GA runs potential multi-billion dollar secondary on four assets

The process is one of the largest in the market, rivaling that of New Mountain Capital, which is moving five assets out of its 2007 fund in what could be a $2bn or more transaction.

General Atlantic is running a strip-sale-like secondary on four assets that it will transfer into a continuation vehicle for more time to manage the investments, three sources told Buyouts.

The process is one of the largest in the market, rivaling that of New Mountain Capital, which is moving five assets out of its 2007 fund in what could be a $2 billion or more transaction. While the secondaries market seized up for a period of time last year, the second half saw an explosion in transactional activity, which has continued so far this year.

GA is running the process, with Evercore working as secondaries advisor, on four investments: Argus Media; Red Ventures; Sanfer; and Hyperion Insurance Group.

Net asset value of the deal could total $2.5 billion or more, one of the sources said. Five to eight bidders are expected to participate, the source said. The GP is expected to roll its exposure in the assets into the continuation pool, one of the sources said.

The assets are held in various GA pools, including in its evergreen fund, sources said.

Investors with exposure to the four assets have the option to roll their interests into the continuation pool, or sell their stakes, one of the sources said. Pricing is at par, though that could increase: “Par is the floor price; could be higher,” one source said. The reference date at which the price was set is not clear.

GA, led by CEO and chairman William Ford, bought a majority stake in Argus Media in 2016 in a deal that valued the oil price reporting service at £1 billion, Reuters reported at the time. The firm invested in Red Ventures, an online marketing services business, in 2010; GA invested in Sanfer, a pharmaceutical company headquartered in Mexico, in 2014; and in Hyperion Insurance in 2013.

A GA spokesperson declined to comment.

Large deals have proceeded through the secondaries market at a brisk pace since the second half of 2020. Along with GA and New Mountain, other big deals include Leonard Green, which is moving assets out of its 2007 fund and into a continuation pool; and Kohlberg & Co., which is running a secondary on its 2012 fund.

Overall, total deal volume in 2020 was estimated around $60 billion, versus a record high of $80 billion in 2019, according to Evercore’s full-year volume report. GP-led deals represented about 53 percent of the total deal volume last year (or around $32 billion), Evercore estimated.

Adam Le contributed to this report.