M&A daily wrap: AT&T, Time Warner, AppNexus, DirecTV, GE, J.B. Dollison, car dealership deals
AT&T Inc. (NYSE: T) has agreed to buy digital advertising technology company AppNexus. The target uses automated software to help advertisers buy ads on websites and apps. The company also serves as a marketplace, connecting buyers and sellers of ads. AppNexus will become part of AT&T's advertising and analytics division, which was formed a year ago to help AT&T expand into digital TV advertising. The AppNexus deal comes on the heels of AT&T completing its $85 acquisition of Time Warner and the company is looking to AppNexus to help strengthen its services in advanced TV advertising. "Ad tech unites real-time analytics and technology with our premium TV and video content,” says Brian Lesser, the CEO of AT&T advertising and analytics. "The combination of AT&T advertising & analytics and AppNexus will help deliver a world-class advertising platform that provides brands and publishers a new and innovative way to reach consumers in the marketplace today.” AT&T bought DirecTV in 2015 for $48.5 and has since launched streaming subscription TV service DirecTV Now. In 2016, AT&T acquired video content streamer Quickplay Media to support DirecTV Now. AppNexus' investors include: News Corp. (Nasdaq: NWSA), WPP, Fidelity, TCV, Microsoft Corp. (Nasdaq: MSFT), Deutsche Telekom, and Khosla. Goldman Sachs & Co. (NYSE: GS) and Goodwin are advising AppNexus. J.P. Morgan Securities LLC (NYSE: JPM) is advising the company's selling stockholders.
Consolidation has become a driving force for M&A in the U.S. car dealership space, with autonomous vehicles, ride-sharing and other influences contributing as well. An estimated 1,080 car dealerships were sold to 612 buyers between 2014 and 2017, reports Kerrigan Advisors, an Irvine, California, sell-side advisor to auto dealers. We asked Stephen Dietrich, a Denver-based Holland & Knight attorney with an auto dealer M&A practice, for his thoughts on trends in the space and what middle-market private equity firms should consider when looking at potential deals for car dealerships. Read the full story: Car dealerships sell, as self-driving vehicles shake up auto industry.
Tech-enabled service businesses, including those that use the Software-as-a-Service, approach provide “a very sticky customer base,” says Crutchfield Capital’s J.B. Dollison, who serves as chair of the ACG Global board, in this video shot at ACG InterGrowth 2018. “Those fundamentals are very attractive in the market, and some of those businesses are selling for Titanic multiples.” Watch the full video: SaaS businesses are selling for “Titanic multiples,” says Crutchfield’s J.B. Dollison.
Cross-border deals have declined significantly in the first half of 2018, according to a study from Willis Towers Watson and Cass Business School. The report says that cross-border acquisitions from North American buyers represented about 13 of all deals in the 2018 first half, down from 20 percent for the same time period in 2017. “The increasing focus on domestic acquisitions in North America is being fueled partly by the U.S. tax reform law changes, which are encouraging repatriation of capital back to the U.S.," says Jim McKay, director, M&A services, Willis Towers Watson. This, in turn, makes it easier for U.S. firms to target and invest profits in domestic acquisitions."
Tritium Partners has made a growth investment in healthcare software company DCS Global. DCS offers cloud-based technology to help manage finances for reimbursements.
Avista Capital Partners-backed over-the-counter healthcare company Kramer Laboratories has bought the anti-dandruff shampoo Nizoral brand from Janssen Pharmaceutica NV, a subsidiary of Johnson & Johnson (NYSE: JNJ). Ropes & Gray represented Avista.
Bregal Sagemount-backed Steele Compliance Solutions has acquired TransparINT, an automated real-time monitoring system for negative news. TransparINT is used by four of the top 10 U.S. banks.
Bregal Investments has raised a €40 million ($46.7 million) sustainable development fund, as part of the firm's environmental, social and governance (ESG) strategy. The fund will provide financing to existing Bregal portfolio companies focusing exclusively on ESG improvement projects. The fund can be accessed by portfolio companies to obtain loans on attractive terms to invest in ESG-related projects, including those relating to renewable energy, energy efficiency, supply chain improvements, emissions and waste, and ecosystem impact.
General Electric Co. (NYSE: GE) agreed to sell its industrial gas-engine business to Advent International for $3.25 billion, bolstering CEO John Flannery’s plan to shed assets and reshape the beleaguered manufacturer. Read the full story: GE sheds more assets, sells gas engine unit to Advent.
For more deal announcements, see the weekly wrap: Gores Holdings, Match, Siris Capital.
For more on PE fundraising, see PE fundraising scorecard: KKR US CLO and NewSpring Health.
Jim Brady was hired by PE firm Frazier Healthcare Partners as an operating partner. Brady was previously an operating partner at Marlin Equity Partners.
Stacia Schlosser Ryan has joined investment bank Perella Weinberg Partners as a partner. Ryan was most recently with Morgan Stanley (NYSE: MS) and she focuses on the consumer and retail sector.
Bill Cordingley was promoted from global sector head for animal protein to head of the Chicago office at food and agribusiness bank Rabobank. In his new role, Cordingley will focus on several subsectors including: dairy, farming, grains and oilseeds and food packaging.
Huron Capital’s new Flex Equity Fund resonates with companies that “need a partner to help them grow, or to provide some liquidity, but don't want to give up a controlling interest,” says partner Douglas Sutton in this video interview shot at ACG InterGrowth 2018. Watch the full video: Huron’s Flex Equity resonates with owners who don’t want to give up control. For more on the strategy, see our Q&A with managing partner Brian Demkowicz:Huron Capital's Flex Fund courts owners who want growth but also control. The Detroit firm won Mergers & Acquisitions’ M&A Mid-Market Award for 2017 Seller of the Year.
"Clamoring to be the loudest person in the room” is not the way to bring more women into the middle market, says Suzie Doran of SingerLewak, in this video interview shot at ACG InterGrowth 2018. Doran serves as president of ACG Los Angeles, which recently took the Women of ACG Los Angeles on a private viewing of the 100th Anniversary Exhibition of King Tut at the California Science Center. “We're about making connections and being able to take those connections to the next level.” Watch the full video: No “clamoring to be the loudest person in the room” at women dealmaker events.
More than 2,000 dealmakers from 1,100 companies, representing 16 countries, headed to sunny San Diego for three days of networking at ACG InterGrowth 2018. Jeff Immelt, who served as CEO and chairman of General Electric Co. (NYSE: GE) from 2001 to 2017, was the keynote speaker. Check out our slideshow: InterGrowth 2018 in pictures.
Peter Van Raalte, co-founder of Corinthian Capital, and Mary Kathleen Flynn, editor-in-chief of Mergers & Acquisitions, were featured speakers at the ACG NY Industrial Conference at the New York Athletic Club. The conference is part of the ACG Northeast Industry Tour, sponsored by ACG New York, ACG Boston and ACG Philadelphia. View our slideshow: Manufacturing M&A: high prices but plenty of opportunities.
From stories of star athletes Arnold Palmer, Keith Hernandez and Tiger Woods to advice from entrepreneurs Bridgewater Associates’ Ray Dalio, KPCB’s John Doerr, Nike’s Phil Knight and Brava Investments’Nathalie Molina Niño, plus strategies to help business leaders in general, and female dealmakers in particular, the 15 books on Mergers & Acquisitions’ summer reading list entertain, instruct and inspire. Check out our listicle: Dealmaker’s guide to summer reading: 15 new books.
Read full coverage of Mergers & Acquisitions' 11th annual M&A Mid-Market Award winners: Campbell Soup, Huron Capital, Idera CEO Randy Jacops, LLR Partners, McGuireWoods, Stryker, Twin Brook and William Blair.