M&A daily wrap: Houlihan Lokey, BearTooth Advisors, NYSE, Stacey Cunningham, Adobe, Magento
Investment bank Houlihan Lokey Inc. (NYSE: HLI) has acquired BearTooth Advisors, a firm that provides strategic advisory and placement agency services to alternative investment managers. BearTooth was founded in 2014 by managing partners Bob Brown, Andy Lund and Jim McGee. Before BearTooth, the trio was with private equity firm Advent International, and before that, Brown was with the Carlyle Group LP (Nasdaq: CG). BearTooth will form Houlihan's new private funds group, with a team of 17 people based in London and New York. BearTooth has advised on more than 20 mandates, including Chicago private equity firm ParkerGale's debut fund. “Ultimately we set the firm up with the view that PE industry is maturing quite rapidly. However, we think there are tremendous opportunities for more alternative investments," Brown tells Mergers & Acquisitions. “The trends in growth in private capital are here to stay. As you see more companies go public or private, it creates the need for more private capital.” In addition to alternative investments, BearTooth will provide strategic advisory services (including capital raising, M&A and private equity) — an area in which BearTooth expects to benefit from Houlihan's M&A resources.
The New York Stock Exchange has a “strong pipeline” of initial public offerings coming up in June, said Stacey Cunningham in an interview with CNBC. Cunningham, who currently serves as the 226-year-old exchange’s chief operating officer, is slated to become its first female president on May 25, parent company International Exchange has announced. Regulation and private equity capital have kept many smaller companies out of the public markets for far longer than they used to wait to start trading stock, and that is one of the challenges to the business, Cunningham said. “We want to make sure we haven't gone too far to a market structure that has created an environment that's good for big companies and big investors. We want to be able to welcome companies of small sizes earlier in their life." So far in 2018, seventy-seven companies have filed initial public offerings, up 8.5 percent from the same time in 2017, according to Renaissance Capital. In recent years, the NYSE has been drawing tech-focused companies that might have turned to the Nasdaq exchange in the past, including the 2017 IPOs of social media provider Snap Inc. (NYSE: SNAP) and meal kit maker Blue Apron (NYSE: APRN). The Nasdaq’s head is also a woman. Adena Friedman was promoted to CEO from COO of the Nasdaq in January 2017. Friedman previously served as chief financial officer and managing director of The Carlyle Group (Nasdaq: CG) from 2011 to 2014.
The location of Fifth Third Bancorp's (Nasdaq: FITB) first bank acquisition in almost a decade is finally known — Chicago. But the big question is whether the bank, after being out of the M&A game for so long, can make the pricey deal work. Read the full story: Does Fifth Third's merger math add up?
Adobe Systems Inc. (Nasdaq: ADBE) agreed to buy e-commerce company Magento for $1.68 billion, in a bid to capture a bigger slice of the digital-commerce industry from Salesforce.com Inc. (NYSE: CRM) and Oracle Corp. (NYSE: ORCL). Hogan Lovells is representing Adobe and Fried Frank is representing Magento. Read the full story: Adobe buys Magento to expand in e-commerce.
Just in time for the traditional June wedding season, Permira has agreed to buy a majority stake in WeddingWire for $350 million. The target's management team and Spectrum Equity are keeping minority stakes in the company. WeddingWire operates a website where couples can find information, including reviews, on venues, photographers and entertainment. The company will use the investment grow to geographically and launch new services. Fried Frank Harris Shriver & Jacobsen LLP is representing Permira, and Wilson Sonsini Goodrich & Rosati is doing the same for WeddingWire.
Thomas H. Lee Partners-backed Material Handling Systems has agreed to acquire VanRiet Material Handling Systems from Avedon Capital Patrners. Financial terms were not disclosed. VanRiet offers integration and engineering services, sortation equipment, and after-market services. Kirkland & Ellis is representing the buyer. Robert W. Baird and Allen & Overy are advising VanRiet.
Middle-market private equity firm Gryphon Investors has agreed to buy a majority stake in beauty company Milani Cosmetics, the owner of the Milani and Jordana brands, for undisclosed terms. The target's management team is keeping a minority stake in the company. Moelis & Co. (NYSE: MC) and Sheppard Mullin Richter & Hampton are advising Milani. FInanco and Kirkland & Eliis are advising Gryphon.
The location of Fifth Third Bancorp's (Nasdaq: FITB) first bank acquisition in almost a decade is finally known — Chicago. But the big question is whether the bank, after being out of the M&A game for so long, can make the pricey deal work. Read the full story here.
Roper Technologies Inc. (NYSE: ROP) has agreed to buy PowerPlan from Thoma Bravo for $1.1 billion. PowerPlan offers software that give financial insight into how complex rules and regulations impact businesses to help them make better decisions. William Blair and Kirkland & Ellis are advising the sellers.
Darling Ingredients Inc. (NYSE: DAR) has purchased Kruger Commodities Inc., including including protein conversion facilities in Hamilton, Michigan and Tama, Iowa, along with a protein blending operation and used cooking oil collection business in Omaha. Financial terms were not disclosed.
McLarty Capital Partners, a private capital provider to small- and medium-sized businesses, has rebranded as the Firmament Group. The new name reflects the firm's evolution from an extension of the McLarty family office to a global investment platform focused on turning small business into big business. Firmament provides tailored debt and equity capital directly to small businesses in the form of unitranche senior debt, junior debt, structured equity and common equity.
Amy Wollensack and Sergio Urias have joined Covington's New York office as co-chairs of the firm's private equity practice. They both represent private equity firms in M&A, and Urias has a focus on sponsors in Latin America. Wollensack and Urias were most recently with Kirkland & Ellis.
Innovation Works, a venture capital firm that invests in robotics, and Carnegie Mellon University have teamed up to host the 1st Annual AI/Robotics Venture Fair. The Fair, which has attracted more than 100 investors, takes place at Innovation Works' headquarters in Nova Place, a multi-million dollar urban redevelopment of the former Allegheny Center Pittsburgh, on Wed., May 23. Pittsburgh has been identified as one of only a handful of locations leading the country in developing cutting-edge robotics and artificial intelligence technology, and more than 70 of these companies reside in Southwestern Pennsylvania. The Venture Fair is a one-day event to showcase 20 of Pittsburgh’s artificial intelligence and robotics developers.
Axial Networks, Donnelley Financial Solutions, FD Fund Administration, Valuation Research Corp., RSM and scores of other service providers are here to help in our annual, updated Buyer’s Guide. Read the full story: From fund administrators to VDRs, dozens of firms help M&A pros compete.
Madison Capital Funding, a subsidiary of New York Life Insurance Co., has long been a stellar source of capital in the middle market. Since its founding in 2001, the Chicago lender has invested $29.2 billion of net funded commitments in 1,075 transactions with 287 different private equity sponsors. With $9.5 billion in assets under management, Madison invests alongside private equity sponsors and other investors to provide cash-flow based debt products to companies with a minimum $3.5 million in Ebitda. To gain insights on how lenders evaluate potential transactions in today's highly competitive market, we asked Madison's chief underwriting officer Jennifer Cotton to share her thoughts. Cotton oversees Madison's underwriting and portfolio management teams and serves as a member of the Investment Committee as well as the Senior Leadership team. Read the full story here: Abundance of capital drives highly competitive loan process, says Madison Capital's chief underwriter.
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.
Also 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 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.