M&A wrap: KPMG, Houlihan, William Blair, ACI, Western Union, Speedpay
Mergers & Acquisitions profiles the top 28 investment banks of 2018, with KPMG, Houlihan Lokey, Goldman Sachs (NYSE: GS), William Blair and Lincoln International ranking as the five most active in M&A. The list is based on volume of completed deals, with PitchBook as the data provider. It was a good year for dealmaking, with activity in the U.S. middle market exceeding $400 billion, the first year to achieve the milestone.
ACI Worldwide (Nasdaq: ACIW) is buying Speedpay, Western Union Co.'s (NYSE: WU) U.S. bill pay business for $750 million. Speedpay provides electronic bill presentment and payment services. The target generated about $350 million in revenue in 2018. ACI and Speedpay will serve more than 4,000 customers in the U.S. across the consumer finance, insurance, healthcare, higher education, utilities, government and mortgage sectors. “This acquisition reinforces ACI’s ‘any payment, every possibility' vision and accelerates our ability to capitalize on the growing global payment transaction opportunity over the next five years," says ACI CEO Phil Heasley. Consumer adoption of digital and mobile payments is driving growth in the U.S. bill pay sector. Cards and cashless transactions are among the biggest growth drivers in the payments industry, and that is driving M&A. Online food ordering company Grubhub Inc. (NYSE: GRUB) agreed to buy LevelUp, a provider of payment processing technology for restaurants, for $390 million in 2018. Advisors to ACI include: Bank of America and Jones Day. Advisors to Western Union include: Centerview Partners and Sidley Austin.
Marlin Equity Partners has purchased Worksoft. The target's automation services allows customers to conduct automated business process discovery, test creation and execution, analytics and documentation of cross-application workflows that support processes. Advisors to Worksoft include: Shea & Co. and Munsch Hardt Kopf & Harr. Goodwin Procter represented Marlin, and Varagon Capital Partners provided financing.
Ardian has made a $341 million investment to build a wind farm in Åndberg/Härjedalen, Sweden. The firm acquired the development rights for the project from OX2. Newsec, Vinge and Grant Thornton advised Ardian. DLA Piper advised OX2.
Related: Read Ardian's guest article: Digital disruption is transforming infrastructure deals.
Ring Energy Inc. is buying Wishbone Energy Partners' North Central Basin platform assets for $300 million. SunTrust Robinson Humphrey and Baker Hostetler are advising Ring.
Wynnchurch Capital has acquired Mid-America Fittings Inc., a manufacturer of industrial valves and fittings.
The Private Equity Women Investor Network (PEWIN) has announced that four of its members have recently raised new funds totaling $1.5 billion: Luminate Capital Partners founder Hollie Moore Haynes ($430 million); ParkeGale co-founder Kristina Heinze ($375 million); Scale Venture Partners co-founder Kate Mitchell ($400 million); and 1315 Capital founder Adele Oliva ($300 million). Nine out of ten private equity fund managers are male, points out PEWIN, "so these successes represent notable progress." PEWIN is a global organization with more than 600 members, representing institutions with over $2.5 trillion in assets under management. Mergers & Acquisitions named Haynes and Heinze on our list of 36 female dealmakers, The 2019 Most Influential Women in Mid-Market M&A.
Lorne Cantor and Evan Kanter were hired by law firm Jones Day as partners. They were both recently with Greenberg Traurig and concentrate on M&A.
David Golde was promoted to managing director, and Ben Marshall and David Graham were promoted to director at PE firm Genstar Capital. Golde joined the firm in 2015, Marshall joined in 2014 and Graham joined in 2017. Tech-focused Genstar recently raised its ninth fund at $7 billion.
Anton LeRoy was promoted from chief operating officer to president at financial services firm BTIG, and Jennifer Mermel was promoted from chief of staff to COO at the same firm.
Mark Mandel has joined Baker McKenzie. He was previously with Milbank, Tweed, Hadley & McCloy, and focuses on M&A.
Scott Metzger was hired by Gryphon Partners-backed environmental and emergency response services company Hepaco as chief operating officer. Metzger was most recently with Clean Harbors.
Aimen Mir has joined law Freshfields Bruckhause Deringer as the leader of the firm's CFIUS practice. Mir previously served as CFIUS staff chair and deputy assistant secretary for investment security at the U.S. Department of the Treasury.
Technology M&A is thriving, and private equity firms are hot on the trail of innovations that will drive sustainable value to customers and make companies more efficient, more effective and less expensive to run. Among the developments appealing to PE investors are: artificial intelligence, data management, data virtualization, digital marketing, healthcare IT, industrial automation, the Internet of Things, machine-to-machine learning, payment processing and Software-as-a-Service. To gain more insights into what kinds of tech deals will dominate the field in 2019, Mergers & Acquisitions reached out to 10 private equity firms that are active investors in technology: Francisco Partners, Genstar, Great Hill, HGGC, Insight, LLR, Riverside, Silver Lake, TA and Vista.
In Mergers & Acquisitions' annual look at strategic buyers, we see significant deals aimed at enhancing the customer relationship, including Amazon.com Inc.'s (AMZN) purchase of PillPack, Nike Inc.'s (NYSE: NKE) acquisitions of Invertex Ltd. and Zodiac Inc. and Target Corp.s' (NYSE: TGT) acquisition of Shipt. Technology plays a key role in many transactions. But while technology is enabling developments, it’s not an end unto itself for many corporations. Instead, strategic buyers are using innovations as a means to achieve goals. Based on analyzing hundreds of recent deals, Mergers & Acquisitions has identified seven goals corporate dealmakers hope to accomplish through M&A transactions today: Integrate data with software; improve the customer experience and relationship; expand and improve distribution; process payments more efficiently; leverage tech trends, like autonomous vehicles; make manufacturing processes more efficient; and achieve better outcomes and efficiencies in healthcare. “Strategics have been really active,” says John Neuner, managing director, Harris Williams. “They are aggressive in pursuing the assets they want, as long as it fits within their strategy. Scale is critical to them, and they have to meet consumer demands by adding new capabilities.”
"There's a lot of capital chasing deals, both from the private equity community and strategic buyers across sectors," says Delance Street Partners' David Allebach, in this video shot at ACG Philadelphia's M&A East conference. Watch the video: Why buyers have to pay more for quality targets.
"Companies that are inclusive and also diverse tend to outperform companies that aren't,"says investor Lorine Pendleton of Pipeline Angels and Portfolia in a video interview shot at Exponent Exchange, a gathering of 200 female dealmakers hosted by Exponent Women. Pendleton looks to invest in companies led by diverse entrepreneurs, which she defines as entrepreneurs of color, LGBT entrepreneurs, women, veterans, and disabled entrepreneurs. She also backs companies that have products and services that cater to those markets. "People think that they are niche markets, but they're actually growing in terms of spending dollars and market size."
Related: M&A Insights: Inclusion investing, a video interview with Lorine Pendleton.
Mergers & Acquisitions has named 36 leaders the 2019 Most Influential Women in Mid-Market M&A, including Kainos Capital's Sarah Bradley, Kayne Anderson Capital Advisors' Nishita Cummings and Pelham S2K Managers' Venita Fields. All 36 are outstanding dealmakers both inside and outside of their firms. This year, we asked the featured dealmakers to tell their own stories through Q&As, including their advice for women.
Mergers & Acquisitions has closed the nomination process for the 2018 M&A Mid-Market Awards. We look forward to announcing the winners in March. The Awards are one of three special reports we produce each year to celebrate deals, dealmakers and dealmaking firms. The other two are The Rising Stars of Private Equity and The Most Influential Women in Mid-Market M&A.
ACG New York hosts the 11th Annual Healthcare Conference at the Metropolitan Club in Manhattan on Feb. 28. Dealmakers network with healthcare-focused private equity investors and other industry professionals.
ACG Minnesota and Corvus North are hosting AIM: A Women's Leadership Conference at the Minneapolis Hyatt on March 7. The conference is designed to support and encourage female leaders to grow and achieve success throughout their career journeys.
ACG Philadelphia is hosting its 2nd annual Industry Tour focused on SaaS & Tech-Enabled Services on March 12 at the Union League of Philadelphia. Last year's event brought together 200 PE investors, investment bankers, operating companies and industry advisors from around the country.
The Women's Private Equity Summit will be held at the Monarch Beach Resort in Dana Point, California, March 13-15. The Summit will bring together more than 550 female professionals in private equity and venture capital.
ACG New York's Women of Leadership is hosting a golf event and reception on March 21 at Konnect Golf in Manhattan. The event brings together female dealmakers from private equity firms, investment banks and lenders.