S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.

Healthcare is taking a turn in the sector risk spotlight, ending an extended run by the consumer discretionary sector, at least temporarily.

S&P Global Market Intelligence scans the US public sector for signs of risk each quarter, analyzing investor sentiment, the latest updates to corporate guidance and the output of a model that estimates credit risk across the spectrum of listed companies. Those signals do not often point in the same direction, but the consumer discretionary sector has been a frequent risk leader since 2023.

That changed in the second quarter. The healthcare sector recorded a significant quarter-over-quarter increase in probability of default. A steady rise in bearish sentiment among the sector's investors also brought healthcare into second place behind consumer discretionary on sector-by-sector rankings of the percentage of shares sold short out of all outstanding shares.

That could signal a buying opportunity for private equity. Rising risk tends to pull down valuations, potentially creating lower-cost entry points for private equity fund managers, but the companies have to prove they can manage debt and grow.

Read more about the emerging signs of healthcare sector risk in the second quarter.

CHART OF THE WEEK: Slower private equity dealmaking in the pet sector

⮞ Private equity dealmaking in the pet sector got off to a slow start in 2024, with the $43.5 million in announced transaction value in the second quarter through June 18 representing an 81% decline compared to the same period in 2023, according to S&P Global Market Intelligence data.

⮞ The cooling off followed a surge of private equity investment in pet sector businesses in 2023, when private equity-backed dealmaking reached $2.89 billion, its highest mark in at least four years.

⮞ That was largely due to one mastiff-sized deal announced in November 2023: Blackstone Inc.'s $2.3 billion acquisition of online pet care marketplace Rover Group Inc. The deal closed earlier this year in February.

TOP DEALS AND FUNDRAISING

– EQT Private Capital Asia's Baring Private Equity Asia Fund VIII agreed to buy Keywords Studios PLC in a deal valuing the London-based video game services provider at about £2.2 billion.

– Wendel agreed to buy an approximately 50% stake in Spanish education company Globeducate from Providence Equity Partners LLC for about €625 million. The transaction is expected to close in the second half of 2024.

– New Mountain Capital LLC raised $15.4 billion at the close of its New Mountain Partners VII fund and related vehicles. It is the firm's seventh fund focusing on making control and control-oriented investments.

– Lone Star Americas Acquisitions Inc., commonly known as Lone Star Funds, held the final close for Lone Star Fund XII LP with about $5.3 billion in total capital.

– Ardian secured $3.2 billion for Ardian Co-Investment Fund VI SLP. The vehicle is already about 40% invested across 18 transactions.

– Lee Equity Partners LLC pulled in about $1.3 billion for Lee Equity Partners Fund IV LP. The fund invests in middle-market financial and healthcare services companies.

MIDDLE-MARKET HIGHLIGHTS

– Inflexion Private Equity Partners LLP agreed to sell its stake in London-based data services and technology company Independent Transition Management Ltd. to Lumera.

– Blackford Capital Associates II Inc. acquired Industrial Molding Corp., maker of injection molded plastic products, from NN Inc. Industrial Molding marks the first add-on acquisition for Davalor Mold, Blackford's portfolio company.

– Aurora Capital Partners added litigation support services provider First Legal Deposition Services LLC to its portfolio.

– Good Springs Capital LP closed on an investment in Kimbel Mechanical Systems Inc., a mechanical contractor.

FOCUS ON: CONSTRUCTION AND ENGINEERING

– Mutares SE & Co. KGaA is set to buy Swedish general contractor Serneke Sverige AB in a deal with seller Serneke Group AB.

– Brightstar Capital Partners LP agreed to buy engineering, architecture and consulting firm Stratus Team LLC from Godspeed Capital Management LP.

– Portobello Capital Gestión SGEIC SA purchased a 24.78% stake in Madrid-based infrastructure services provider Serveo Servicios SAU from Ferrovial SE.

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For further private equity deals, read our latest In Play report, which looks at potential private equity-backed M&A, including rumored transactions, each week.

For private credit news, see our latest private credit newsletter issued twice per month.