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PE HUB Wire Highlights, 11.27.19

Silver Lake invests $500 mln in Manchester City owner; New Mountain puts Western Dental on the block; Owl Rock fund to target stressed cos

Morning, Hubsters. We’re in the processing of switching sites and relaunching the morning wire. Expect a new look and some big news next week.

We have some interesting M&A statistics from Partners Group. Companies that are perceived as stable and non-cyclical are trading at sky high valuations of 20-25x EBITDA, the firm said. “Companies fetching these prices tend to be technology enablers, supported by long-term demand drivers and a high share of recurring revenues,” Partners Group said.

On the other end, Partners Group is also seeing several failed processes for lower quality assets. These companies are considered cyclical or have exposure to disruption risks. Partners Group said it has seen over 100 failed auctions globally for these lower quality assets. Yowzah! Asset sales from several younger PE portfolios is helping drive this phenomenon, the firm said. “Given the absence of portfolio management pressures, general partners have the flexibility to stop sales processes if the bid price falls below their expectations,” the firm said.

I am seeing these high valuations. Consider GTCRwhich is seeking 20x or $1 billion plus for Paya. We’re very interested to hear about the processes that didn’t result in a buyer. Hubsters, are you seeing this trend? Are 100 failed auctions normal? If not, why are these deals stopping? Email me at lbeltran@buyoutsinsider.com

Gooooaaaal! The big deal today is Silver Lake‘s $500 million investment in City Football Group, which owns Manchester City. Silver Lake is getting more than 10 percent of City Football, which is now valued at $4.8 billion.

The deal comes one day after Silver Lake agreed to buy First Advantage for more than $1.5 billion. Symphony Technology Group was the seller.

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