Sphera Switches Sponsors at $1.4B Valuation
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Sphera Switches Sponsors at $1.4B Valuation

Equity for buy comes from Blackstone Capital Partners VIII LP

SOURCE: Sphera

Blackstone has agreed to acquire Sphera, a provider of environmental, social and governance (ESG) software, data, and consulting services, from Genstar Capital.

The buy of Sphera from Genstar values the business at $1.4 billion. Blackstone will fund the equity portion of the acquisition from Blackstone Capital Partners VIII LP which closed in September 2019 with $26 billion of capital.

Sphera’s SaaS products are used by more than 3,000 customers in just over 100 countries to manage and mitigate risks in the areas of environment, health, safety, and sustainability. Sphera is led by CEO Paul Marushka and is headquartered in Chicago.

Genstar acquired Sphera in June 2016 through the carve-out of the Operational Excellence & Risk Management business of publicly traded IHS (NYSE: IHS). The business was rebranded as Sphera in September 2016. Sphera’s add-on acquisitions since Genstar’s buy include Rivo Software, sparesFinder, Petrotechnics, SiteHawk and thinkstep.

“In 2016, Genstar partnered with Paul Marushka to build a leading software platform in ESG and operational risk management,” said Geoff Miller, a director at Genstar. “We have been thrilled with the leadership position Paul and his team established after the initial acquisition of Sphera. The company has made significant investments in the business, expanded the company’s geographic and end-market reach, and executed several key acquisitions to expand the company’s portfolio of cloud-based applications.”

“The increasing importance of environmental, social, governance issues to businesses globally is a key thematic investing focus for Blackstone,” said Eli Nagler, a senior managing director at Blackstone. “Sphera has established itself as a market leader in the ESG software and solutions space, and we’re excited to partner with Paul and this best-in-class management team to continue to accelerate their impressive growth trajectory.”

“Sphera has built world-class technology and is exceptionally well-positioned in the fast-growing ESG sector,” said Martin Brand, the head of North American private equity at Blackstone and its global co-head of technology investing. “We are looking forward to helping Paul and his team accelerate Sphera’s further expansion.”

New York City-based Blackstone (NYSE: BX) invests in private equity, real estate, public debt and equity, non-investment grade credit, real assets, and secondary funds. The firm also provides financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory, and fund placement services.

San Francisco-based Genstar invests from $50 million to $400 million in middle-market companies that have enterprise values from $50 million to $1 billion and EBITDAs greater than $15 million. The firm targets investments in the financial services, software, industrial technology, and healthcare industries.

In April 2021, Genstar held a hard cap closing of Genstar Capital Partners X LP with $10.2 billion in capital commitments. In addition to Fund X, Genstar also closed Genstar Opportunities Fund X LP, a $1.5 billion overage fund that will co-invest in Fund X’s larger transactions.

Evercore was the financial advisor to Genstar on the sale of Sphera.

© 2021 Private Equity Professional | July 7, 2021

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