M&A daily wrap: NFL's Carolina Panthers, Cam Newton, David Tepper, Appaloosa, Brynwood Partners
David Tepper, the founder of Appaloosa Management hedge fund, is buying the National Football League's Carolina Panthers for a record price of $2.2 billion. Based in Charlotte, North Carolina, the team features star quarterback Cam Newton, who was drafted as the first overall pick by the Panthers in the 2011 NFL Draft. Newton is known for celebrating touchdowns by striking a pose like Superman flying. The team was put up for sale after sexual harassment allegations surfaced against owner Jerry Richardson, who made his fortune in fast food chains, including Hardee's and Bojangles. “I am thrilled to have been selected to be the next owner of the Carolina Panthers," Tepper said in a statement. "I have learned a great deal about the community and the team over the past several months and look forward to becoming part of the Carolinas." To complete the deal, Tepper must divest his minority stake in the Pittsburgh Steelers, according to NFL rules. "Tepper wants Carolina’s football side of the business to mirror the Steelers," tweeted ESPN’s Adam Schefter. "Tepper wants continuity, stability, progressive thinking on player contract extensions, and not setting the market on free agents. He wants the Steeler way in Carolina." Tepper, a Pittsburgh native, has a net worth of around $11 billion, according to Forbes. He is known for betting that major banks would rebound following the 2008 financial crisis and bought stakes in Bank of America (NYSE: BAC) and Citigroup (NYSE: C) in 2009. He founded Appaloosa, based in Miamia Beach, Florida, in 1993. Appaloosa has $16.5 billion under management, and the firm saw net gains of $2 billion in 2017, according to LCH Investments, a London-based fund-of-funds that provides data on hedge funds. The previous NFL team purchase price record was held by Terry Pegula, who bought the Buffalo Bills for $1.2 billion in in 2014 . Pegula founded natural gas driller East Resources, which was bought by Royal Dutch Shell for $4.7 billion in 2010. O'Melveny is representing Tepper in the Panthers deal.
Brynwood Partners-backed Cold Spring Brewing Co. has bought Carolina Beverage Group from SunTx Capital Partners. Carolina Beverage is a contract manufacturer in the beverage sector for brands that produce energy drinks, sparkling waters, teas, cocktails, flavored malt beverages, craft beers and other ready-to-drink beverages. The company also produces private label beverages for retailers throughout the U.S. “Value added manufacturing is an important sector and an area that Brynwood continues to make significant investments in," says Brynwood CEO Henk Hartong III. The acquisition is Brynwood's first since the firm closed its eighth fund in January. Brynwood acquired Cold Spring in August 2017. Holland & Knight represented Brynwood. Cascadia Capital and Haynes and Boone advised Carolina Beverage. Financial terms were not disclosed. Founded in 1984, Brynwood is a middle-market private equity firm with more than $1.1 billion in assets under management. The Greenwich, Connecticut-based firm makes control investments in lower middle-market companies and brands within the consumer sector. Some of Brynwood's other investments include Harvest Hill Beverage Co. and Joseph's Gourmet Pasta.
Pinnacle Dermatology, a portfolio company of Chicago Pacific Founders, has acquired Spencer Dermatology Associates, for undisclosed terms. CPF, which has offices in Chicago and San Francisco, invests in lower middle-market healthcare service providers. The firm was founded in 2014 by Mary Tolan (founder of Accretive Health), Larry Leisure (who previously worked at Kleiner Perkins, Optum and Kaiser) and Vance Vanier (Navigenics, Verinata). Among the firm’s advisors are George Shultz, who previously held federal cabinet posts in the President Richard Nixon and President Ronald Reagan administrations, including U.S. Secretary of State, Secretary of Treasury and Secretary of Labor. Steven Gruber, managing partner of Oak Hill Capital Partners, also serves on CPF’s advisory board.
Zoetis Inc. (NYSE: ZTS) has agreed to acquire veterinary diagnostic instruments maker Abaxis Inc. (Nasdaq: ABAX) for about $2 billion. Abaxis makes devices such as hematology analyzers. Zoetis estimates that the animal health industry has grown by approximately 10 percent annually over the last three years and the company expects that figure to rise. Wachtell Lipton Rosen & Katz, Guggenheim Securities, and Barclays are advising Zoetis. Piper Jaffray Cos. (NYSE: PJC) and Cooley are advising Abaxis.
Customer data science company Dunnhumby has acquired retail marketing and promotions firm Apatris Software. The deal will help retailers more effectively compete in the data-driven economy by leveraging Dunnumby’s expertise in customer data science. Dunnhumby works with companies including: Tesco, Monoprix, Raley’s, Meijer, the Coca-Cola Co. (NYSE: KO), L’Oreal and Procter & Gamble Co. (NYSE: PG).
Blackstone Group LP (NYSE: BX) and International Market Centers have agreed to buy AmericasMart, a showroom operator for furniture, home decor, gifts and apparel. Simpson Thacher is representing the buyers.
Vector Capital has purchased a minority stake in cybersecurity software provider the Kela Group for $50 million. Kela works with businesses and government agencies to help them provide real-time intelligence about cyber threats. For more on Vector, read our Q&A with Vector founder Alex Slusky.
CI Capital-backed Maroon Group has a bought J. Tech Sales, a chemicals and ingredients distributor for the household, personal care, food and beverage and coatings sectors. The deal marks Maroon's eighth add-on under CI's ownership.
Blue Wolf Capital has acquired a majority stake in industrial knife manufacturer TGW. The target makes machine knives for the food and beverage, packaging and industrials sectors. Financial terms were not disclosed.
Resurgens Technology Partners has acquired the Assurance Business Continuity Management Planning software business from Sungard Availability Services. Assurance helps businesses develop an end-to-end business continuity program, including business impact analysis, incident management, disaster recovery planning and reporting and emergency notification management. JMP Securities advised the sellers.
Sofina SA, a family run and controlled investment company has purchased a minority stake in Cambridge Associates. Financial terms were not disclosed. Broadhaven Capital Partners advised Cambridge.
Private equity firms, including KKR, LLR Partners, the Riverside Co., Shore Capital Partners, TA Associates, and strategic buyers, including Cognizant (Nasdaq: CTSH), are investing in eye doctors, dentists and veterinarians, plus revenue cycle management providers and other areas of healthcare that are ripe for consolidation, as Mergers & Acquisitions explores in our in-depth feature,Why private equity firms like veterinarians, opthamologists and dentists, and slideshow, 6 healthcare specialties driving M&A deals.
Covenant-lite loans are making a comeback, as competition in middle-market lending increases, says Ken Ken, CEO of Churchill Asset Management. Following on the heels of a record year of capital raising, debt financing provider Churchill recently closed a $300 million collateralized loan obligation fund, Churchill Middle Market CLO IV. Churchill is part of Nuveen, the asset management division of TIAA. Overall, Churchill manages more than $4.4 billion in committed capital. Read our Q&A: CLOs are huge draw for income-hungry investors, says Churchill CEO Ken Kencel.
For more on the lender front, Twin Brook Capital Partners grew significantly in 2017, including doubling deal value from the previous year, raising a second fund of $2.3 billion, and building the three-year-old firm into a major source of loans in the lower middle market, earning the firm Mergers & Acquisitions' M&A Mid-Market Award for 2017 Lender of the Year. The Chicago firm is the middle-market direct lending subsidiary of Angelo, Gordon & Co., a $28 billion alternative investment firm focused on credit and real estate investing. Twin Brook was founded in 2014 by seasoned middle-market lenders Trevor Clark and Christopher Williams, who had previously co-founded Madison Capital Funding. Twin Brook announced recently that Williams has stepped 8back from his role to attend to a health issue with an immediate family member. Read our Q&A: Lenders must be active partners, says Twin Brook's Trevor Clark.
Artificial intelligence, the Internet of Things, wearable biometrics and precision medicine are transforming dealmaking in the healthcare sector, says Essam Abadir, the CEO of Aspire Ventures, which recently teamed with the Penn Medicine Lancaster General Health network of hospitals to launch a $300 million fund to invest in personalized medical devices and practices. Read our Q&A with Abadir.
Read our Q&A with GTCR managing director Aaron Cohen about The Leaders Strategy and the Chicago private equity firm's sale of Callcredit, a U.K. provider of real-time credit reports, toTransUnion (NYSE:TRU) for about $1.4 billion.
Check out our Q&A with ParkerGale partner Devin Mathews about the tech-focused private equity firm's recent investment in CultureIQ/Corporate Executive Board, M&A investing trends and how the Chicago firm uses its weekly podcast.
Greg Hawver has joined McGuireWood's Chicago office. Previously with Winston & Strawn, Hawver focuses on private equity and M&A across the energy, healthcare, automotive, aerospace and manufacturing sectors.
Jeff Zhang has joined Orrick's M&A and private equity practice as a partner. Most recently with King & Wood Mallesons, Zhang represents Chinese state-owned and privately-held companies on M&A.
Raúl Fernández-Briseño was hired by Mayer Brown as a partner in the firm's Mexico City office where he will serve as the leader of M&A in the region. Most recently with White & Case, Briseño has experience in the telecommunications and aviation sectors.
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.