M&A daily wrap: Tom Gores, Platinum Equity, Serena Williams, Daily Harvest, Francisco Partners, Blackstone, Goldman Sachs
Platinum Equity has closed the Platinum Equity Small Cap Fund LP, the Los Angeles private equity firm's first fund earmarked for lower middle-market investments. “Our core fund is moving upstream into larger deals," says Platinum founder Tom Gores. "But we don’t want to lose sight of smaller transactions where we can create real value. So it made sense for us to launch a lower middle market fund. Our roots in the lower middle market run deep and we have maintained a strong presence there." The $1.5 billion small cap fund is making operations-focused investments, in keeping with the flagship fund's approach. Gores founded Platinum in 1995, and the firm has raised four funds, with the most recent coming in at $6.5 billion. Platinum invests in the manufacturing, logistics, technology, media, and entertainment sectors. Platinum recently formed a joint venture with packaging company Ball Corp. (NYSE: BLL), called Ball Metalpack. Simpson Thacher & Bartlett represented Platinum on the fundraise.
Serena Williams has enjoyed a dazzling week at Wimbledon. Out of the grand slam game for 16 months as she started a family and seeded 25th, Williams fought her way into the finals, which will be played on July 14, with Duchess Meghan of Sussex and Catherine, Duchess of Cambridge, expected to watch from the All England Club's Royal Box. 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.
Blackstone' Group LP's (NYSE: BX) strategic capital group and Goldman Sachs asset management’s Petershill program have acquired minority stakes in Francisco Partners. The investment provides the San Francisco tech-focused private equity firm with capital to develop its platform while increasing commitments to its own funds and strengthening its alignment with limited partners. “We look to partner with differentiated businesses with their best years ahead of them, and we believe Francisco Partners is a perfect example of such a firm," says Goldman Sachs asset management managing director Robert Hamilton Kelly. For middle-market private equity firms, selling minority stakes is a path to raise capital for expansion of business lines and for some general partners to gain liquidity. Dyal Capital Partners, a division of Neuberger Berman, has been partiularly active, snatching up non-voting ownership interests in several PE firms including: H.I.G, KPS Capital Partners, Vector Capital, Vista Equity Partners and Silver Lake. Evercore Inc. (NYSE: EVR) and Kirkland & Ellis advised Francisco. Simpson Thacher represented Blackstone, and Fried Frank represented Goldman Sachs.
TA Associates acquired a minority stake in Prudent Corporate Advisory Services, an independent distributor of mutual fund and other wealth products in India. DSK Legal represented TA. Shardul Amarchand Mangaldas & Co. represented Prudent.
Main Post Partners-backed Fortis Solutions has acquired Lewis Label Products Corp., a manufacturer of pressure sensitive labels, shrink sleeves and flexible packaging products.
Datix Ltd. (a portfolio company of TA Associates) and RL Solutions, providers of healthcare quality and patient safety software, have joined forces to form a company in patient safety, quality, and infection prevention. Seyed Mortazavi, Datix CEO, will take over chief executive duties of the combined company. Sanjay Malaviya, RL's founder and CEO, will become executive chairman of the board.
For more deal announcements, read The weekly wrap: Brynwood Partners, Goldman Sachs, Thoma Bravo.
For more on PE fundraisng, see the PE fundraising scorecard: Aretex Capital, GenNx360, G Squared, Providence Equity.
Private equity firms are more active in the public sector than they were a couple of years ago, Brian Miller, the CFO of Tyler Technologies Inc. (NYSE: TYL), tells Mergers & Acquisitions. The company’s $150 million deal for data service company Socrata probably will not be the company’s last. Tyler has completed more than 40 acquisitions in the past decade. Read the full story: Tyler Technologies sticks with M&A strategy, despite PE competition.
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."
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.
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.