Private Equity Deals with Capital Allocators

Latest Episodes:

TaylorMade – David Shapiro (KPS), (S2.EP.03) Mar 15, 2023

Show notes

David Shapiro is a co-founder of KPS Capital, a three-decade old private equity firm that manages in excess of $14 billion with a focus on acquiring and improving manufacturing-based businesses. TaylorMade is one of the leading manufacturers of golf equipment, and a familiar brand to golfers and fans of the game. Our conversation covers the history of TaylorMade, desired spin-off of the business from Adidas, prolonged and broken deal process, and KPS’ winning the deal. We then turn to the steps KPS took to improve the business across its supply chain, product cycle, and marketing, and its decision to sell the business in 2021 after a complete turnaround.

Thanks to our Season 2 Sponsor - Canoe Intelligence. Learn more about Canoe and how it's technology is powering the future of alternative investments.

For full show notes, visit the episode webpage here.

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Blue Triton Brands – Scott Spielvogel (One Rock Capital), (S2.EP.02) Mar 01, 2023

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Scott Spielvogel is a co-founder and Managing Partner of One Rock Capital, a private equity firm managing $5 billion that specializes in ugly, hairy, messy situations.

Blue Triton Brands is the business that formerly comprised Nestle Water North America, which collectively have the top market share in North American bottled water. Its brands include Poland Spring, Deer Park, Arrowhead, Pure Life, Origin, and a host of other specialty brands. One Rock carved out the business from Nestle in 2021.

Our conversation covers a history of bottled water, attractiveness and risks of the opportunity, and a deal process that started with the banker telling One Rock they were too small to participate. We turn to deal pricing, operational efficiencies upon ownership, reinvigorating brands, new initiatives, and early performance.

Thanks to our Season 2 Sponsor - Canoe Intelligence. Learn more about Canoe and how its technology is powering the future of alternative investments.

For full show notes, visit the episode webpage here.

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Fenway Sports Group – Ian Charles (Arctos) and Sam Kennedy (FSG), (S2.EP.01) Feb 15, 2023

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Ian Charles and Sam Kennedy discuss Fenway Sports Group.

Ian Charles is the founder and Managing Partner of Arctos Sports Partners, a private equity platform dedicated to the professional sports industry and sports franchise owners. He was a previous guest on Capital Allocators alongside his co-founder Doc O’Connor, and that conversation is replayed in the feed.

Sam Kennedy is the longtime President and CEO of Arctos portfolio company, Fenway Sports Group.

FSG is a twenty-year old global sports, marketing, media, entertainment and real estate portfolio that has taken cherished and iconic sports clubs to new heights. The business includes ownership of the Boston Red Sox, Liverpool Football Club, and Pittsburgh Penguins, and a series of related real estate and media assets.

Our conversation covers the Fenway Sports Group holdings, business drivers, and attractiveness as an investment. We discuss Arctos’ sourcing, underwriting, and perceived risks of the deal, and then turn to Sam’s operating strategy, tuck-in acquisition of the Pittsburgh Penguins, importance of fielding winning teams, impact of private institutional capital, capital structure, on-field product, and future plans.

Long-time listeners likely know about my affinity for sports, so it is a great privilege to share this discussion of Arctos’ investment in FSG with you, and a special bonus to have Sam walking through how it works.

Thanks to our Season 2 Sponsor - Canoe Intelligence. Learn more about Canoe and how it's technology is powering the future of alternative investments.

For full show notes, visit the episode webpage here.

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[REPLAY] Ian Charles & Doc O’Connor – Investing in Sports Teams at Arctos Sports Partners (Capital Allocators, EP.225) Feb 15, 2023

Show notes

Ian Charles and Doc O’Connor are the Co-Founders and Managing Partners of Arctos Sports Partners, a private equity firm dedicated to buying minority stakes in professional sports franchises. From its founding just two years ago, Arctos quickly has become the market leader in the space, raising a $2.1 billion first-time fund and a SPAC alongside Executive-in-Residence Theo Epstein, and buying stakes in MLB teams including the Boston Red Sox, the Golden State Warriors and Sacramento Kings in the NBA, and a compliment of other sports assets.

Our conversation covers their backgrounds and the formation of Arctos, the investment opportunity in sports franchises, and the underlying business and ownership structure. We then turn to the unique characteristics look of the asset, investment process, and growth strategy.

Full disclosure, I am a personal investor in Arctos’ fund and am a fan of their strategy and team, pun intended. I hope you’ll enjoy this conversation with Doc O’Connor and Ian Charles as much as I did.

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CD&R, Ravi Sachdev and Ron Williams – Scaled Growth Equity at agilon health (S1.EP.08) Dec 21, 2022

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Ravi Sachdev is a Partner and Ron Williams is an Operating Advisor at Clayton Dubilier & Rice, a global private equity firm with $57 billion in assets under management that was founded in 1978. agilon health is a company CD&R created from the purchase of two businesses in 2016 and grew using aspects of buyout, venture capital, and growth equity investment strategies. The business assists primary care physicians transition from a traditional “fee for service” model to an outcomes “value-based” model, where incentives are aligned across patients, payers, and providers.

Our conversation covers the founding of agilon, its economics, and CD&R’s entry in the business. We turn to agilon’s start as a novel business concept alongside established traditional capabilities, driving operational change, expanding the model, and preparing the company to go public. We close by discussing the potential to leverage this model across other opportunities in the space.

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Advent International, Tricia Glynn - A Beautiful Carveout at Orveon (S1.EP.07) Dec 07, 2022

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Tricia Glynn is a Managing Director at Advent International, the global private equity firm that oversees nearly $100 billion in assets. Orveon Global is a collective of beauty brands specializing in the future of the face. Advent carved out three brands from Shiseido Americas to form Orveon in 2021.

Our conversation covers the beauty business and the complex dynamics of a carveout transaction, including sourcing, due diligence, and preparing to hit the ground running with a new executive team and a transition plan for the newly independent business. We then turn to Advent's plan to reinvigorate the brands, improve operations, and add value through M&A. We close with challenges in the current environment, lessons learned from the deal, and a roadmap for the years ahead.

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Bain Capital, David Humphrey and Devin O’Reilly – Partnering, Merging, and Growing at Zelis (S1, EP.6) Nov 23, 2022

Show notes

Dave is the Co-Head of Bain Capital’s North America Private Equity business and a Managing Director in the TMT vertical. Devin is the Head of the firm’s North America Healthcare vertical. Bain Capital manages $180 billion, about half of which is in private equity. Its CEO, John Connaughton, was a past guest on Capital Allocators and that conversation is replayed in the feed.

Zelis is a healthcare and financial technology company that addresses the most abrasive aspects of the healthcare system. It offers solutions for payers, providers, and consumers to reduce friction in the process of pricing, explaining, and paying for healthcare claims.

Our conversation covers Bain Capital’s consulting roots, the healthcare technology opportunity, collaboration with co-investors and management teams, and winning the deal. We discuss their ownership of Zelis, including merging two businesses, capital structure, tuck-in acquisitions, management, and potential exit strategies.

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[REPLAY] - Private Equity Masters 2: John Connaughton – Bain Capital (Capital Allocators, EP.201) Nov 23, 2022

Show notes

John Connaughton is a Co-Managing Partner at Bain Capital, a leading global private investment firm that oversees approximately $130 billion in assets. Founded in 1984 as the pioneer of a consulting-based approach to private equity investing, Bain Capital today invests across private equity, credit, public equity, venture capital and real estate. Our conversation covers the early years of private equity at Bain Capital, its growth in products and assets, investment process, competitive environment, culture, and succession planning. We close with JC’s insights for allocators and his outlook on private equity.

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EQT, Arvindh Kumar - Transformation and Carve Outs at Innovyze (S1, EP.5) Nov 09, 2022

Show notes

Arvindh Kumar is a Partner and Global Co-Head of Technology at EQT, a public company overseeing nearly $100 billion in assets across infrastructure, real estate, and all stages of private equity.

Innovyze is a mid-market vertical software company that provides smart water infrastructure to utilities and engineering firms. EQT carved out two subscale, non-core businesses from public companies to form Innovyze in 2016.

Our conversation covers the Innovyze business and the water infrastructure market. We discuss the sourcing, diligence, and deal dynamics of the complex merger. We then turn to integrating the two businesses, including a management team change, systems integration, product rationalization, and sales reorganization. We close with EQT's process for selling the business to Autodesk and decision to refocus from the middle market to its flagship strategy despite its success in the space.

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Berkshire Partners, Kevin Callaghan and Larry Hamelsky – Culture and Compounding at Parts Town (S1, EP.04) Oct 26, 2022

Show notes

Kevin Callaghan and Larry Hamelsky are Managing Directors and long-time team members at Berkshire Partners, a 35-year old private equity firm managing over $20 billion in middle market deals and public equity. Kevin is a member of the Industrials and Consumer teams and Larry is a member of the Industrials and Communications teams at Berkshire.

Parts Town is a distributor of OEM repair and maintenance parts for the foodservice industry. The tech-enabled company provides 150,000 different after-market replacement parts to manufacturers of commercial kitchen appliances. Berkshire bought the business from Summit Partners in 2016 and transitioned ownership to a different Berkshire fund, continuation fund, and outside sponsor in 2021.

We discuss the business, finding and landing the deal, working with management, conducting tuck-in acquisitions, and recapping the business for another chapter of growth.

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