M&A daily wrap: Perry Ellis, Randa Accessories, George Feldenkreis, Exponent Exchange, Sallie Krawcheck, summer reading
Despite a higher offer from Randa Accessories, the board of directors special commitee of Perry Ellis International Inc. (Nasdaq: PERY) has reaffirmed its intention to recommend that shareholders vote for the $437 million take-private deal proposed by company founder George Feldenkreis, who is the largest shareholder. The Feldenkreis deal will be financed through a senior secured asset-backed revolving loan facility underwritten by Wells Fargo Bank NA, a $282 million multi-tranche term financing facility provided by Fortress Credit Advisors LLC and equity provided by the Feldenkreis family, according to a June 16 statement from Perry Ellis. The special committee noted in a July 5 statement that Randa's bid is "substantially similar" to the bid it made during the strategic review process. The committee outlined the factors considered in reaching its decision: "In arriving at its determination, the special committee considered, in relation to a 1.8 percent potential price increase from Randa’s unsolicited proposal, among other things, that: the proposal is highly-conditional, non-binding and insufficient in terms of value and certainty of the provided debt financing commitments, as well as the lack of evidence of sufficient cash equity on hand; the additional timing to enter into and complete a potential transaction with Randa; the inclusion of an unprecedented 3 percent fee payable by the company to Randa if shareholders vote down the transaction, compared to no such penalty if shareholders vote down the Feldenkreis merger; and a number of other terms affecting shareholder value or certainty are inferior, including termination fees, additional risks to closing, and the lack of appraisal rights for shareholders. Based on the totality of the circumstances considered in comparison to the potential for a slight price improvement, the special committee concluded that re-engaging with Randa at the price offered was not in the best interest of shareholders." PJ Solmon is serving as financial advisor to the special committee. Paul, Weiss, Rifkind, Wharton & Garrison LLP and Akerman LLP are serving as the committee’s legal counsel, and Innisfree M&A Inc. is serving as the Perry Ellis' proxy solicitor.
Exponent, a networking group for female dealmakers that launched in 2017, is gearing up for its first marquee event, called Exponent Exchange,on July 12. The keynote speaker is Sallie Krawcheck, who previously served as CEO of several banks, including Merrill Lynch WealthManagement and the Citi Private Bank, and is now the CEO of Ellevest, an online investing website aimed at women. Other speakers include: Lisa Bernstein, global head of human capital, Apollo Global Management LLC (NYSE: APO); Sarah Bradley, partner, Kainos Capital; Mary Kathleen Flynn, editor-in-chief, Mergers & Acquisitions; Jennifer Lu, executive director, Moelis & Co. (NYSE: MC); and Cheraé Robinson, founder, Tastemakers Africa. Underscoring enthusiasm for initiatives aimed at women, sponsors of the event include leading dealmaking companies, such as Apollo, Baird, BDO, Merrill Corp. and Moelis. Read the full story: Entrepreneurs Sallie Krawcheck, Cheraé Robinson to speak at Exponent Exchange.
Summer reading list: From stories of star athletes Arnold Palmer, Keith Hernandezand 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’ list entertain, instruct and inspire. Check out our listicle: Dealmaker’s guide to summer reading: 15 new books.
For a roundup of recent M&A announcements, read: The weekly wrap: Perry Ellis, Hunter Douglas, Jennifer Convertibles and more.
For news of private equity firms marketing new funds, read: PE fundraising scorecard: Aterian, Beekman, Carlyle, Estancia, Riverside Partners.
Justify recently joined the elite group of Triple Crown winners. But, as anyone who’s ever bet the ponies knows, they can’t all be Justifys. Sometimes you get a winner and sometimes, for reasons that aren’t quite clear to anyone, you get an underperformer. It’s a concept with which most fund sponsors may be intimately familiar. You bet on the investment because you foresee its potential and understand the path it needs to take in order to achieve it. Here's a step-by-step guide to getting a stuck-in-the-mudder into racing shape, written by Accordion's Rishi Jain and Anthony Horvat : Stuck in the mud: how to speed up an underperforming PE portfolio company.
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. The Detroit firm won Mergers & Acquisitions’ M&A Mid-Market Award for 2017 Seller of the Year. Watch the video: Huron's Flex Equity resonates with owners who don't want to give up control.
As the dominoes start to fall and momentum builds, timing will matter to investors in cannabis, writes Jeffrey Howard, managing partner at Salveo Capital, an alternative investment firm specializing in the legalized cannabis sector, in a guest article. For most, the question isn’t whether the federal government legalizes cannabis, it’s how much longer investors will be able to capitalize on this undefined future to influence and profit from how the ecosystem ultimately takes shape, says Howard. If the M&A market can serve as a leading indicator, the runway for investors is already becoming shorter as strategic buyers represent, both, a threat and opportunity. In fact, major players within Big Alcohol, Big Tobacco and Big Pharma have each made inroads in the space, which proves out the investment thesis, but will surely beckon added competition. Read the full story: How to seize M&A opportunities in marijuana’s gray market.