent stake in the ambulatory surgery operator.

The overall valuation implied by the bid for Surgery Partners is $3.2 billion – though experts say that may not be enough for Bain to stick the landing. 

But perhaps Bain’s history in the ambulatory sector will give it an edge over other interested bidders, a group which reportedly includes UnitedHealth Group and TPG.

Up in the air. Bain acquired Air Medical, the then-largest US provider of emergency air medical services, in 2010 at a valuation of $1 billion. The PE firm exited the company five years later in a transaction with KKR valuing Air Medical at $2 billion, or a 10x EBITDA multiple. 

Bain relied on financial engineering to make a profit. Air Medical was highly leveraged, with Bain taking out a $200 million unsecured loan in 2013 to pay out dividends to shareholders. Air Medical also added on REACH Air ambulance service in 2012, incurring $250 million in debt in the process. 

Another avenue for growth was raised prices – between 2008 and 2017, the cost of emergency air-based medical care nearly tripled, according to a study by the Health Care Cost Institute. 

With interest rates high and cuts unlikely in 2025, the latter growth method would be a more feasible option for Surgery Partners… However, increased scrutiny of medical care prices may throw a wrench in that, too. 

A source close to the deal claimed that “Bain Capital continues to believe Surgery Partners has significant value, and this offer only affirms its conviction in the company’s growth potential.”

Bain Capital declined to comment.

​​Portco News

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

• CVC agreed to sell its stake in OANDA, a digital multi-asset trading platform, to FTMO, a corporate training firm, for an unknown sum.
• CVC sold its majority stake in Hellenic Healthcare Group to PureHealth in a transaction valued at €2.2 billion ($2.26 billion).
• One Equity Partners sold WW Williams, a diesel engine parts provider and servicer, to Thomas H. Lee Partners for an undisclosed amount.
• New Mountain Capital bought Amerit Fleet Solutions, a fleet maintenance and repair business, from Brightstar Capital Partners for an unknown sum.
• Permira offloaded a 12-percent minority stake in luxury fashion brand Golden Goose to Blue Pool Capital. Financial terms were not disclosed.
• Bain Capital acquired Frontline Road Safety, an American pavement marking services provider, from The Sterling Group for an unknown sum.
• Monomoy Capital Partners sold Astro Shapes, a manufacturer of aluminum extrusions, to Wynnchurch Capital for an undisclosed amount.

Meanwhile, portco M&A was in full swing:

• Thoma Bravo’s Sophos, a cybersecurity firm, acquired competitor SecureWorks at a valuation of $859 million.
• Partners Group’s International Schools Partnership, a coalition of international schools founded by the firm in 2013, acquired its tenth school in the Middle East, the Doha, Qatar-based Durham School for Girls, for an undisclosed sum.
• Canada Cartage, a trucking firm owned by Mubadala, bought Walmart’s Canadian fleet business for an unknown amount.
• Thoma Bravo-backed Cority, a provider of environmental, health, and safety software, acquired Meddbase, a provider of occupational health software. Financial terms were not disclosed.
• Charlesbank Capital Partners’ cybersecurity asset Searchlight Cyber made its first add-on with its A$100 million ($61.8 million) Assetnote deal. Assetnote is an Australian attack surface management provider.
• Arax, a wealth management firm owned by RedBird Capital, acquired Cedrus Financial, a Colorado-based registered investment advisor with over $1 billion in assets under administration. 

And there were some key people moves:

• Nordic Capital promoted Henrik Sandreus and Martin Jacobsson, members of the firm’s operating advisory team, to operating partners. 
• Investcorp hired a new global head of private equity, Daniel Lopez-Cruz, replacing Dave Tayeh, who is leaving the firm to start his own venture. Lopez-Cruz was previously a senior member of Investcorp’s European PE business for 18 years, but he left in 2023 to found Mulhacen Limited, an investment advisory firm. 
• CVC shook up its US private equity team, moving the previous head of North American PE, Chris Stadler, to a new position as the chair of North America and a member of CVC’s investment committee. Stadler will be replaced by Lorne Somerville and Cathrin Petty, the former London-based heads of CVC’s strategic opportunities advisory strategy and European healthcare strategy, respectively,

And finally, there was one high-profile investor lawsuit. An investor alleged that the $1.7 billion take-private that Zuora, a subscription billing software company, struck with Silver Lake in October 2024 undervalued the firm in order to provide better personal terms for its founder, Tien Tzuo. Those terms included keeping him on as CEO and rolling over most of his equity post-deal – supposedly at the cost of deflating the sale price.

Hot Take

Bated breath. We were all waiting to see how serious President Trump was about a potential trade war. The answer? Very.

While he postponed Mexican tariffs, a 25 percent levy on Canadian goods and a 10 percent tax on Chinese imports will take place starting Tuesday. The EU and the UK are reportedly next.

A taxing affair. Almost no segment of the economy will be unimpacted by the President’s actions – especially not private equity.

Most PE firms, if they’re invested in the United States, likely have exposure in Europe and Canada, too. EU companies represent 55 percent of total investment in the United States, according to the Center for Strategic and International Studies. 

And the subsectors that have been hottest in PE will be the first to feel the pain of tariffs given their highly globalized supply chains. Technology, energy, and pharmaceuticals – all of these subsectors had high PE deal volume in 2024.  

All of this will likely bring downward pressure on valuations. And given how precarious the liquidity situation is now for the entire ecosystem, that spells very, very bad news for the industry.

More from Privitas

• Are All of 2024’s Bad Assets in Continuation Funds? (Read)
• Mega Fund Exit Trends 2025 (Read) 
• Small Exits Outperformed Large Ones in 2024 (Read)
• Portco CFOs Key to Successful Roll-Up Strategies (Read)
• Technology: Value Creation 2024 (Read)

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