M&A daily wrap: record-breaking first half, Arsenal, IGM Resins, Astorg, Salveo Capital, cannabis

Worldwide M&A activity totaled $2.5 trillion of announced deals in the first half of 2018, an increase of 61 percent compared with the first half of 2017, making it the strongest first half in deal value since records began in 1980, according to Thomson Reuters. The second quarter of 2018 marks the sixth quarter to surpass $1 trillion in announced deals since 2015. Mega deals account for 50 percent of the total value, with transactions greater than $5 billion totalling $1.3 trillion, more than three times the levels seen in the same period in the previous year. The sectors that showed the most activity were: energy and power; media and healthcare. Not all the data told a positive story, however. In one sign of potential weakness, the number of announced deals dropped 10 percent, the lowest first-half volume since 2015.

Deal news
Arsenal Capital Partners, a New York private equity firm that invests in middle-market specialty industrials and healthcare business services companies, has completed the sale of IGM Resins, a manufacturer of materials used in ultraviolet coatings and inks, based in Waalwijk, the Netherlands, to Astorg, a private equity firm headquartered in Luxembourg, for undisclosed terms. IGM serves a diverse set of high-growth end-markets, including inks used in food packaging, electronics, optical coatings and adhesives. In 2012, Arsenal partnered with IGM founder John Huiberts to recapitalize the company and invest in its growth strategy. “We are proud of the transformation of IGM from a specialty chemicals distribution company to a leading global UV-cure technology provider," said Sal Gagliardo, Arsenal industry and operations partner. "During our partnership with the management team, we completed four strategic acquisitions and executed an aggressive organic growth strategy. Through these initiatives, the company has become the leading global producer of photoinitiators with the most comprehensive breadth of technologies serving high growth UV cure applications.” Moelis & Co. acted as exclusive financial advisor, and Jones Day acted as legal advisor to Arsenal and IGM. Houlihan Lokey and Emendo Capital acted as financial advisors, and Paul Hastings LLP and Dechert LLP acted as legal advisors to Astorg.

In private equity fundraising news, Thoma Bravo is raising $11.5 billion for its flagship Thoma Bravo Fund XIII, significantly more than the firm's previous flagship fund, which closed at $7.6 billion in 2016. For more, see our weekly column, PE fundraising scorecard: Clearview Capital and Thoma Bravo.

For more recent deal announcements, including acquisitions made by AT&T Inc. (NYSE: T) and Conagra Brands Inc. (NYSE: CAG), read The weekly wrap: AT&T, Conagra, Twitter.

Featured content
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.

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.

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 Wealth Management 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 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.