Private equity platform investments in Software-as-a-Service companies increased significantly in 2020YTD as a percentage of all PE deals. Many SaaS companies have been less negatively impacted by the economic impacts of the coronavirus compared to other industries, both in terms of continued demand for their product or service as well as the agility to continuing operations, working from home. In many cases, SaaS companies have benefitted by the sudden change in industry dynamics.

The trending private equity investment sectors for June 2020 are highlighted below with a few example transactions.

The trending private equity investment sectors for May 2020 are highlighted below with a few example transactions.

Private equity platform investments in technology companies increased significantly in 2020YTD as a percentage of all PE deals. This is likely an influence of Covid-19, as private equity firms continued to close new investments in technology companies compared to the collective “pause” the PE firms placed on other industries.

Private equity investments in the healthcare sector, as a percentage of total PE platform transactions, have effectively doubled over the last 20 years.

Historically, manufacturing was the predominant industry of interest for private equity acquisitions. However, as PE firms increasingly looked for more scalable companies with lower CapEx requirements, over time, manufacturing acquisitions declined as a percentage of the total private equity investments.

Private equity firms currently hold more than 40 portfolio companies in the battery industry. These investments range from…

…Battery Manufacturers:

Lionano (Woburn, MA) manufactures proprietary cathode materials that improve energy density, cost, durability and safety of lithium ion batteries. The company’s other division develops solid state batteries.

September 2018 – Lionano completed a $22 million Series B financing round led by WAVE Equity Partners, Helios Capital Ventures and NXT Ventures.

EaglePicher Technologies (St. Louis, MO) develops specialized batteries and advanced power management systems for defense, aerospace and medical applications.

March 2018 – Vectra Co., a portfolio company owned by certain investment funds managed by affiliates of Apollo Global Management, LLC (NYSE: APO), completed the sale of its EaglePicher Technologies business to affiliates of GTCR LLC.

…to Battery Distributors:

The median holding period for private equity portfolio companies is currently 4.8 years, as reported in our recently updated portfolio company holding periods study.

Given this, it is reasonable to assume that portfolio companies held five years or longer might be good candidates/prospects for an exit.

Our M&A Research Database currently shows 218 portfolio companies that will reach the 5-year holding period milestone in the month of June, 2020. A few sample companies are presented below.

The trending private equity investment sectors for April 2020 are highlighted below with a few example transactions.

I periodically update the private equity portfolio company holding periods to track this trend over time. I thought this would be a good time to append another data point to the graph, just before this metric is impacted by the COVID-19 economy.

2020 YTD Median Holding Period = 4.8 years