M&A wrap: Crossplane Capital, Prophet Equity, Corlex Capital, Ivan Ramen, RenaissanceRe, Tokio, State Farm
A new Dallas private equity firm founded by former managing directors of Prophet Equity has launched. Crossplane Capital is making control investments in niche manufacturing, value-added distribution and industrial business services companies with up to $200 million of revenue. The firm was co-founded by partners Ben Eakes and Brian Hegi, both of whom served previously at Prophet. Rounding out the leadership team are managing director Mike Sullivan, who also hails from Prophet, and operating partner Ingrid West, who previously served as president of Acton Mobile, a modular office rental company backed by Prophet and sold to Williams Scotsman in 2017. “With experience at top private equity and professional services firms, including Prophet Equity, AlixPartners, Bain & Company and Houlihan Lokey, and as executives within leading industrial businesses, including Danaher and Acton Mobile, our well-rounded team brings a proven value-creation playbook to family-owned businesses and companies involved in complex transactions,” says Eakes. “Hand in hand with management, we will seek to build great businesses through prudent net working capital management, rigorous cost optimization and thoughtful revenue growth.”
Also launching is Corlex Capital LLC, an Atlanta-based PE firm that is making control and minority equity investments in lower middle-market companies in the franchise, restaurant, retail and service sectors. Founded by private equity and franchise industry veterans Jason Bedasse, Jake LaJoie, Dan Lonergan, Chad Magee and Jeffrey Kolton, the firm seeks to invest in companies with Ebitda between $5 million and $25 million and also debt capital raise consulting. Corlex has signed a letter of intent to invest in the Ivan Ramen brand, created by chef Ivan Orkin, to develop an American urban casual prototype of his ramen restaurants. The Ivan Ramen portfolio includes restaurants in New York, operations in Tokyo, an episode of Netflix’s Chef’s Table documentary series and a popular cookbook.
RenaissanceRe Holdings Ltd. (NYSE:RNR) has agreed to acquire Tokio Marine Holdings Inc.'s reinsurance business, which includes Tokio Millennium Re AG and Tokio Millennium Re (UK) Ltd, for $1.5 billion in cash and stock. In addition, State Farm Mutual Automobile Insurance Co. has agreed to invest $250 million in RenaissanceRe through its purchase of common shares in a private placement, following termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. BofA Merrill Lynch is acting as financial advisor to RenaissanceRe in connection with the transaction, with Willkie Farr & Gallagher LLP as legal counsel. Wachtell, Lipton, Rosen & Katz is acting as legal counsel to RenaissanceRe's board of directors.
Novo Nordisk, a global healthcare company headquartered in Denmark, has agreed to acquire the rights to Macrilen in the U.S. and Canada from Strongbridge Biopharma plc (Nasdaq: SBBP), a global commercial-stage biopharmaceutical company focused on the development and commercialization of therapies for rare diseases with significant unmet needs. Macrilen is the first and only FDA-approved oral drug indicated for the diagnosis of adult growth hormone deficiency (AGHD).
The Oakland Raiders take on the San Francisco 49ers Thursday night in NFL Week 9. 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 CourtsideVC and 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 49ers quarterback, 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.
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 Francisco and Los Angeles and more. See our list, Dealmaker's guide to 15 cities where M&A thrives.
Why investors like diversity. "Companies that are inclusive and also diverse tend to outperform companies that aren't," says investor Lorine Pendleton of Pipeline Angels and Portfolia in this video interview shot at Exponent Exchange, a gathering of 200 female dealmakers. Watch the full video: M&A Insights: Inclusion investing.
Canada legalized recreational marijuana on Oct. 17, marking the first G7 nation and the second country in the world to enact full legalization. To investors in the still developing cannabis industry, many believe the market is just now approaching its own inflection point, as it transitions from a black to gray market, characterized by a more attractive risk profile and outsized growth potential. The sticking point is that as a Schedule I drug illegal under federal law, cannabis still presents imposing obstacles for traditional investors, ranging from capital markets that remain inaccessible to uncertainty over bankruptcy proceedings. Yet, ironically, it’s these very same obstacles that make the opportunity so appealing to investors willing to operate in an indefinite gray area to create an ecosystem for a market expected to reach $75 billion in size by 2030. Salveo Capital managing partner Jeffrey Howard shares advice about investing in cannabis in a guest article. Read the full story: How to seize M&A opportunities in marijuana’s gray market.
ACG Chicago's Family Office Conference, held Nov. 8, at the Westin Chicago River North, brings deamakers together for a "deep dive" into family offices. The event features a keynote by Laurent Roux, Gallatin Wealth Management, and panels, including: Current State of Family Office Direct & Co-Investment Activity, with Gary Levenstein, Nixon Peabody; and Impact of Millennial Generation on Family Office Investment Strategy including Social Impact Investing, with Adam Lieb and Tony Oommen, Fidelity Family Office Services.
ACG Florida Capital Connection, held Nov. 12-14, at the Vinoy Renaissance St. Petersburg Resort & Golf Club, puts “sun and fun” into dealmaking for the middle market, bringing together hundreds of dealmakers. The keynote speaker is Forbes Media CEO Steve Forbes, and the featured speaker for the Women’s Forum is Valerie Crites Fowler, who served as a diplomat in the U.S. Foreign Service for over 29 years, reaching the rank of Minister Counselor in the Senior Foreign Service.
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.