M&A daily wrap: Pritzker, PPC Partners, Hyatt, Rising Stars, GF Data
PPC Partners, led by Tony Pritzker, has raised its second fund at $1.8 billion. PPC Partners was launched in 2018 by Pritzker Group Private Capital as its exclusive acquirer of middle-market companies. Tony Pritzker is one of the heirs to the Hyatt Hotels Corp. (NYSE: H) fortune. “Our differentiated, long-duration capital base provides us with the flexibility to grow our companies and do what’s right for our businesses over the long term” says PPC Partners managing partner Paul Carbone. “We have gathered a select group of like-minded families and institutions, and together we can be even more effective in partnering with family- and entrepreneur-owned companies.” PPC Partners invests in middle-market businesses that are valued up to $750 million. PPC recently acquired food products producer C.H. Guenther & Son Inc., makes artisan breads, buns, rolls, biscuits, gravy mixes, frozen appetizers, spices and desserts, under the Pioneer, Morrison, Tribeca and Sun-bird brands. PPC invests on behalf of certain Pritzker family members and other long-term focused family and institutional investors, and leverages the Pritzkers’ experience, reputation and network, an institutional-quality franchise and a differentiated, long-duration capital base to build businesses, according to the firm. Kirkland & Ellis represented PPC Partners on the fund raise and Credit Suisse served as the placement agent.
High valuations and abundant use of debt continued to mark completed deal activity in the first quarter of 2018, according to GF Data. Two hundred and eight private equity groups and other deal sponsors reported on 52 transactions closed in the quarter. The overall average valuation mark for the quarter was 6.9x valuation multiple, a marked retreat from the torrid 8.0x valuation multiple average in the prior quarter. At first blush, valuations in 2018 seem to have retreated to pre-2017 levels. However, GF Data gravitates to the view that the random fall of completed deals in 4Q 2017 versus 1Q skewed artificially high in the first period and low in the second. Averaged together, the result is a continuation of already unprecedented aggregate valuations attained in the middle quarters of GF Data. Read the full story: Valuations dropped slightly but are still higher than average
Mergers & Acquisitions has announced the Rising Stars of Private Equity. These 11 up-and-coming investors are expected to play significant leadership in the future. Among them are: Ethan Liebermann, who led TA Associates’ investments in Aldevron and MedRisk and co-sponsored CCRM, Datix and SoftWriters; and Jennifer Roach, who helped Yellow Wood Partners build PDC Brands and sell it to CVC Capital Partners. As we spoke with dealmakers about the 11 Rising Stars, common themes emerged. All have demonstrated the ability to handle many aspects of the PE business, including: fostering trusted relationships and developing deep networks throughout the sectors they invest in; forging and/or expanding their firm’s investments in key sectors; identifying add-on acquisitions and other opportunities for portfolio companies; representing their firms well in the marketplace; and taking on leadership roles within their firms, including developing new systems and tools and training other dealmakers.
Congratulations to Mergers & Acquisitions’ 11 Rising Stars of Private Equity:
Daniel Hopkin, Partner, Kainos Capital
John Kos, Principal, GTCR
Erik Latterell, Director, Stone Arch Capital
Ethan Liebermann, Principal, TA Associates
Jaime McKenzie, Director, Monomoy Capital
Jennifer Roach, Vice President, Yellow Wood Partners
Joseph Rondinelli, Principal, Frontenac
David Shainberg, Vice President, Balmoral
Tom Smithburg, Vice President, Shore Capital Partners
Nicholas Stone, Managing Director, Cyprium Partners
Afaf Ibraheem Warren, Senior Associate, Siris Capital
For profiles of the emerging leaders, see Meet Mergers & Acquisitions' 11 Rising Stars of Private Equity.
Technology-focused private equity and venture capital firm Insight Venture Partners has raised its fifth fund at $6.3 billion, the firm's larget to date. The firm now has more than $23 billion under management. Since it was founded in 1995, Insight Venture has been involved in over 225 deals. "Our growth equity expertise has extended to private equity success through multiple M&A platform companies that give us the flexibility to invest in a variety of scaling organic growth opportunities, as well as PE-style inorganic growth stories," says Insight Venture managing director Deven Parekh. Willkie Farr & Gallagher LLP represented Insight Venture.
Asahi Kasei Corp. is buying Sage Automotive Interiors, a supplier of technical textiles and microfiber suedes for the automotive industry, from Clearlake Capital. Asahi Kasei is a diversified group of companies, with operations in the chemicals and fibers, homes and construction materials, electronics, and healthcare business sectors.
Brightstar Capital Partners has closed its acquisition of QualTek USA LLC, a provider of engineering, installation, fulfillment and program management, to the telecommunications and power sectors. For more on Brightstar's investment strategy, read our Q&A with the firm's managing partner Andrew Weinberg: “Greatest generational transfer of wealth ever seen” benefits Brightstar's $710M debut fund.
TSG Consumer Partners has acquired a minority stake in fashion eyewear brand Privé Revaux Eyewear. Roth Capital Partners, Holland & Knight LLP and Schenck, Price, Smith & King LLP advised Privé Revaux. Ropes & Gray represented TSG.
WindRose Health Investors has invested in Basys, a provider of benefits administration technology for the Taft-Hartley market. Ziegler and Womble Bond Dickinson LLP advised Basys. Hogan Lovells represented WindRose. BMO Capital Markets provided financing.
DJ Gribbin has joined Stonepeak Partners as a senior operating partner. Gribbin previously served as a special assistant to the president for infrastructure policy.
Serena Williams enjoyed a dazzling week at Wimbledon. Out of the grand slam game for 16 months as she started a family and suffered post-delivery complications, Williams, seeded 25th, fought her way into the finals. Meghan, Duchess of Sussex and Catherine, Duchess of Cambridge watched from the All England Club's Royal Box, as Williams finished second to Angelique Kerber on July 14. Williams is among many star athletes who have excelled in business as well as in sports. If you’ve had a beer and chicken wings while waiting for a flight at the Raleigh-Durham International Airport, or grabbed a smoothie while shopping at the Federal Plaza in Rockville, Maryland, or enjoyed a steak dinner at New York’s Grand Central terminal, you’ve got a sports celebrity athlete to thank. Among the athletes investing are Dale Earnhardt Jr.,LeBron James, Michael Jordan and Greg Norman. View our slideshow: Serena Williams, heading to Wimbledon finals, and other athletes bet on restaurants, wineries, juice bars.
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: 6 strategies to turn an underperformer into a "mudder."
Summer reading list: 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’ list entertain, instruct and inspire. Check out our listicle: Dealmaker’s guide to summer reading: 15 new books.