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Behind the Buyouts: Vestar's Bhat on Continuation Funds, Bilateral Recaps

Published: May 28th, 2024
Vestar's co-head of investments Nikhil Bhat discusses the firm's $1.2 billion continuation vehicle for Circana, its use of bilateral recaps and interest in route-based facility services.

On the latest episode of Behind the Buyouts, Vestar Capital Partners Inc.’s co-head of investments Nikhil Bhat dives into the the rise of continuation vehicles, the firm’s interest in bilateral recapitalizations and the growing facility services niche.

Vestar in April completed a $1.2 billion single-asset continuation vehicle for consumer analytics company Circana LLC with Blackstone Strategic Partners and HarbourVest Partners LLC as lead investors on the transaction.

“We’re big believers in the company … and we think there’s a lot more value creation to be had,” Bhat said. “At the end of the day we try to be solution providers to our LPs, and when we can offer a liquidity option that isn’t forced liquidity, and at what we think is a very attractive valuation, it’s kind of the best of both worlds for everybody.”

Meanwhile, the firm acquired a stake in HCI Equity Partners LLC platform Tech24, a commercial foodservice equipment repair and maintenance services provider, including for HVAC, in October.

The firm often acquires stakes in secondary transactions, or what Bhat calls “bilateral recaps.”

“These situations typically tend to work when the seller or the sponsor — they really like the business, they really like the management team, they believe there’s significant opportunity to continue to compound capital but like all of us, we are paid by our LPs not just to invest the money, but also to return the money,” Bhat said.

Bhat previously led Vestar’s business and technology services vertical. Before that, he worked at Advent International Corp. and Bain & Co.

Check out the podcast with Nikhil Bhat below:

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