A GP-led deal set in motion by a minority stake sale in 2021 is edging its way to completion.
Glendower Capital is lined up to lead a $400 million single-asset process on LINQ, a software company geared towards the education sector, according to four sources familiar with the matter.
LINQ is managed by Banneker Partners, a San Francisco-based buyout shop led by co-founder of Vista Equity Partners Stephen Davis. The deal is still out for syndication with PJT Partners advising on the process, Secondaries Investor understands.
The continuation fund was going to be priced off the sale of a minority stake in LINQ to Welsh, Carson, Anderson & Stowe, which closed in the fourth quarter, Secondaries Investor has learned. The secondary component was renegotiated downward due to deteriorating market sentiment.
LINQ was acquired on a deal-by-deal basis in 2018, prior to Banneker raising its debut fund, according to affiliate title Buyouts, which first reported on the process. Banneker Partners Fund I closed in March on its $350 million hard-cap.
LINQ began by providing software to help schools comply with government regulations around nutrition, said one source who has seen the deal. The company has made at least 10 add-on acquisitions under Banneker’s ownership, expanding into areas such as accounting and payments related to the education sector.
Secondaries Investor is aware of at least one other deal that was priced off a liquidity event in Q4, and which is now being renegotiated in line with declining public stocks and the acceptance that it will be a difficult year for liquidity events.
“We’ve spoken to five or six founders that are interested in taking beta off the table,” said one lower-mid-market buyer with a GP-led focus. “Initially no-one wanted to take a discount, by week four maybe they’d accept a small one and then by the eighth week [a deal could get done].”
Glendower is in market with Fund V, its second vehicle since spinning out of Deutsche Bank in 2017. The fund is likely to close on its hard-cap of $4.5 billion, Secondaries Investor reported in February.
Banneker and Glendower did not respond to requests for comment. PJT declined to comment.