Value Investing

Billion-Dollar Rumors Abound For Some Of Private Equity’s Biggest Names

In the end, it might not add up to all that much. But the early half of the week provided a frenzy of rumored mega-deals, with several of the most powerful private equity firms in the world reportedly growing close to major portfolio additions.

Private Equity

Private Equity

The spiciest example comes from Atlanta, headquarters of Popeyes Louisiana Kitchen (NASDAQ: PLKI), which has been approached by Restaurant Brands International (TSX: QSR) about a possible takeover, according to Reuters. RBI is controlled by 3G Capital and is the parent company of other fast food chains Burger King and Tim Hortons.

Popeyes’ stock rose some 7% in the wake of the Monday report, but in the end, this one may prove more smoke than fire: The New York Post has reported that RBI had already walked away from the potential take-private acquisition after Popeyes stock has risen some 30% since last March. Reports surfaced last year that 3G was raising $10 billion for its next major consumer deal, and Popeyes doesn’t quite fit the profile of other rumored targets like General Mills.

Moving from chicken wings to window dings, private equity titans Blackstone and The Carlyle Group are mulling a sale of joint portfolio company Service King Paint & Body in a deal that could value the company at more than $2 billion, per Bloomberg. Carlyle has backed the business since 2012, while Blackstone bought out a majority stake during 2014. While no deal is believed imminent, a sale would mark the latest in a steady string of massive transactions for Blackstone during 2017.

And in a final report, owners TPG and Leonard Green & Partners are seeking a buyer for portfolio company CCC Information Services, a provider of auto-insurance software, at a price tag of around $3 billion, according to Bloomberg. TPG and LGP have been co-owners of CCC since 2012, when LGP acquired the company from Investcorp (with the seller netting $550 million) and then flipped a 50% stake to its PE competitor.

As a sector, the workflow software industry has been a site of increasing private equity activity over the past decade. While investors completed 31 deals in 2010 and just 27 in 2011, that figure has skyrocketed in the years since, according to the PitchBook Platform, rising to a new high of 66 transactions last year.

Article by Kevin Dowd, PitchBook