PitchBook is providing ongoing coverage of the coronavirus outbreak and its effects across the private markets and the economy.
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PE firms, Thyssenkrupp wrap up $20.3B elevator dealA consortium led by Advent International and Cinven has closed its acquisition of the elevator business previously owned by German industrial conglomerate Thyssenkrupp for €17.2 billion (about $20.3 billion). The Abu Dhabi Investment Authority and Germany's RAG Foundation also participated in the buyout, which comes after the group beat out a host of private equity bidders in an auction that concluded in February.
Battered financially by the coronavirus crisis, Thyssenkrupp plans to use the funds from the sale to pay down its debt load, reinvest in its other lines of business and buy back a 15% stake in the elevator unit, according to Reuters. The company will reportedly back off from previous plans to draw on a €1 billion credit line. —Adam Lewis, 4:48 p.m. PDT, July 31
Carlyle, Apollo both back in the black after grim Q1The Carlyle Group and Apollo Global Management both returned to profitability in the second quarter of the year, with double-digit appreciation in the firms' private equity portfolios keying a rebound from massive first-quarter losses that came after the pandemic caused markets to plummet in March.
Carlyle reported 13% growth in its private equity portfolio during its Q2 earnings report on Thursday, compared to an 8% decline in Q1. Apollo, meanwhile, announced an 11.7% appreciation for its PE assets in its own earnings report, a reversal from a 21.6% dip in Q1.
Still, both firms expect to continue experiencing considerable upheaval in the foreseeable future, driven by the pandemic and a host of other events that are turning 2020 into an unprecedented year. —Adam Lewis, 11:20 a.m. PDT, July 31
Demand for digital innovation will drive growth in enterprise healthtechVenture investment in the enterprise health & wellness tech industry slowed last quarter amid economic headwinds created by the pandemic. Yet as the era of patient-driven care propels demand for digital health technologies, the future remains bright.
Our Q2 installment of Emerging Tech Research on the sector breaks down the enterprise side of health & wellness tech into four categories, explores core drivers of startup success, and includes market maps and long-term forecasts. Key takeaways include:
- The enterprise health & wellness tech industry is projected to reach $1.3 trillion by 2025
- VC investment in the space totaled $1.9 billion in the first half of 2020, down 30% year-over-year, but the decline is expected to be temporary
- The coronavirus outbreak is likely to drive significant investment in companies focused on fighting future outbreaks
Examining how US economic uncertainty is impacting VCBetween 2008 and 2009, the onset of the global financial crisis caused a 31% decline in the median valuation jump for early-stage startups raising new venture capital. Will the coronavirus crisis cause a similar dip?
PitchBook analysts Daniel Cook and Andy White join our hosts on the latest episode of the "In Visible Capital" podcast to answer that and several other questions about how the pandemic may affect the startup landscape, drawing on their recent quantitative research into how US venture capital fares during times of economic uncertainty. Topics include:
- How the 2008 recession is impacting how PitchBook views the current VC ecosystem
- How to evaluate the impact of exit value vs. number of exits
- What limited partners make of the VC landscape
German coronavirus vaccine developer files for IPOGerman biotech company CureVac has filed for an initial public offering on the Nasdaq. The company began a clinical trial for a COVID-19 vaccine in June, with results expected in Q4. Dietmar Hopp, co-founder of software company SAP and current managing director of Dievini, CureVac's majority shareholder, will buy €100 million (around $116 million) worth of shares in the company at the IPO price. —Vishal Persaud, 12:14 p.m. PDT, July 27
KKR readies listing for defense supplier HensoldtAfter delaying a planned public debut because of the pandemic, KKR is now preparing a fall IPO in Frankfurt for Hensoldt, a manufacturer of sensors for the defense industry, according to Reuters. The offering could value the German business at up to €3 billion (about $3.5 billion). KKR bought Hensoldt from Airbus for €1.1 billion in 2016. —Kevin Dowd, 12:33 p.m. PDT, July 29
Blackstone bounces back after COVID-19 lullAfter taking a beating during the pandemic-inspired market selloff, Blackstone saw a sharp rebound in quarterly earnings, reflecting a subsequent turnaround in the stock market.
The buyout juggernaut posted a net income of $568.3 million, or 81 cents per share, in Q2. The earnings marked an increase from Q1's roughly $1.1 billion loss, or $1.58 per share, after COVID-19 caused public markets to plummet, and a year-over-year decline from Blackstone's Q2 2019 net income of $1.2 billion, or $1.80 per share. The New York-based firm saw its corporate private equity portfolio surge 12.8%—a turnaround from a nearly 22% drop in Q1.
Meanwhile, Blackstone's distributable earnings, or the amount available to pay shareholders, was $548 million, or 43 cents a share, down from $708.9 million, or 57 cents a share, in the same period last year. But the firm's assets under management jumped to $564.3 billion, up from roughly $538 billion at the end of last quarter. Public investors apparently paid little notice, however, with Blackstone stock dropping 2% on Thursday to $56.67 per share. —Adam Lewis, 10:00 a.m. PDT, July 27
Occidental weighs $4.5B asset saleOccidental Petroleum has engaged Indonesian state-owned energy company Pertamina in talks about a potential $4.5 billion deal for some of the Houston-based company's oil and gas assets in Ghana, the UAE and other countries, according to Bloomberg. Occidental has been hit by a drop in energy demand this year amid the pandemic, after completing a $37 billion acquisition of Anadarko Petroleum in 2019. —Kevin Dowd, 3:20 p.m. PDT, July 30
CES goes virtual in 2021The next Consumer Electronics Show will be held online, organizers announced, marking the latest and one of the largest events disrupted by the coronavirus. More than 170,000 people attended this year's show in Las Vegas, according to The Wall Street Journal, and thousands had already signed up for the 2021 conference. Gary Shapiro, the CEO of CES' governing body, said on LinkedIn that they plan to resume the in-person event in 2022, but with the pandemic raging and no real hope for a widely available vaccine by early January, it was not possible to hold the event safely. "The world does not need more COVID-19 cases, and we decided we would do our part by ensuring we are not helping spread the disease," Shapiro wrote. —Kate Rainey, 11:16 a.m. PDT, July 28
China's IPO market makes post-COVID-19 comebackA wave of Chinese companies is suddenly flocking to the public markets, as several weigh initial public offerings in Hong Kong and Shanghai.
Two electric vehicle makers are eyeing IPOs on Shanghai's STAR board, according to Bloomberg. Tesla rival WM Motor is reportedly planning an offering for as soon as this year that would value the company at more than 30 billion yuan (around $4.3 billion). The Shanghai-based company's investors include Alibaba, Baidu, Tencent and Sequoia China. Meanwhile, Hozon Auto is targeting a listing for 2021 and wants to secure 3 billion yuan in Series C funding, Bloomberg reported.
The potential public listings follow fintech giant Ant Group's announcement that it is seeking a dual listing in Hong Kong and Shanghai in what could be one of the largest offerings in years. And dairy products maker Junlebao is reportedly following suit with a dual public listing of its own in China. —Vishal Persaud, 12:20 p.m. PDT, July 27
Despite a pandemic, VC activity booms in EuropeThe global economy was in turmoil during the second quarter of the year. But that didn't stop startups in Europe from raising €9.5 billion in new funding, the third-largest quarterly total on record.
PitchBook's Q2 2020 European Venture Report takes a close look at that stunning resilience in the face of a pandemic. It also offers detailed data and analysis from the rest of the VC landscape, with other key takeaways including:
- VC exit activity in Europe bounced back in Q2 after a slow start to the year
- European firms are on pace to set a new annual record for VC fundraising
- An increase in remote work is driving investor interest in cybersecurity
Investor appetite for mobility stays strong despite shutdownsThe coronavirus pandemic has profoundly affected the global transportation system, with social distancing and stay-at-home orders transforming consumer behavior.
Yet despite what will likely be a substantial impact in the near future, long-term prospects for startups in the mobility tech sector remain strong, PitchBook analysts found. Our newest Emerging Tech Research report includes an overview of the mobility tech landscape, market maps of VC-backed companies, and deep dives into segments including autonomous cars and ridesharing. Key takeaways include:
- Mobility tech companies raised a total of $10.8 billion in Q2, a 7% increase year-over-year
- Tech investors are expanding their foothold in mobility as traditional automaker incumbents grapple with the pandemic
- Electric vehicles appear to have a bright future as investors, corporates and governments strengthen their commitment to the technology
Demand for clinical-trial recruitment provides opportunity for startupsThe pandemic has sped up drug development, but the industry was already surging: The clinical-trial market is expected to be worth $65 billion by 2025. All that testing will require a steady flow of patients who are willing to try out new medications, potentially providing an opportunity for startups to help keep the pipeline full.
In our research note Transforming Clinical-Trial Patient Recruitment and Retention, PitchBook analysts find:
- Startups in the space are aiming to attract and keep patients involved in clinical trials by creating monitoring technology and personalized platforms
- More complex studies and regulatory requirements are boosting the demand for patients
Did you miss any of our continuing coverage of COVID-19? Find our previous updates below:
- Coronavirus effects on private markets (July 20-July 26)
- Coronavirus effects on private markets (July 13-July 19)
- Coronavirus effects on private markets (July 6-July 12)
- Coronavirus effects on private markets (June 29-July 5)
- Coronavirus effects on private markets (June 22-June 28)
- Coronavirus effects on private markets (June 15-June 21)
- Coronavirus effects on private markets (June 8-June 14)
- Coronavirus effects on private markets (June 1-June 7)
- Coronavirus effects on private markets (May 25-May 31)
- Coronavirus effects on private markets (May 18-May 24)
- Coronavirus effects on private markets (May 11-May 17)
- Coronavirus effects on private markets (May 4-May 10)
- Coronavirus effects on private markets (April 27-May 3)
- Coronavirus effects on private markets (April 20-April 26)
- Coronavirus effects on private markets (April 13-April 19)
- Coronavirus effects on private markets (April 6-April 12)
- Coronavirus effects on private markets (March 30-April 5)
- Coronavirus effects on private markets (March 23-March 29)
- Coronavirus effects on private markets (March 4-March 22)