Good morning, {{first_name}}! Today we're covering what drives value in PE add-on acquisitions, AI's evolution from experimentation to dealmaking infrastructure, the looming $300B private equity debt wall, and Bain Capital's decision to stay invested in Surgery Partners' $5.7B buyout.

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MICROSURVEY

Private equity firms agree on the value of add on acquisitions. What they cannot agree on is where that value should come from.

According to our latest PE150 survey of 90 respondents, 36% prioritize revenue growth and market expansion, narrowly ahead of 33% targeting multiple expansion at exit and 31% focused on cost synergies and operational efficiency.

The near even split reveals three competing approaches to value creation. Some sponsors are buying scale to accelerate growth, others are betting that larger platforms will command higher exit valuations, while the rest are focused on extracting more profitability from existing operations.

The interesting part? Nearly two thirds of respondents prioritize either multiple expansion or operational efficiencies over revenue growth. That suggests add on strategies are as much about improving the economics of an eventual exit as expanding the business itself.

Bottom line: Buying more businesses is the easy part. Turning those acquisitions into higher EBITDA, stronger margins, and a premium exit multiple is where the real value gets created. (More)

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EDITORIAL CONTENT BROUGHT TO YOU BY DATASITE

AI is already proving its value in dealmaking. 57% of GenAI users report better deal insights, while 40% say it is accelerating deal cycles—often by 30% to 50%. But the next competitive advantage won’t come from simply giving every associate an AI tool.

It will come from making those gains repeatable.

That transition is proving harder than expected. 59% of dealmakers say their current M&A tools require significant manual validation, 57% cite poor integration, and 29% struggle to scale tools beyond specific use cases.

The implication for PE and M&A firms is straightforward: AI is moving from a productivity question to an operating-model question. Proprietary data, standardized workflows, governance and human judgment could become more defensible advantages than access to the models themselves.

The first AI race was about adoption. The next one is about institutionalization.

Continue reading: From AI Experimentation to the New Deal Team. Explore how firms can move from individual AI use cases to scalable dealmaking workflows.

Go deeper: Explore Datasite’s The New Deal Team: Perspectives on AI-Driven M&A for a closer look at how AI could reshape the M&A process.

Join Datasite as the M&A Technology Partner of the AI Data & Insight Private Capital Breakfast in London, an invitation-only gathering at London's May Fair Hotel.

HEADLINE OF THE WEEK

Private equity firms face a $300 billion debt maturity wall in 2028–2029, with roughly $140 billion coming due in 2028 and another $160 billion in 2029, according to The Wall Street Journal.

The pressure is particularly acute in software, which accounts for approximately one-third of the risky loans approaching maturity. Higher borrowing costs are making refinancing more expensive, while AI disruption is threatening the growth assumptions underlying many software buyouts. Sponsors are already negotiating extensions to avoid distressed restructurings and potential defaults.

So What? For private equity, the approaching debt wall threatens portfolio valuations, exit proceeds, and LP distributions, potentially forcing sponsors to inject fresh equity, extend holding periods, or accept lower returns. (More)

DEAL OF THE WEEK

HealthSpan Partners, an affiliate of Bon Secours Mercy Health, is taking Surgery Partners private in a $5.7B deal, offering shareholders $23.50 per share in cash. But the real story is who isn’t cashing out.

Bain Capital, Surgery Partners’ largest shareholder with a 39% stake, is rolling over its equity rather than exiting, retaining significant ownership alongside HealthSpan. The transaction gives HealthSpan a national outpatient surgery platform spanning 200+ locations, 30 states, and 5,000 affiliated physicians, positioning it to capitalize on the shift from traditional hospitals toward lower cost surgical settings.

For Bain, the rollover preserves exposure to a growing healthcare segment without requiring another full buyout. For HealthSpan, it provides immediate scale, physician relationships, and geographic reach that would take years to replicate organically.

Why it matters: This is a reminder that liquidity doesn’t always require a clean exit. Strategic buyers can provide capital and operational scale while PE sponsors retain upside. With closing expected in Q1 2027, Bain is betting the next chapter of value creation is worth staying for. (More)

IMPORTANT DEALS THIS WEEK

LSEG → Octus | $3.5B
LSEG agreed to acquire Permira-backed Octus, a credit-intelligence platform spanning public and private credit. Read more

Tradeweb → Trumid | ~$2B
Tradeweb agreed to acquire Trumid, expanding its fixed-income trading platform across the full credit lifecycle. Read more

Goldman Sachs Alternatives → Celnor Group | Undisclosed
Goldman agreed to acquire a majority stake in Inflexion-backed Celnor, a UK testing, inspection and compliance platform. Read more

Truelink Capital → Johnson Controls' Intrusion Business | Undisclosed
Truelink agreed to carve out Johnson Controls' global intrusion products business, adding a security-hardware franchise to its portfolio. Read more

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