• Stock in Walgreens Boots Alliance surged 9% today after the company said it will acquire a majority stake in primary-care provider VillageMD for $5.2 billion, a sign of investor optimism about the pharmacy giant's plans to shift further into healthcare. Walgreens plans to open at least 600 new primary care practices under the Village Medical at Walgreens branding by 2025 and 1,000 locations by 2030, with a stated motivation of improving access to healthcare for residents of communities who might not have a nearby doctor's office but are close to a Walgreens. VillageMD currently operates 230 locations. Walgreens previously invested in the Chicago-based company last July, paying $1 billion for a 30% stake. The new deal will give Walgreens 63% ownership.
• Mindbody, which operates a platform for finding and booking appointments at fitness studios, salons and other boutique businesses, is adding to its offerings with the acquisition of ClassPass, which offers a subscription service that gives users access to multiple fitness and wellness facilities for a single monthly rate. It's a logical combination of two companies with complementary services. Vista Equity Partners has owned Mindbody since conducting a $1.9 billion take-private buyout in 2019, and ClassPass has raised hundreds of millions in prior venture funding. Today's agreement values ClassPass at "significantly" more than $1 billion, according to an Axios report, and it will include a $500 million strategic investment in the combined company from Sixth Street.
• I wrote on Sunday about the rising rate of canceled IPOs. Here's another name to add to the list: WCG Clinical, a provider of clinical trial services for the pharmaceutical industry, has withdrawn the registration for an IPO that was set to raise as much as $765 million and value the company at nearly $6.5 billion. That means Leonard Green & Partners will have to wait a while longer for what would have been a lucrative exit. LGP purchased WCG Clinical in February 2020 from Arsenal Capital Partners in a secondary buyout reportedly worth about $3 billion.
• Perhaps a postponement also would have been a good idea for IHS Holding, also known as IHS Towers. The operator of more than 30,000 telecom towers across Africa, Latin America and the Middle East saw its share price plummet 18% during its first two hours of trading after it went public on the NYSE today, one of the biggest first-day drops we've seen during what has largely been a banner year for IPOs. IHS raised $378 million in the listing by selling shares at $21 apiece, at the low end of its expected range. That valued the London-based company at about $6.9 billion, a figure that fell to $5.8 billion when IHS shares opened trading at $17.65.
• Not all of today's IPO news is negative. Rubix Group, a portfolio company of Advent International that provides industrial maintenance and repair services, revealed that it will aim to raise at least €850 million (about $985 million) in a listing in London, which the Financial Times reports would result in the U.K. capital's largest industrial IPO in a decade. Advent formed Rubix in 2017, when it acquired an industrial maintenance business called IPH from PAI Partners and merged it with Brammer, an industrial parts distributor the firm had acquired in a take-private buyout earlier that year.
• Tempo Automation, a startup that uses AI and software to help clients manufacture custom circuit boards and other electronics, announced its intent to go public by merging with a SPAC at an equity valuation of $919 million, with cash proceeds from the deal expected to total $391 million. The SPAC, called ACE Convergence Acquisition Corp., is sponsored by ACE Equity Partners, a private equity firm based in Seoul that focuses on the industrial tech and manufacturing sectors. Tempo has raised about $75 million in prior venture funding, according to PitchBook, reaching a $200 million valuation in 2019.
• A pair of fintech startups are joining forces. SumUp, a U.K.-based maker of mobile credit-card readers used by small businesses, said it will pay $317 million in cash and stock to acquire San Francisco's Fivestars, a payments and marketing startup that helps companies collect and leverage data from their customers. The takeover is a bid by SumUp to keep pace with rivals in the mobile payments space such as Square and iZettle. Fivestars has raised nearly $150 million in prior equity funding from backers including Menlo Ventures, DCM Ventures, Lightspeed and Chamath Palihapitiya, according to PitchBook, while SumUp raised €750 million (about $869 million) in debt funding earlier this year
• MSD Partners, a firm with roots in Michael Dell's family office, will buy a 50% stake in West Monroe, a tech consulting and advisory firm based in Chicago with more than 2,000 employees. The transaction values West Monroe at about $2.5 billion, according to Bloomberg, which would imply that MSD is investing some $1.25 billion. West Monroe pitches its multidisciplinary approach to consulting, guiding companies on broader strategy and implementation in addition to tech. MSD Partners was founded in 2009 by the partners of Dell's family office, which goes by MSD Capital.
• Energy giant Occidental struck a pact to sell its stake in two oil fields off the coast of Ghana for $750 million, the company's latest move to cut down its debt in the wake of its controversial acquisition of Anadarko Petroleum. Occidental CEO Vicki Hollub, the architect of that takeover, said the company has repaid $4.5 billion in debt so far this year. Deepwater exploration specialist Kosmos Energy will pay $550 million for part of Occidental's holdings, and the Ghana National Petroleum Corporation will pay $200 million for the remainder. The assets had combined net production of 22 thousand barrels of oil equivalent per day during the second quarter of 2021.
• London-based private equity firm BC Partners has raised around €5 billion (about $5.8 billion) for its 11th flagship buyout fund since beginning to canvas LPs early last year, falling well short of an €8.5 billion target, per a Bloomberg report. The firm closed its previous flagship fund in early 2018 on €7 billion, and its fund before that closed in 2012 on €6.7 billion. The report cited the pandemic as a major factor in BC's struggles, causing some LPs to focus on existing portfolios rather than new investments and forcing BC to mark down some investments, making its recent performance less appealing. BC's biggest deal of the year so far came in August, when it agreed to sell off a partial stake in CeramTec to Canada Pension Plan Investment Board at a reported €3.8 billion valuation.
• Francisco Partners signed on to make an investment in Paradigm, a creator of software for the legal industry, with Reuters reporting the firm will purchase a majority stake from Alpine Investors at a valuation of $400 million. Formerly known as ASG LegalTech, Paradigm was launched as part of ASG, an incubator for software-as-a-service companies that's backed by Alpine. The deal was announced yesterday, the same day Francisco Partners announced the close of a new $2.2 billion credit fund.
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