M&A wrap: Akamai, Janrain, LLR, Thoma Bravo, Wind Point

tomelighton

Akamai Technologies (Nasdaq: AKAM) has acquired cybersecurity provider Janrain. The target helps protect businesses from cyberattacks by securing their websites and digital presence. "Adding identity management to the Akamai Edge will provide an added layer of security for our customers," says Akamai CEO Tom Leighton (pictured). "With our acquisition now complete, we can work towards providing them with a sophisticated identity management solution, enabling trusted digital experiences for their end users." As companies continue to adopt cloud technologies and digitize their businesses, web security and identity awareness have become increasingly critical to keeping businesses secure. Demand for new and improved offerings has created a healthy appetite for M&A with cybersecurity-related companies. LLR Partners invested in PhishLabs; Thoma Bravo-backed Centrify; and Zix Corp. (Nasdaq: ZIXI) is buying AppRiver from Marlin Equity Partners.

Deal activity in the U.S. middle market exceeded $400 billion in 2018, the first year to achieve the milestone, according to a report by PitchBook. Dealmakers closed 2,971 transactions in the middle market (defined by deals worth $1 billion and less) with a total deal value of $427.9 billion. The activity represents an increase of about 15 percent in both volume and value from the previous year. "A sustained market appetite for high-yield bonds and leveraged loans led to an easy financing environment in which dealmakers were able to attain attractive pricing for deal financing," writes private equity analyst analyst Wylie Fernyhough. On a cautionary note looking forward, he points out that, "attitudes began to change in the fourth quarter, as the leveraged loan market—which has swollen in size since the financial crisis—saw downward swings in pricing." For more analysis on dealmaking in 2018, see Companies confident about M&A in 2019 after great 2018 and M&A soared in 2018; Autodesk, Hershey, Stryker closed notable deals.

Mergers & Acquisitions seeks nominations for the 12th Annual M&A Mid-Market Awards, which will honor leading dealmakers and deals that set the standard for transactions in the middle market in 2018. The deadline for nominations is end of day Friday, February 8, 2019. Click here to submit nominations. To determine the winners, Mergers & Acquisitions considers a variety of factors. We look for companies and individuals who overcame the challenges the year brought, embodied the trends of the period and took their businesses to the next level. Market leadership and performance are important, but league tables aren’t everything. Growth counts for a lot, especially when the rate of growth outpaces peers and the overall industry. Innovation also counts. We value companies that businesses. Thought leadership in the industry is also relevant. Looking at past winners provides a good guide to what we’re seeking. Last year’s winners included Campbell Soup, Huron Capital, Idera, LLR Partners, McGuireWoods, Stryker, Twin Brook and William Blair. For more information, read the full story: Call for Nominations: 12th Annual M&A Mid-market Awards.

Deal news
Wind Point Partners is acquiring and merging Clock Spring Co. and Neptune Research LLC from Palm Beach Capital. Both companies offer repair and rehabilitation products for global critical infrastructure. The combined will be called ClockSpring. Kirkland & Ellis and KPMG are advising Wind Point. Antares, Hartford Investment Management Co., Solar Capital, Northwestern Mutual Capital, and Nuveen Private Markets are providing financing.

EQT Partners has purchased Osmose Utilities Services Inc. from Kohlberg & Co. The target provides inspection, maintenance and restoration services for utility and telecom infrastructure in the U.S. Kirkland & Ellis advised EQT. Goldman Sachs & Co. (NYSE: GS), Harris Williams and Ropes & Gray advised Osmose.

Spire Capital has invested ERI Solutions, a provider of regulatory compliance and business risk services. Dentons US LLP advised Spire. Hinkle Law Firm advised ERI.

Pharos Capital-backed Beacon Specialized Living Services has bought Owakihi, which offers home and community-based support services to individuals with intellectual and developmental disabilities. The Braff Group advised Owakihi.

Pritzker Private Capital has acquired KabaFusion, a provider of acute and home infusion services.

Avalara Inc. (NYSE: AVLR) has purchased Compli, a provider of compliance services, technology, and software to producers, distributors, and importers of alcoholic beverages in the U.S.

Tarik Freitekh is has acquired a $1 billion stake in China's BYD. BYD is building new battery production capacity to take advantage of China’s aggressive new energy vehicle push.

Featured content
Technology permeates many of today’s private equity deals, and PE 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. “Technology, in and of itself, is invading every end market, and it is driving companies to be more competitive than their peers,” points out Richard Lawson, CEO of tech-focused PE firm HGGC. As PE firms consider the tech landscape, they are watching Amazon.com Inc. (Nasdaq: AMZN) closely. “We are always thinking about how we can help companies that are going to get dislocated and disintermediated by Amazon,” says Lawson. “End markets everywhere are being changed by Amazon. As Amazon scales, it will challenge all kinds of industries and it will have a cascading effect across all sectors. You are already seeing more companies trying to connect their brands with consumers in new ways.” 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.

Related: 10 private equity firms share strategies for tech M&A.

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. "Actively lobby and ask from day one to work on deals, so you can gain dealmaking experience early in your career," advises Bradley. "Too often, women are steered into functions like marketing, business development, and investor relations – the 'softer side' where it is easier to place a female. The excuse often used is that the females don’t have the deal experience of their male counterparts. That is why you must be an advocate for yourself and work on deals from the very beginning."

Related: Meet the 2019 Most Influential Women in Mid-Market M&A.

Mergers & Acquisitions asked leading dealmakers about their outlook for the middle market in 2019. Watch the video conversations, shot at ACG Philadelphia's M&A East: It is a seller's market, and deal activity is expected to remain steady, says Ramsey Goodrich of Carter Morse & Goodrich: Outlook 2019: Great time to sell. Private equity firms and strategic buyers will use their excess cash and capital to look for deals, says Bharat Ramprasad of Stifel Nicolaus: Outlook 2019: Excess capital to fuel M&A. Rising interest rates and regulatory changes may increase volatility, cautions Mark Emrich of Murray Devine: Outlook 2019: Keep an eye on rising interest rates.

The New England Patriots and the Los Angeles Rams will face off in the Super Bowl. Off the field, Patriots quarterback Tom Brady recently teamed with former Giants defensive end Michael Strahan, who is the co-host of ABC’s Good Morning America, to launch a sports media startup called Religion of Sports Media. Muhsin Muhammad, who played wide receiver for the Carolina Panthers and the Chicago Bears, is a managing director of private equity firm Axum Capital Partners. Steve Young, former San Francisco 49ers quarterback, is a co-founder of private equity firm HGGC. Check out: NFL stars Tom Brady, Michael Strahan, Steve Young go PE.

Events
Exponent Women kicks off the new year with an evening of networking on Jan. 24 at The Campbell, at New York's Grand Central Terminal. Jazz Age financier John W. Campbell converted the space to his private office and reception hall in 1923, and it has recently been restored by design firm Ingrao Inc.

ACG Boston, ACG Connecticut, ACG New Jersey, ACG New York & ACG Philadelphia host ACG Northeast Dealmaking at the Mountain at Stowe Mountain Resort in Stowe, Vermont Jan. 27-29. The event provides a chance for middle-market M&A professionals from across the northeast to come together for two days of close knit networking, shared conversations and valuable time spent to deepen your relationships within the deal community.

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