Post 1: Deal Tracker
This is the first post in a series which explores my favourite recent deals in the M&A/PE space!
TMT - This deal is of particular interest due to it involving my home country of Ireland. Since I can remember large MNC’s have occupied Ireland as a safe-haven from large tax bills and a highly-educated workforce, with Intel being one of the largest to situate here in Ireland. It was two years ago that Intel decided to sell a stake to Apollo Global Management to help fix up its finances. Since they sold their 49%
stake they have excelled with backing from the world’s largest company, Nvidia, and SoftBank, not to mention a US government stake which has seen their stock double.
These fortunes have stabilised a long-time static company and bolstered their ability to take full ownership of their semiconductor plant in Ireland from Apollo for $14 Billion., representing a shrewd return for Apollo. The deal involves Intel raising $6.5 Billion in debt to fund the deal and comes at an important crossroad in Intel’s “advanced manufacturing roadmap” where they aim to accelerate the production of next-gen chip technology. Goldman Sachs acted as an exclusive financial advisor to Intel.
Energy - The Energy deal that caught my attention this week was the Clearlake Capital agreement to acquire pure-play power solutions company Qualus. This deal represents a strategic move to build Clearlake’s profile in grid infrastructure and power services. It demonstrates Clearlake’s long-term optimism in electrification trends and increasing demand for resilient energy infrastructure over the coming decades. The key drivers that are already starting to show, AI Data Centres, EV adoption, integration of renewable sources and onshoring of industrial capacity all create a more intense strain on the existing grids.
Who are Qualus? They are a pure-play power solutions firm at the forefront of power infrastructure transformation, with differentiated capabilities across grid modernisation, resiliency, security, and sustainability. They partner with utilities, commercial, industrial, data centre and renewable and energy storage developers, offering flexible and reliable solutions through boutique and integrated advisory, planning, engineering and specialised field services. They have recently been sold by New Mountain who are a $60 Billion firm that purchased Qualus in 2021.
The ‘Why Qualus?’ question boasts an obvious answer after brief research. It isn’t a generalist engineering firm but rather a fully fledged grid infrastructure company, which entails existing client relationships, pricing power, and a defensible moat relative to multi-sector competition. To add to this, their customer base is blue-chip - the primary investor-owned utilities alongside commercial and industrial organisations, which directly translates to long-cycle revenue with less churn risk. Utilities will rarely swap their specialist engineering partners regularly.
This leads us to the ‘Why Now?’ A previous investment firm New Mountain held Qualus for approx. 5 years, which scaled the business through this period making it large enough for Clearlake to take-over. New Mountain have built up the company and platform and their exit clears the perfect time and pathway for the next phase of scale with larger financial and operational investment in their existing infrastructure.
