Tuesday, March 24, 2020

Plasma Treatment PEU Style: New York and The Carlyle Group

Bloomberg reported cash rich private equity firms are waiting for blood to deepen in the streets before putting cash to work.  In reality they are likely scrambling to hold leveraged affiliates together as business evaporates.  Maxed out balance sheets provide little flexibility when markets turn upside down.  "Sponsors" hate putting good money after bad when capital calls become the order of the day.  Yet just prior to the ongoing carnage one private equity underwriter (PEU) announced a deal.

The Carlyle Group's press release on 2-20-2020 stated:

Global investment firm The Carlyle Group (NASDAQ: CG) today announced it has made a significant investment in MAK-SYSTEM (MAK), a family-owned company providing software for blood management solutions.

MAK is a leading provider of state-of-the-art software solutions supporting the entire blood chain management process, from donation through to transfusion. MAK currently operates on all continents and is considered a preeminent blood management software expert. The company has a strong track record of business success and has built long-term relationships with an established group of blue-chip clients and partners.
The investment will provide MAK with additional capital to support the company’s global growth strategy and to continue innovating and delivering standards of excellence for the blood service, plasma collector and hospital markets.
 NBC News reported:

Hoping to stem the toll of the state’s surging coronavirus outbreak, New York health officials plan to begin collecting plasma from people who have recovered and injecting the antibody-rich fluid into patients still fighting the virus.
New York State plans to conduct a clinical trial using plasma to fight the virus.  PEUReport first noted Carlyle's investment in MAK Systems on 3-5-20.  The U.S. has changed dramatically since that date.   Carlyle's ability to read the tea leaves remains intact.  MAK Systems should provide the PEU grand returns.  

Update 3-25-20:  Leon Black's Apollo Global found enough blood to put money to work.  The PEU is buying discounted debt of its own affiliates.  The credit team is getting coaching from the private equity team.  This is OK as there are no rules or referees left.  Seeking Alpha reported on the many strategies the PEU boys are undertaking now that enough blood is in the streets.

Update 3-26-20:  Reuters suggested salivating PEUs will go on a buying spree in Q2.  NBC reported plasma treatment for coronavirus received FDA approval on Tuesday.  The FDA specified criteria for plasma donors and recipients.  MAK Systems could be a Beats in the making.  Short hold, massive PEU profits.

Update 3-29-20:  President Trump spoke of clinical studies to treat the coronavirus in today's press conference.  He spoke of blood plasma and its potential to save lives.  He did not share its potential give The Carlyle Group another huge payday.

Update 4-7-20:  Chinese medical studies show the benefit of convalescent plasma on seriously ill coronavirus patients. 

Update 4-8-20:  The FDA approved Johns Hopkins' use of convalescent plasma therapy for COVID-19 patients.