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Apollo’s Hybrid Value strategy at work in gastroenterology exit; plus, a look at Arlington’s medical device deal

Good morning, Hubsters.

It’s John R. Fischer here, with the US edition of the Wire from the New York newsroom, filling in for Rafael Canton, who is off today ahead of the holiday weekend.  

Let’s start with my “Inside the Exit” story on how Apollo helped grow a physician provider network that Cardinal Healthagreed to buy in a deal valued at $3.9 billion. The transaction showcases Apollo’s Hybrid Value approach.

Then, we’ll take a look at an exclusive I wrote earlier in the week about a medical device maker acquired by Arlington Capital Partners.  The deal underscores trends in manufacturing.

Also, we’ve got a market update from investment bank Houlihan Lokey on the freight M&A market.

Finally, in honor of Thanksgiving tomorrow, I’ve rounded up some recent food and beverage deals covered by PE Hub that have attracted the likes of Shore Capital, Enterprise Investments and The Riverside Company, among other PE firms.

Hybrid Value

Earlier in November, Cardinal Health announced it would acquire the majority stake in GI Alliance (GIA), a physician-led gastroenterology network, from a combination of physician owners and Apollo Global Management. The deal valued GIA at $3.9 billion.

To learn more about the deal with Cardinal and Apollo’s Hybrid Value approach for growing the company, I spoke with Jason Scheir and Robert Ruberton, partners and co-heads of Hybrid Value.

Upgrade to the premium version of the Wire to read the full story.

Reshoring, onshoring and nearshoring

Earlier in the week, Arlington Capital Partners announced it has acquired Team Technologies from Clearlake Capital Partners, I was the first to report. The company outsources manufacturing processes for medical device and pharmaceutical original equipment manufacturers.

Premium subscribers to the Wire can read more about this and other PE-backed manufacturing deals.

End of the great freight recession?

PE firms and other investors are hungry for M&A opportunities in the freight market, which is seeing upticks in volume and driver demand as capacity and supply stabilize, according to investment bank Houlihan Lokey’s Transportation and Logistics market update.

Two such deals covered by PE Hub recently are Stonepeak’s $3.1 billion take-private of Air Transport Services Group; and GHK Capital’s acquisition of maritime logistics firm Horizon Air Freight from ICV Partners.

Read more about the report in the premium version of the Wire.

Eat, drink and make deals

In honor of Thanksgiving, I’ve compiled a list of five food- and beverage-related deals announced this month alone:

• • • • Red Arts-backed Coregisticsacquires Belvika Trade & Packaging
    • • Shore Capital-backed Whestone Distribution buys meat purveyor Anmar
    • • New Heritage exits corporate foodservice provider Continental Services
    • • Enterprise Investors-backed Studenac plans IPO
    • • Riverside agrees to sell HTBA to Miura Partners
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• PE Hub’s Sophie Rose also wrote up a listicle earlier this month on 10 deals in the snack industry, a sector that has attracted PE firms such as AUA Private Equity Partners, Seven2 and Union Capital.
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• That’s it from me.
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• As always, feel free to reach out to me at [email protected].
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• Schedule note: Craig McGlashan will bring you the Europe edition of the Wire as usual tomorrow, but, in observance of Thanksgiving, there will be no US edition. On Friday, Craig will bring you a special combined US/Europe edition.
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• On behalf of all of us here at PE Hub, we wish you all a Happy Thanksgiving!
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• Cheers,
• John R. Fischer
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• Read the full Wire commentary on PE Hub ...
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Also of note (may require subscriptions)

Palladium Equity Partners has rehired one of its former employees to lead the firm’s healthcare strategy. Rafael Ortiz, who previously spent more than a decade at Palladium before leaving in 2016, will take up a new position as a principal, partner and member of the firm’s investment committee. (Buyouts)

Manulife Investment Management’s global head of institutional, Colin Fitzgerald, will be moving on amid leadership changes and staff cuts at the Canadian firm, Agri Investor can reveal. Paul Lorentz, CEO of Manulife Wealth and Asset Management, will take over Fitzgerald’s duties on an interim basis, said a spokesman.

The Mastercard Foundation has agreed to purchase private equity and other illiquid assets from Eastman Kodak’s pension plan in the latest example of a non-traditional buyer entering the secondaries market. (Secondaries Investor)

JLL Partners, which traces its origins back to a 1980s Wall Street merchant bank, is in the market with a ninth flagship buyout offering. (Buyouts)

Carbon markets: A COP-out or a step forward? COP29 has finally kick-started Article 6 of the Paris Agreement to establish transparent carbon markets, but critics warn unresolved flaws may undermine emissions reduction efforts. (Agri Investor)

How Patria is planning to bring Asian LPs to Latin America: The group sees a $100bn pipeline of "actionable equity" over the next five years, infrastructure CEO Andre Sales told Infrastructure Investor.

The latest entry in Private Equity International's excellent, infographic-driven "Number Crunch" series takes a look at how PE investment in the education sector has slumped since the pandemic-driven days of online learning.

Mergers and acquisitions, once the number one number use of capital raised by direct lenders, now accounts for just 48 percent of fund proceeds, according to a Q3 report on the private debt asset class by Configure Partners. (Private Debt Investor)

They said it

“There’s been a series of geopolitical, macroeconomic and global health events over the last five years that have driven medical device companies to pursue reshoring, onshoring and nearshoring for their manufacturing as they look to ensure that their supply chains are as strong, resilient and insulated from those factors as possible.”

— Matt Altman, a managing partner at Arlington Capital Partners, about the firm's acquisition of Team Technologies from Clearlake