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

Kantar’s carve-out. HIG Capital announced its intentions to carve out Kantar Media, a media measurement and analytics platform, from its parent company Kantar Group, a global provider of marketing data and analytics.

Kantar Media’s purchase price has been set at $1 billion, to be paid primarily in cash, with additional non-cash considerations including separation-related investments from HIG Capital as well as a potential earn-out.

Around the world. HIG’s previous forays into the European media space tended to hinge on international expansion for their value-creation strategies. 

Take, for example, Brand Addition, a London-based marketing firm that HIG carved out from 4imprint in 2011 at an enterprise valuation of £24 million ($30 million) and sold in 2017 to Elysian Capital for under £50 million. Brand Addition was able to achieve this growth by opening new offices in Turkey, Russia, and China, as well as acquiring the US-based Gateway CDI. 

Similarly, The Engine Group, a global media consultancy acquired by HIG in 2010 for £62.5 million and sold to Lake Capital in 2014 for just over £100 million, also used HIG’s capital injection to fund international expansion, namely into the US and China. 

Kan’t stop. Kantar Media, however, already has a broad global presence, operating in over 60 markets with a swath of offices across the US, Europe, and Latin America, as well as offices in South Africa and southeast Asia. 

There are some noticeable gaps. Kantar Media sold its North American advertising intelligence unit (dubbed Vivvex) in 2023, meaning HIG could build that business arm back out. Additionally, Kantar Media doesn’t have offices in China, the world’s second-largest advertising market with double-digit growth projected through 2030. 

As such, Kantar Media noted international expansion plans in the press release announcing the acquisition by HIG. “This transaction would give us the resources and support to further accelerate our growth trajectory and strengthen our position as the global leader in media measurement and analytics,” stated the firm’s CEO Patrick Béhar.

Chris Jansen, the CEO of the seller, Kantar Group, corroborated this, stating: “We set up Kantar Media to be operationally independent in 2023, to allow it to consolidate its global leadership position in audience measurement. Today's proposed partnership announcement with H.I.G. Capital positions Kantar Media to continue its investments in technological and geographical leadership.”

HIG Capital did not respond to request for comment.

Portco News

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

• PS Alliance and Pearl Investment sold their collective 49 percent stake in Star Vision, a Korean manufacturer of colored contact lenses, to CVC. The deal values the company at ₩600 billion ($420 million). 
• KKR-backed healthcare provider BrightSpring sold its behavioral health business to Sevita, a provider of home-based specialty care, for $835 million. 

Meanwhile, portco M&A was in full swing:

• Caseware, a cloud-enabled auditor backed by Hg Capital, acquired Extractly.ai, an AI-based data processing solutions provider, for an unknown sum. This is Caseware’s ninth acquisition since Hg bought a majority stake in the firm in 2020.
• Clearlake Capital’s PrimeSource Brands, a provider of specialized building products, bought KeyLink, an aluminum rail systems manufacturer, for an undisclosed amount. This is the firm’s eighth acquisition since Clearlake bought a majority stake in the firm in 2020.
• Bluematrix, a financial services research publisher owned by Thoma Bravo, announced the acquisition of Street Context, an email intelligence and analytics platform, for an unknown sum.
• Canadian insurance broker Navacord Corp, backed by Madison Dearborn, announced plans to merge with Citistar Financial, a life insurance managing general agent. The unified brand will be called Waypoint and will manage over $1 billion in assets.
• Apax-backed Fibonacci Group, a consumer finance SaaS provider, bought consumer credit software platform Quid Group from Equinox Investments for an unknown sum. The deal doubles Fibonacci’s size to over 1,500 employees and €210 million ($220 million) in revenues.
• Fresche Solutions, a software company backed by APG, acquired OmniData Insights, an AI-enabled data analytics platform, for an undisclosed amount.
• Thoma Bravo announced plans to acquire and merge OPEXUS and Casepoint to create a data management platform for the public sector. Financial terms are unknown; what is known is that existing shareholders in both companies will retain minority ownership stakes. 
• Aptean, an enterprise software company backed by TA Associates, Insight Partners, Charlesbank Capital Partners, and Clearlake Capital, entered into a definitive agreement to take Logility, a provider of supply chain management software, private. The firm will pay $14.30 per share in cash, a 28.4 percent premium to the 30-day volume-weighted average share price as of 23 January, implying a total valuation of about $480 million.

And there were some key people moves:

• Bain Capital’s customer service specialist VXI Global Solutions appointed Ryan Collins as Chief Operating Officer. Collins previously served as the COO of Conduent, a government payments contractor.
• Azalea Investment Management, the private equity firm owned by Singaporean state investment firm Temasek, announced that its CEO Margaret Lui will step down from her role at the end of Q1 and be superceded by current CIO Chue En Yaw.
• Quest Software, backed by Clearlake Capital since 2022, hired Tim Page as its next chief executive, replacing Patrick Nichols, who held the role from 2020 to September of last year and still serves as a board advisor. Page’s most recent position was that of acting CEO at CloudSoda. 
• PharmaCord, a patient services company for the pharmaceuticals industry owned by Permira, appointed Robert Truckenmiller as CEO. Prior to PharmaCord, Truckenmiller served as the head of US vaccines at global biopharma company GSK. He replaces Nitin Shaney, PharmaCord’s founder and CEO who will continue to sit on the firm’s board.

Hot Take

All about popular. Few industries are as unpopular in America right now as the healthcare industry – according to a Gallup poll from August 2024, 51 percent of Americans have a negative view of the healthcare sector, while 61 percent had a negative opinion of the pharmaceutical sector. 

Add to that the fact that 56 percent of Americans (as of 2022) believe that banks and financial institutions have a negative impact on the country, and we have a recipe for disaster brewing for a major portion of PE portfolio companies.

Taking the pulse. Managers who think the heat might be dialed down with a friendlier administration in place need a reality check. Sure, Trump had a litany of business leaders behind him (quite literally) at his inauguration, amongst them hedge fund founders and financiers alike. But he has openly embraced an anti-establishment health agenda spearheaded by Robert F. Kennedy Jr. that emphasizes the culpability of business interests in denigrating Americans’ health.

Furthermore, there’s no guarantee that the FTC will veer off its current anti-PE path. In fact, the outgoing director of the FTC’s Bureau of Competition, Henry Liu, claimed that anti-merger enforcement has strong bipartisan support which will continue into the incoming administration. He’s not alone in this line of thinking – last week, we covered how Trump’s incoming FTC chair shared similar views to Biden’s Lina Khan when it came to the alleged anticompetitive behavior exhibited by WCA&S in a recent settlement. 

Not to mention, a large amount of the legal threats to PE-backed healthcare and pharma will come from the states. From blue states (New York, Connecticut, Massachusetts) to red states (Indiana), legislation limiting PE-backed healthcare is proliferating. 

All of this is to say: investors might want to get more creative with their value creation strategies in the space – roll ups likely won’t be a viable option in the near future.

More from Privitas

• 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)
• M&A Is Risky, But Operating Partners Choose It Anyways (Read)

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