Allstate sells Group Health business to Nationwide in $1.25bn deal

BY Fraser Tennant

Seeking to expand its stop-loss insurance offering, US insurer Nationwide is to acquire the employer stop-loss segment of property and casualty insurer Allstate Corporation in a transaction valued at $1.25bn.

The acquisition is expected to further strengthen and diversify Nationwide Financial’s portfolio, expanding the company’s ability to sell stop-loss insurance to small businesses while laying the foundation for Nationwide to continue to add capabilities for significant growth in employer benefits.

A Fortune 100 company based in Columbus, Ohio, Nationwide is one of the largest and strongest diversified insurance and financial services organisations in the US. It provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance, public and private sector retirement plans, annuities and mutual funds.

“Acquiring Allstate's employer stop-loss segment will broaden Nationwide Financial’s portfolio, meeting the needs of small businesses, allowing us to serve more customers and positioning us as a leading provider in the stop-loss industry,” said John Carter, president and chief operating officer of Nationwide Financial. “This represents a significant investment in the stop-loss market, adding experienced talent with proven business results, protecting over 13,000 small businesses and complementing our existing offerings in the market while accelerating our opportunity for growth.”

Acquired in 2021 as part of the $4bn acquisition of National General, the sale of Allstate’s Group Health business is expected to generate a financial book gain of about $450m, increase deployable capital by $900m and reduce adjusted net income return on equity by 75 basis points after closing.

“We have reached another milestone in our strategy to maximise shareholder value by combining our health and benefits businesses with companies that have greater strategic alignment,” said Tom Wilson, chair, president and chief executive of Allstate. “Group Health provides stop-loss insurance to small businesses, which will gain access to Nationwide’s complementary product offerings.”

The transaction is subject to standard closing conditions, including regulatory approvals, and is expected to close in the second half of 2025.

“As Nationwide continues to focus on our mission to protect people, businesses and futures with extraordinary care, this acquisition is a strong fit,” concluded Kirt Walker, chief executive of Nationwide. “We are extending our protection solutions to meet the needs of business owners today and into the future.”

News: Nationwide to acquire Allstate's stop-loss insurance business in $1.25 billion deal

The Container Store exits Chapter 11

BY Fraser Tennant

Weeks after filing for Chapter 11 bankruptcy protection, US speciality retail chain The Container Store Group has successfully completed its financial restructuring process and emerged as a private company.

The company achieved the objectives it set for the bankruptcy and restructuring processes, including refinancing short-term debt, significantly reducing previous long-term debt obligations, accessing $40m in new financing, and modifying its asset-backed lending facility to add $40m in upsized capacity.

In addition, the company has continued to operate as usual, meeting its obligations to vendors, employees and customers throughout the bankruptcy process, and is now under the ownership of its supportive lenders, with a healthier balance sheet that positions the company for profitable growth.

The Texas-based company filed for Chapter 11 bankruptcy in December 2024 citing mounting debt and quarterly losses. According to court documents, the company was $243m in debt while having approximately $11.8m cash in hand.

The Container Store is among a number of retailers that have fallen into bankruptcy, including Party City and Joann, which filed its second bankruptcy earlier this week. Big Lots has also announced plans to close entirely.

“This is a new chapter in our journey as a healthier company well positioned to drive strategic growth initiatives forward,” said Satish Malhotra, chief executive and president of The Container Store. “With our restructuring process now behind us, we have renewed energy and excitement to deliver for our customers.

Founded in 1978, The Container Store is the only retailer in the US with a solution-oriented offering of custom spaces, organising solutions, and in-home services, designed to transform lives through the power of organisation.

With more than 100 locations nationwide and a flagship online store, the retailer offers an exclusive portfolio of custom space lines that can be designed for any area of the home, and more than 10,000 products to complete any space.

“We are focused on optimising our business, enhancing our portfolio of organising solutions and services, and continuously improving the customer experience,” concluded Mr Malhotra. “I am grateful to our employees and vendor partners for their dedication throughout this process, to our valued customers for their support, and to our new owners for their belief in our business.”

News: The Container Store emerges from Chapter 11 bankruptcy

Diversified Energy agrees $1.3bn Maverick deal

BY Richard Summerfield

In a deal focusing on expansion within the oil & gas rich Permian basin, Diversified Energy has agreed to acquire private equity-backed Maverick Natural Resources for $1.28bn, including debt.

According to a statement announcing the deal, Diversified Energy will take on about $700m of Maverick Natural Resources’ debt, giving the combined company a value of about $3.8bn, including debt.

The deal is expected to close during the first half of 2025, subject to customary closing conditions, including, among others, regulatory clearance and approval by Diversified shareholders for the issue and allotment of the ordinary shares pursuant to the agreement. The deal has been unanimously approved by the Diversified board.

Upon completion, Maverick’s current owner, investment firm EIG Global Energy Partners, will own about 20 percent of the new company. Following closure of the deal, Diversified’s board will consist of eight directors, six of whom are members of the current Diversified board, and two of whom will be designated by EIG.

“Today marks an important milestone for all of us at Maverick Natural Resources,” said Rick Gideon, chief executive of Maverick Natural Resources. “We have great respect for the innovative approach and stewardship demonstrated by the team at Diversified and are pleased to enter into this partnership. Maverick has built a strong foundation of execution and efficiency across our portfolio, and we look forward to combining our complementary portfolio of assets with Diversified. I would also like to express my gratitude to the team at Maverick for their hard work and dedication in supporting our strategic efforts and contributing to this achievement.”

“This acquisition expands our unique and highly focused energy production company with a complementary portfolio of attractive, high-quality assets,” said Rusty Hutson, Jr., chief executive of Diversified. “We have a proven track record of unlocking value from acquisitions while maintaining our commitment to sustainability leadership, and this acquisition provides us with great assets and employees that complement this strategy. The acquired producing assets have demonstrated leading well performance and are a natural fit with our operating advantage and existing acreage. Notably, the combined footprint in Oklahoma and the Western Anadarko Basin creates one of the largest in terms of production and acreage, which includes the emerging Cherokee formation.”

“We are extremely pleased to have entered into this acquisition and look forward to contributing as a core shareholder,” said Jeannie Powers, managing director and head of domestic traditional energy at EIG. “We aim to work closely with the Diversified management team and Board to support the Company’s focus on delivering long-term value. Diversified is uniquely positioned in the upstream space with a differentiated business model and a history of operational excellence. The combination of Maverick’s assets with Diversified’s existing footprint represents a strategic opportunity that we believe can support value creation for all stakeholders.”

News: Diversified Energy to buy energy producer Maverick in $1.3 bln deal

Thoma Bravo completes $3.6bn fund

BY Richard Summerfield

Software investment firm Thoma Bravo has announced the closure of its Credit Fund III, the firm’s largest credit fund to date, on $3.6bn, signalling a continuation of the strong private debt fundraising cycle that began in H2 2024.

The firm announced it had completed its capital raising efforts for Thoma Bravo Credit Fund III on Tuesday, marking its largest pool of credit capital to date. The fund, which exceeded its predecessor by $300m, will focus on investing in senior secured debt of enterprise software companies. The fund has already invested over $1bn across 20 investments.

“We appreciate our investors’ continued recognition and strong support of Thoma Bravo’s differentiated platform and strategy in credit, which is a testament to its growth and success,” said Orlando Bravo, a founder and managing partner at Thoma Bravo. “As an early adopter of private credit, Thoma Bravo has long recognized the crucial role private credit plays in enterprise software.”

“We are very proud of the strong backing we have received from our investors for our strategy and team, at a time of tremendous opportunity in software direct lending,” said Oliver Thym, a partner at Thoma Bravo who leads the Thoma Bravo Credit platform. “We are excited to have broadened our platform to include unlevered capital and funds-of-one/separately managed accounts. We look forward to capitalizing on the growing market demand for our flexible and differentiated credit solutions and driving further success for our partners and investors in 2025.”

The Thoma Bravo Credit platform focuses on the senior secured debt of established, mission-critical enterprise software companies. The platform targets sponsor-backed companies and leverages Thoma Bravo’s extensive sector experience in enterprise software, as well as its broad and differentiated sourcing channels. Since its inception in 2017, the platform has invested over $8bn across approximately 100 transactions.

Thoma Bravo is one of the largest software-focused investors in the world, with over $166bn in assets under management as of 30 September 2024 and has invested in more than 500 companies over the last 20 years, representing $265bn in enterprise value. Through its private equity, growth equity and credit strategies, the firm invests in growth-oriented, innovative companies operating in the software and technology sectors.

The closure of Credit Fund III is indicative of the current strength in the fundraising cycle that began in H2 2024. Though H1 2024 saw a slump in fundraising, the second half of the year saw a strong recovery. Through Q3 2024, private debt funds raised a total of $169.2bn, which, according to Pitchbook, put 2024’s fundraising efforts on track to slightly exceed 2023’s total of $226bn. Significant fund closings include Blackstone’s senior direct lending fund that closed on $22bn in October 2024 and Ares’ third direct lending vehicle that closed at $33.6bn in July 2024.

News: Thoma Bravo Completes Fundraising for Credit Fund III, Amassing $3.6 Billion in Total Available Capital for its Platform

Mondee files for Chapter 11 in pursuit of long-term growth

BY Fraser Tennant

In a move designed to position the company for long-term growth, air ticket consolidator Mondee Holdings has filed for Chapter 11 bankruptcy in order to facilitate a series of transactions contemplated under a restructuring support agreement (RSA).  

The transactions include a term sheet to sell substantially all of the assets of Mondee to a newly formed entity owned by, among others, affiliates of TCW Asset Management Company LLC and Wingspire Capital LLC.

Should the TCW bid be the successful one, following the closing of the sale, Prasad Gundumogula, co-founder, chairman of the board and previously chief executive, will have a 75 percent equity stake in, and serve as chief executive of, the newly formed entity.

While Mondee pursues a sale of the company to the current bidder or another party with a higher or better offer, its existing secured lenders will continue to provide support throughout the Chapter 11 proceeding by committing to an additional $27.5m financing for operating capital, in addition to the $21.5m of financing recently made available.

Throughout the court-supervised process, Mondee will operate its business as usual and will continue to support its customers and partners without disruption. The Chapter 11 proceedings do not impact Mondee entities in Brazil, Mexico, India and Canada.

“Today’s announcement marks an important step forward for Mondee, our valued customers, partners and our dedicated team as we continue to transform our business for the future,” said Jesus Portillo, chief executive of Mondee. “With a sustainable capital structure and a structured sales process, we will be well-equipped to enhance our leadership in the travel market.”

Additionally, Mondee is in the process of filing first day motions with the bankruptcy court. The relief requested will ensure a smooth transition into Chapter 11 and the ability to maintain normal operations, including Mondee’s commitments to customers and partners and the payment of employee wages and benefits.

Established in 2011 and operating 21 offices globally, Mondee drives change in the leisure and corporate travel sectors through its broad array of innovative solutions. Available both as an app and through the web, the company’s platform processes over 50 million daily searches and generates a substantial transactional volume annually.

Mondee is looking to move expeditiously through the bankruptcy process and emerge from Chapter 11 in the beginning of the second quarter of 2025.

Mr Portillo concluded: “We have taken decisive action to overcome past challenges and are encouraged by employee engagement, organisational culture, and our ability to deliver best-in-class products and services.”

News: Mondee files for bankruptcy in the US