M&A wrap: Carlyle, Frontier Capital, Huron, Riverside, Star Mountain

carlylegivingback

Private equity firms are giving back - from mentoring students in schools to organizing groceries at food pantries and from running races for cancer cures to cleaning pens at animal shelters. In our special report, The Big Give, Mergers & Acquisitions focuses on the philanthropy and volunteering initiatives of 5 PE firms: the Carlyle Group LP (Nasdaq: CG), Frontier Capital, Huron Capital, the Riverside Co. and Star Mountain Capital. “We do a lot of charity. The founders and other people at the firm give hundreds of millions a year to charities of their choice,” says managing director Christopher Ullman. Carlyle CEO David Rubenstein has signed The Giving Pledge, a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to philanthropy, and the firm has a long tradition of programs supporting employee giving and volunteering. Philanthropic initiatives are more important than ever to today’s work force. Millennials, defined as people born between 1981 and 1996 by the Pew Research Center, are “for sustainability, diversity, inclusion and giving back to the community,” says Ullman. “We are finding this more and more. Yes, we are here to make money, secure retirement for pensioners, but the firm wants to support people’s efforts to make the world a better place.” Frontier Capital supports several causes, including The Miracle League, a baseball organization for people who are mentally and physically challenged. “There’s more to life than work and material things, and our people understand that,” says Frontier managing partner Andrew Lindner. At Detroit-based Huron Capital, the firm’s philanthropic efforts are focused on local groups. “We want to leave our footprint in this community where we live and work while being as helpful as possible,” says partner Gretchen Perkins. “The charitable activities we do as a group, the ability for each employee to influence where Huron’s donations go, and the ability to perform community service during work hours, or receive matching funds for an employee’s personal non-profit passion, all contribute to a portion of an employee’s sense of purpose and contributing to the greater good.”

Deal news
Cimarex (NYSE: XEC) is buying oil and gas company Resolute Energy Corp. (NYSE: REN) for $1.6 billion. Evercore Inc. (NYSE: EVR) and Akin Gump Strauss Haueer & Feld are advising Cimarex. Petrie Partners Securities LLC, Goldman Sachs & Co. (NYSE: GS), Arnold & Porter and Wachtell, Lipton, Rosen & Katz are advising Resolute.

Software and data analytics company Black Knight Inc. (NYSE: BKI) is investing $375 million in Dun & Bradstreet to take a minority stake in the target. Dun & Bradstreet is a marketing data and analytics provider that aims to help businesses gain customers. Thomas H. Lee Partners, CC Capital and Cannae Holdings agreed in 2018 to buy the company for $6.9 billion.

KKR &Co. (NYSE: KKR) is buying GeoStablization International, a provider of infrastructure safety and repair services, from CAI Capital Partners. William Blair and Perkins Coie are advising the sellers. Kirkland & Ellis is advising KKR. UBS Securities and KKR Capital Markets are providing financing.

Spell Capital Partners has bought candy maker Pearson Candy from Brynwood Partners. Harris Williams advised Pearson.

Sun Capital Partners and StonePoint Materials are buying VantaCore Partners, a producer of crushed stone, sand and gravel for the infrastructure, energy, commercial, residential sectors.

Dermapharm Holding SE is buying ingredients company Euromed Botanicals from the Riverside Co.

FWM Holdings, the parent company of Forbes Family Trust and LGL Partners, is acquiring AM Global Family Investment Office.

For more deal announcements see: The weekly wrap: Bristow, Penn National, SAP.

For more on private equity fundraising efforts see: PE fundraising scorecard: Centre Lane and P4G Capital.

People moves
Zack Shaftal has joined 3i as a senior associate, and Jack Behrman has joined as an associate. Beherman was previously with Metalmark Capital, while Shaftal was most recently with Madison Dearborn Partners. 3i is an investment company with two complementary businesses, Private Equity and Infrastructure, specializing in core investment markets in northern Europe and North America.

Steve Allan has been named global M&A leader at due diligence firm Willis Towers Watson. He is working in the company's global human capital and benefits business. Allan previously served as M&A leader in the firm's U.K. and Western Europe groups.

Featured content
The private equity industry will focus on educating lawmakers newly elected in the mid-terms. “As an industry, we will work to educate the nearly 100 new members of Congress about private equity’s positive impact in their communities and their constituents’ lives,” Pam Hendrickson, the chief operating officer of middle-market private equity firm the Riverside Co., tells Mergers & Acquisitions in a Q&A. “We will be talking with them about jobs, investment, and retirement security. We need to make the personal case to each of the new members as well as top leadership in both the House and the Senate. As an example, the incoming chair of the Ways and Means committee Richie Neal is from the State of Massachusetts which had a 15.4 percent annualized return from its PE portfolio over 10 years.” Hendrickson is currently a member of the board of the American Investment Council and a member of the advisory board of the Kenan Institute for Ethics at Duke University. In the past, she has testified before Congress on behalf of the private equity industry. Read the full interview: Post-election priority for private equity: educating 100 new members of Congress. For more on how the mid-term election results are playing out in the middle market, including how former PE professionals Mitt Romney, Bruce Rauner and J.B. Pritzker fared Tuesday night, see Dealmaker’s post-election guide: Mitt Romney, J.B. Pritzker, Dodd-Frank, Pam Hendrickson, Gretchen Perkins.

U.S. middle-market dealmaking in the first three quarters of 2018 surpassed the same period in 2017, according to PitchBook. If the pace continues in the fourth quarter, middle-market deal value may surpass $400 billion for the first time ever. One important question: Will the momentum continue now that the power has shifted in Congress? Mergers & Acquisitions asked Matthew O’Loughlin, partner and co-chair of the mergers and acquisitions practice with Manatt, Phelps & Phillips LLP, to share his thoughts on how the mid-term elections will affect M&A. Read the full story: It's been a good year for M&A. Will momentum continue post election?

Mergers & Acquisitions asked Dan Shea, a managing director at BDO Capital Advisors, to share his thoughts on the election results. Read the full story: Infrastructure investment is an area of potential agreement in Washington.

Mergers & Acquisitions identifies 15 cities as fertile communities for dealmaking. We look at metropolitan areas from Austin (where Michael Dell launched a PC business out of his dorm room back in the day and where thousands gather every year for SXSW) to St. Louis (home of private equity firm Thompson Street Capital Partners). Be sure to check out Milwaukee (with private equity firm Robert W. Baird & Co. and investment bank Clearly Gull) and Minneapolis (home of strategic buyers 3M, Best Buy, General Mills, Hormel and Target). And don’t forget Boston, Chicago, New York, San Franciscoand Los Angeles and more. See our list, Dealmaker's guide to 15 cities where M&A thrives.

The Kansas City Chiefs take on the Los Angeles Rams on Monday night to wrap up NFL Week 11. Off the field, New England Patriots quarterback Tom Brady recently teamed with former Giants defensive end Michael Strahan, who is the co-host of ABC’s Good Morning America, to launch a sports media startup called Religion of Sports Media, which has raised $3 million in venture capital funding from CourtsideVCand Advancit Capital. Many NFL players invest in companies. Muhsin Muhammad, who played wide receiver for the Carolina Panthers and the Chicago Bears, is a managing director of private equity firm Axum Capital Partners. Steve Young, former San Francisco 49ersquarterback, is a co-founder of private equity firm HGGC. Mergers & Acquisitions takes a look at star players who invest in companies through private equity, venture capital and other investment vehicles.

Events
Middle Market Week, hosted by ACG New York and held Nov. 26-30 at various locations throughout New York, brings together leading global middle-market dealmaking professionals to develop and enhance their dealmaking activities, strengthen their long-term relationships, and provide numerous opportunities for networking all week long. Mark your calendar for the Private Equity Annual Wine Tasting Gala on Nov. 28 at Gotham Hall. The building was constructed in the 1920s as the headquarters of the Greenwich Savings Bank. The gala brings together the leading middle market private equity firms for an evening of fine wines and networking.

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