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TPG prepares to close out CAA single-asset process shelved in the pandemic

Other single-asset deals that have been in the market this year include GI Partners’ MRI Software, Clearlake Capital’s DigiCert and Novacap’s Syntax Systems.

After shelving a process to extend its hold over talent agency CAA in the pandemic last year, TPG’s single-asset deal for the company is heading for an imminent close, sources told Buyouts.

TPG revived the process earlier this year, which would move CAA out of its sixth fund and into a continuation pool. The deal is through the election period, which is when existing LPs decide whether to cash out of their interest in the company or reinvest in the asset through the continuation fund.

CAA is one of numerous single-asset deals being run by GPs who want more time and capital to grow what they consider high-quality investments. Other single-asset deals that have been in the market this year include GI Partners’ MRI Software, Clearlake Capital’s DigiCert and Novacap’s Syntax Systems.

Goldman Sachs is leading the deal, sources said, with ICG and Neuberger Berman also investing. The deal includes a consortium of smaller investors as well, sources said. Goldman also led the previous iteration of the deal last year before it was paused.

The deal’s total value is in the range of $1 billion to $1.3 billion, sources said. The deal will boost TPG’s ownership stake in the company slightly. TPG first invested in CAA in 2010, and boosted its stake above a majority hold in 2014.

A TPG spokesperson declined to comment.

CAA, formed in 1975, has represented heavy-hitting celebrities and sports stars including Beyoncé, George Clooney and Derek Jeter.

TPG Partners VI raised $18.87 billion against a target of $18 billion by final close in 2008, according to Buyouts data. Investors who backed the fund include the California Public Employees’ Retirement System, which committed $825 million, Canada Pension Plan Investment Board, which committed $750 million and New Jersey Division of Investment, which committed $360 million.

The fund was generating a net internal rate of return of 9.6 percent and a 1.5x multiple as of September 30, according to performance information from California Public Employees’ Retirement System.

This is at least the third GP-led process TPG has embarked upon. In late 2018, limited partners in the 2008-vintage TPG Asia V and the 2013-vintage TPG Asia VI were given the option to sell their stakes to a syndicate of buyers led by Lexington Partners, Buyouts reported.

In July 2020, affiliate title Secondaries Investor reported that CPPIB was set to back a tender offer on TPG’s second growth fund.

Secondaries volume, which came in around $60 billion last year, is expected to recover its momentum this year as markets emerge from the pandemic. GP-led deals, like single-asset processes and direct secondaries represented about 43 percent of total volume last year, according to Campbell Lutyens’ full-year 2020 secondaries report.

Of that GP-led total, single-asset deals represented about 35 percent of volume, the report said. “Single asset secondaries experienced the strongest year-over-year growth of any GP-led transaction,” the report said.