M&A wrap: Amazon; Walmart; Ikea; Bed, Bath & Beyond; SAP; Veritas; Athenahealth

retailmall
Crowd in the mall

The pressure on the retail sector has only increased in the year following Amazon’s purchase of Whole Foods in late 2017, and Sears’ recent bankruptcy filing is a cautionary tale. “Many of the challenges that retailers are currently facing are due more to a lack of innovation and investment in technology, and that they are not able to compete with Amazon,” said Alex Monahan, a consumer products senior analyst at tax and consulting firm RSM US LLP. “Investors want to see that retailers are adjusting to consumer’s changing preferences and striving to provide seamless multi-channel experiences, while also investing in technology to address the tight labor markets.” Amazon, Walmart, Ikea, Bed, Bath & Beyond and Farm Boy are among the retailers turning to M&A. For full coverage, see 5 trends driving retail M&A deals.

Deal news
SAP SE is making its largest acquisition yet as it battles rivals, including Salesforce.com Inc. (NYSE: CRM), to sell software to clients who are increasingly interested in tools that help them understand their customers. The $8 billion purchase of Qualtrics International Inc., which develops software that gathers and analyzes data, is meant to strengthen SAP’s offering in the customer relations management sector, reports Bloomberg News. Read the full story: SAP buys Qualtrics in its largest deal ever.

Private equity firm Veritas Capital and Elliott Management Corp. will acquire Athenahealth Inc. (Nasdaq: ATHN) for $5.7 billion. After the deal closes, Athenahealth will be combined with Virence Health, Veritas’s health-care services company, the firms said. Virence offers hospitals and physician practices services to manage their revenue and workflow. Read the full story: Veritas, Elliott, buy Athenahealth, after getting pushed to sell.

Celestica Inc. (NYSE: CLS) has acquired display equipment manufacturer Impakt Holdings from Graycliff Partners for $329 million.

The Riverside Co.-backed Mintra Group bought e-learning company Atlas Knowledge Ltd. Addleshaw Goddard, Advocatenkantoor Parmentier and BDO advised Mintra and Riverside. Houlihan Lokey Inc. (NYSE: HLI) and Dickson Minto advised Atlas.

PPC Partners is buying Plaskolite LLC, a provider of thermoplastic sheet products, from Charlesbank Capital Partners. William Blair is advising PPC Partners.

PWP Growth Equity has invested in Quick Med Claims, a medical technology provider to the emergency medical transport industry.

Genstar-backed Mercer Advisors has acquired wealth management firm Sigma Investment Management Co.

For more deal announcements, see The weekly wrap: CommScope, CVC, ResMed.

For ongoing coverage of private equity fundraising efforts, see our weekly column, PE fundraising scorecard: Genstar and ParkerGale.

People moves
Lisa Suennen was hired by Manatt, Phelps & Phillips where she is leading the firm's digital and technology business group and the firm's venture capital fund. Suennen was previously with Venture Valkyrie and GE Venture's healthcare venture fund.

Gregg Byers was hired by Baird as a managing director. Baird was most recently with PricewaterhouseCoopers and focuses on oil M&A.

Daniel Gottfried has joined Day Pitney as a partner, where he is serving as chair of the firm's international transactions practice. Previously with Hinckley Allen, Gottfried focuses on tax matters related to private equity, investment funds and family offices.

Featured content
The private equity industry will focus on educating lawmakers newly elected in the mid-terms. “As an industry, we will work to educate the nearly 100 new members of Congress about private equity’s positive impact in their communities and their constituents’ lives,” Pam Hendrickson, the chief operating officer of middle-market private equity firm the Riverside Co., tells Mergers & Acquisitions in a Q&A. “We will be talking with them about jobs, investment, and retirement security. We need to make the personal case to each of the new members as well as top leadership in both the House and the Senate. As an example, the incoming chair of the Ways and Means committee Richie Neal is from the State of Massachusetts which had a 15.4 percent annualized return from its PE portfolio over 10 years.” Hendrickson is currently a member of the board of the American Investment Council and a member of the advisory board of the Kenan Institute for Ethics at Duke University. In the past, she has testified before Congress on behalf of the private equity industry. Read the full interview: Post-election priority for private equity: educating 100 new members of Congress. For more on how the mid-term election results are playing out in the middle market, including how former PE professionals Mitt Romney, Bruce Rauner and J.B. Pritzker fared Tuesday night, see Dealmaker’s post-election guide: Mitt Romney, J.B. Pritzker, Dodd-Frank, Pam Hendrickson, Gretchen Perkins.

U.S. middle-market dealmaking in the first three quarters of 2018 surpassed the same period in 2017, according to PitchBook. If the pace continues in the fourth quarter, middle-market deal value may surpass $400 billion for the first time ever. One important question: Will the momentum continue now that the power has shifted in Congress? Mergers & Acquisitions asked Matthew O’Loughlin, partner and co-chair of the mergers and acquisitions practice with Manatt, Phelps & Phillips LLP, to share his thoughts on how the mid-term elections will affect M&A. Read the full story: It's been a good year for M&A. Will momentum continue post election?

Mergers & Acquisitions asked Dan Shea, a managing director at BDO Capital Advisors, to share his thoughts on the election results. Read the full story: Infrastructure investment is an area of potential agreement in Washington.

Mergers & Acquisitions asked Michael Gruber, managing partner at Salveo Capital, to share his thoughts on how the mid-term elections will affect M&A and the cannabis sector. Read the full story: Cannabis investments will likely benefit from new House leadership, Jeff Sessions' departure.'

Mergers & Acquisitions identifies 15 cities as fertile communities for dealmaking. We look at metropolitan areas from Austin (where Michael Dell launched a PC business out of his dorm room back in the day and where thousands gather every year for SXSW) to St. Louis (home of private equity firm Thompson Street Capital Partners). Be sure to check out Milwaukee (with private equity firm Robert W. Baird & Co. and investment bank Clearly Gull) and Minneapolis (home of strategic buyers 3M, Best Buy, General Mills, Hormel and Target). And don’t forget Boston, Chicago, New York, San Franciscoand Los Angeles and more. See our list, Dealmaker's guide to 15 cities where M&A thrives.

The New York Giants take on the San Francisco 49ers Monday night to wrap up NFL Week 10. Off the field, football stars team to build companies. New England 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, which has raised $3 million in venture capital funding from CourtsideVCand Advancit Capital. Many NFL players invest in companies. 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. Mergers & Acquisitions takes a look at star players who invest in companies through private equity, venture capital and other investment vehicles.

Events
ACG Florida Capital Connection, held Nov. 12-14, at the Vinoy Renaissance St. Petersburg Resort & Golf Club, puts “sun and fun” into dealmaking for the middle market, bringing together hundreds of dealmakers. The keynote speaker is Forbes Media CEO Steve Forbes, and the featured speaker for the Women’s Forum is Valerie Crites Fowler, who served as a diplomat in the U.S. Foreign Service for over 29 years, reaching the rank of Minister Counselor in the Senior Foreign Service.

Middle Market Week, hosted by ACG New York and held Nov. 26-30 at various locations throughout New York, brings together leading global middle-market dealmaking professionals to develop and enhance their dealmaking activities, strengthen their long-term relationships, and provide numerous opportunities for networking all week long. Mark your calendar for the Private Equity Annual Wine Tasting Gala on Nov. 28 at Gotham Hall. The building was constructed in the 1920s as the headquarters of the Greenwich Savings Bank. The gala brings together the leading middle market private equity firms for an evening of fine wines and networking.

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