M&A wrap: Alibaba, Jack Ma, Cainiao, Amazon, Butterfly, OTPP
Alibaba Group Holding Ltd. will spend $3.3 billion to raise its stake in Cainiao, in an effort to exert more control over the logistics subsidiary that underpins its sprawling e-commerce empire. Alibaba will raise its stake in Cainiao to 63 percent from 51 percent by subscribing for newly issued shares in its latest financing round and buying existing stock from another holder, the company said. Cainiao is the rapidly growing business that sits at the heart of Alibaba’s expansion, both in China and abroad. It oversees a coterie of at least a dozen shipping partners, orchestrating deliveries carried out by millions of people across the country. The increased stake could help Alibaba expand deeper into the business of setting up and controlling its own infrastructure, much like Amazon.com Inc. (Nasdaq: AMZN). Billionaire Jack Ma previously said he wanted to invest 100 billion yuan ($14 billion) in logistics without giving a time frame. Cainiao’s revenue, after elimination of inter-company transactions, rose 48 percent to 4.8 billion yuan in the quarter ended September. The logistics giant is expanding at a rapid clip, keeping pace with its parent’s online retail business. It’s developed a neighborhood delivery service with a combination of stations and self-pickup lockers, known as Cainiao Posts, a key to bolstering last-mile delivery. The daily package volume handled by Cainiao Post doubled in September, compared with last year, according to Alibaba’s filings. Read the full story Bloomberg News: Alibaba raises stake in delivery arm.
Butterfly Equity is buying a majority stake in Orgain, a maker of nutrition products, including protein powders, shakes and bars. Ontario Teachers' Pension Plan is taking a minority stake in the target. Kirkland & Ellis LLP is representing Butterfly. Piper Jaffray (NYSE: PJC) and the Giannuzzi Group are advising Orgain.
DXC Technology (NYSE: DXC) has acquired IT services company Virtual Clarity.
Phoenix Property Investors, a private equity firm that invests in real estate in Asia, has raised its sixth fund at $1.15 billion. Monument Group served as Phoenix's placment agent.
For more on fundraising, see PE fundraising scorecard: Acon, Engaged Capital, Neuberger Berman.
For more deal news see , Weekly wrap: Google, Harvest Partners, Olympus.
Esteemed M&A attorney Martin (“Marty”) Lipton was honored at a black-tie event hosted by the Institute of International Education at The Pierre in New York on Oct. 30. Called the “the king of M&A,” the co-founder of New York law firm Wachtell, Lipton, Rosen & Katz, is well known to dealmakers as the architect of the anti-takeover defense strategy known as the “poison pill.” Lipton was awarded the IIE Stephen P. Duggan Award for Mutual Understanding “in recognition of his lifetime of extraordinary achievement and his lasting contribution to international higher education. Read the full story: Martin Lipton, inventor of the “poison pill” anti-takeover defense honored by IIE.
The private equity model has held up very well over the decades, continuing to outperform the public markets, even as economic cycles come and go. But the rate of growth has slowed, leading PE firms to seek adjacent areas of business to expand. As PE firms face increased pressure to produce higher returns on their investments, many of them are turning to a familiar area of business: lending. Adams Street Partners, Balance Point Capital, Carlyle and VSS are all actively engaged in lending. Read the full story: Private equity firms are becoming lenders. Here’s why.
Bank M&A has been soaring, creating the perfect backdrop for Piper Jaffray’s announced acquisition of Sandler O’Neill & Partners LP. “There has been a lot of consolidation in the bank space,” Piper Jaffray CEO Chad Abraham told Mergers & Acquisitions. “But there are still 5,000 banks, and we expect the pace of consolidation to continue.” For analysis of the deal, see Counting on bank M&A: Why Piper Jaffray bought Sandler O'Neill.
Looking for a glimpse of what’s to come in the private equity industry? Meet Mergers & Acquisitions' 2019 Rising Stars of Private Equity. As the PE industry undergoes a generational shift, and many firm founders retire, it’s well worth getting to know these emerging leaders, including Branford's Austin Collier, Sterling Partners' Shawn Domanic and Summit Partners' Sophia Popova. For profiles and video interviews, see Meet Mergers & Acquisitions' 2019 Rising Stars of Private Equity. For Q&As, see 10 Rising Stars of Private Equity tell their tales.
To celebrate deals, dealmakers and dealmaking firms, Mergers & Acquisitions produces three special reports every year: the M&A Mid-Market Awards; the Rising Stars of Private Equity; and the Most Influential Women in Mid-Market M&A. For more on the timeline and nomination process for each, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.
The Third Annual Women in Alternative Investments Career Forum is taking place at the New York Hilton on Nov. 8.
ACG New York is hosting Middle Market Week in New York from Nov. 11-15. The 17th Annual Private Equity Wine Tasting Gala takes place on Nov. 13 at Gotham Hall.
Exponent Women is hosting a Family Office Event with Owens Group at LX Gallery in New York on Nov. 21. Mergers & Acquisitions editor-in-chief Mary Kathleen Flynn is moderating a panel.