Kevin Dowd August 02, 2016
It was a big Tuesday for Platinum Equity. First, a high-priced acquisition: The firm has unveiled an agreement to acquire Network Power from Emerson (NYSE: EMR) in a transaction valued at $4 billion—a figure that will represent the largest purchase price in Platinum’s history, according to the PitchBook Platform. Network Power is a provider of thermal management, A/C and D/C power, transfer switches, services and information-management systems for the datacenter and telecommunications industries. The company generated a reported $4.4 billion in revenues during fiscal 2015.
Platinum has also completed the sale of the European business of Mactac to Avery Dennison (NYSE: AVY) for €200 million, including assumed debt. The business, which logged 2015 revenues of €147 million, is a manufacturer of pressure-sensitive materials for a variety of industry segments, including graphics, specialty labels and industrial tapes. Platinum has backed Mactac since 2014 and will continue to own the company’s North American operations.
While the former deal will garner most of the headlines, it’s the latter that better represents Platinum’s current place in the buyout cycle. The firm has announced or completed five exits during 2016 (including the sale of Maxim Crane Works to Apollo Global Management earlier in the week), already equal to last year’s total and on track to approach the record 10 exits the firm recorded in 2014.
In terms of deal flow, though, Platinum is in the midst of a lull, with just six acquisitions executed this year after completing 17 during 2015. Thus far this year, the firm seems much more interested in reaping the benefits of past investments as opposed to sowing more seeds in a private equity landscape that’s currently none too kind to acquirers.
Looking back at the firm’s past decade of activity, those numbers make a good deal of sense. In 2010, Platinum completed a record 19 deals, followed by 17 each in 2011 and 2012. Those investments have spent between four and six years in the Platinum portfolio, which means we likely haven’t seen the last of the firm’s notable exits here in 2016.