CD&R raises the bar with largest single-asset deal on Belron, Thoma Bravo to buy Bottomline Technologies

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The Wire

Dec. 20, 2021

CD&R raises the bar with largest single-asset deal on Belron, Thoma Bravo to buy Bottomline Technologies

Happy Monday!

Largest single-asset deal ever: Clayton Dubilier & Rice closed what appears to be the largest ever single-asset secondaries deal after assembling an investor group to invest about $4 billion for more time and capital to manage its portfolio company Belron, Buyouts’ Chris Witkowsky writes.

The deal, announced on Friday, was broken into two parts: a traditional M&A sale and a continuation fund process. CD&R sold a 39 percent stake in Belron, which operates glass repair brands globally, to Hellman & Friedman, GIC and Blackrock Private Equity Partners in a traditional M&A process.

The continuation fund, called CD&R Value Building Partners I, picked up the remaining 61 percent stake. Generally speaking, secondaries buyers lead continuation fund deals, Witkowsky writes. In this case, it’s not clear who the investors were in the vehicle. CD&R will continue to hold a 20 percent stake in Belron, primarily through the continuation fund.

Thoma Bravo to acquire Bottomline: Thoma Bravo continues to tear up the pavement as a software investor, announcing on Friday that it agreed to buy Bottomline Technologies, a fintech company that makes complex business payments simpler and more secure. Expected to wrap up in Q2 2022, the deal will take the Nasdaq-listed Bottomline private for $57 per share in cash, valuing it at about $2.6 billion.

Thoma Bravo has been tracking Bottomline for some time as part of its fintech thesis, which focuses on the sector’s role in digital acceleration. The PE firm reports doing about 17 fintech platform investments and 20-plus add-ons.

Penfund’s Fund VII holds initial close: As private debt fundraising gathers steam, Penfund secured most of the C$1.5 billion ($1.2 billion) target set for its seventh offering in a first close. The Canadian junior capital investor in November raised C$928 million for Penfund Capital Fund VII, partner Richard Bradlow told Buyouts.

Bradlow attributed LP demand in part to the growing appeal of the asset class, which is perhaps indicated in this year’s private debt fundraising. Capital raised by global funds reached nearly $150 billion as of September 30, up 19 percent from the same time in 2020, affiliate title Private Debt Investor reported.

Read the full wire commentary on PE Hub ...

Also of note (may require subscriptions)

Private markets capital is being sucked up by established managers, but LPs are making room for one type of first-time fund: the sustainable one. (New Private Markets)

Pollen Streets's Matthew Potter wrote a guest column on Private Debt Investor offering insight into the role non-bank lending has to play in reforming capital markets.

"The costs of forming private-equity funds are rising and investors are also being asked to foot the bill for certain expenses that historically were covered by fund managers, according to a recent report from the Institutional Limited Partners Association." (WSJ Pro)