M&A daily wrap: PwC, Twitter, Ball Corp., Platinum Equity, 2018 first half deal flow
Deal flow in the 2018 first half was driven by mega deals, despite uncertainties over US tax reform and antitrust laws, according to a PwC analysis of Thomson Reuters data. The majority of deals came from non-tech companies making technology-related acquisitions, as businesses look to update outdated software systems. Four out of 10 technology acquisitions so far in 2018 came from companies in other sectors with consumer and retail (32 percent) leading the way, followed by media and telecom (20 percent); financial services (18 percent) and industrials (16 percent). Looking ahead, Private equity firms and strategic buyers putting their cash piles to use will drive M&A activity, but the PwC report cautions: "Even as divestitures add possible acquisition targets, finding the right target at the right time and at the right price can be challenging."
Robots, once the stuff of science fiction, have become big business. Fewer places have been as instrumental in the development of robots as Pittsburgh, home to Carnegie Mellon University and its Robotics Institute, founded in 1979. One of the companies at the forefront of the community is Innovation Works, a venture capital firm that has backed a wide away of high-tech startups, including: Bossa Nova Robotics, Civic Science, JazzHR, Wombat Security and 4Moms. Exits have included: Modcloth (acquired by Walmart), NoWait (acquired by Yelp) and Vivisimo (acquired by IBM). IW and CMU recently teamed up to host the 1st Annual AI/Robotics Venture Fair. The event showcased 20 of the area’s artificial intelligence and robotics developers and attracted more than 100 investors. It was held at IW’s headquarters in Nova Place, a multi-million dollar urban redevelopment of the former Allegheny Center Pittsburgh. Rich Lunak, the president and CEO of IW and a graduate of CMU, joined the firm in 2005 after a storied career as an entrepreneur and executive. He helped grow Automated Healthcare, a company that pioneered the use of robots to dispense drugs in hospitals, from a three-person shop into a $65 million acquisition by McKesson Corp. (NYSE: MCK). After the sale, Lunak served as group president of McKesson Automation for a decade. Eventually, Francisco Partners bought McKesson Automation and renamed it Aesynt (pronounced ascent), and then Omnicell Inc. (Nasdaq: OMCL) bought Aesynt for $275 million in 2016. Mergers & Acquisitions asked Lunak to share his perspective on the investment opportunities for middle-market dealmakers in robotics. Read our Q&A: Robotics developers are ripe for investment, says Innovation Works CEO Rich Lunak.
Packaging company Ball Corp. (NYSE: BLL) is selling its U.S. steel food and steel aerosol assets to a joint venture it is forming with Platinum Equity. The JV is called Ball Metalpack and Platinum will own 51 percent with Ball taking the remaining 49 percent. Ball will receive more than $600 million in pre-tax proceeds from the transaction. "We have a long-standing relationship with the Platinum Equity team," says Ball CEO John Hayes. They have created tremendous value in the packaging sector, our management knows them well and we are confident they are the ideal partner." Ball Metalpack manufactures steel containers for aerosol products, food, household consumables, pet food, nutritional products. Goldman Sachs & Co. (NYSE: GS) and Skadden, Arps, Slate, Meagher & Flom LLP are advising Ball. Latham & Watkins is representing Platinum Equity.
Twitter Inc. (NYSE: TWTR) has acquired Smyte, a technology that focuses on safety, spam and security issues. The target was previously backed by Avalon Ventures, Baseline Ventures, Founder Collective, Harrison Metal, Upside Partnership and Y Combinator.
Rental services provider WillScot Corp. (Nasdaq: WSC) is buying Modular Space Corp. for about $1.1 billion. The target offers office trailers and portable storage units. Rothschild Inc., Barclays Capital Inc., Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Morgan Stanley & Co. (NYSE: MS) and Oppenheimer & Co. are advising Williams. Moelis & Co. (NYSE: MC) is advising ModSpace.
Joshua Green Corp.-backed Sage Fly Fishing, a subsidiary of Far Bank Enterprises, has bought Fly Water Travel, a travel company that focuses on fishing trips. Far Bank produces fly fishing rods, reels, fly lines and apparel.
Cornell Capital has raised $1.325 billion for its debut multi-asset PE fund. The firm focuses on the consumer, energy, financial services and industrials sectors. Cornell was formed in 2013 by Henry Cornell, the former vice chairman of Goldman Sachs‘ merchant banking division.
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.
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.