M&A wrap: Angelo Gordon, T-Mobile, Sprint, Gryphon, Trilantic, Wind Point, Levine Leichtman, Manufacturing M&A
Alternative investment firm Angelo Gordon & Co. has raised its flagship distressed and corporate special situations credit fund at $1.8 billion. The fund "employs an all-weather investment approach designed to generate attractive risk-adjusted returns in any market environment." Angelo Gordon's credit business focuses on middle-market direct lending, consumer debt, liquid credit along with distressed and special situations. "Our solutions-based, partnership approach is differentiated, and we are committed to using our capital, creativity and scale to help companies and drive performance for our investors," says Ryan Mollet, Angelo Gordon's global head of distressed and corporate special situations. Global debt fundraising is on the rise, as funds look for alternative investments to park their excess capital. Middle-market loans aim to provide returns on investments in the high single-digit to low double-digit range. The average private debt fund size reached over $1.4 billion in 2019, the largest number on record, according to PitchBook's H2 2019 Global Private Debt Report, while dry powder rose above $240 billion. Global private debt fundraising reached almost $126 billion across 89 funds in 2019. Direct lending accounted for about $72 billion, or nearly 57 percent of global capital raised in 2019.
Manufacturing in the U.S. has contracted to its lowest level in more than a decade. The Institute for Supply Management said that its manufacturing index fell in December 2019 to 47.2. That’s its lowest level since June 2009, when it hit 46.3. This, in addition to a tight labor market, China’s retaliatory tariffs and the upcoming presidential election, has made manufacturing a tricky sector to do business in these days. Still, despite some of the headwinds facing the manufacturing industry, the M&A deal market remains active. Interest rates are low, and companies as well as investors have cash to invest. Additional factors come into play, including the need for consolidation and globalization in the manufacturing industry. Robots are playing a role as well, and manufacturing automation has become appealing. “The tight labor market and increasing wages have led us to pursue a number of different initiatives at our companies to counteract the resulting pressures created,” says Brad Roberts, a partner with the Riverside Co. “Where economical, we are investing in increased automation to enable us to meet growing sales volume amidst this difficult hiring environment.” Read our full coverage: 5 trends driving manufacturing M&A.
T-Mobile US Inc. won court approval for its $26.5 billion takeover of Sprint Corp. (NYSE: S), defeating a state-led lawsuit that sought to block the industry-altering wireless deal. The decision by a district judge in Manhattan is a huge win for T-Mobile and its owner Deutsche Telekom AG, as well as SoftBank Group Corp., Sprint’s parent. The combined company, which will operate under the T-Mobile name, will have a regular monthly subscriber base of about 80 million. T-Mobile wins court approval for $26.5 Billion sprint deal.
Infosys (NYSE: INFY) is buying Simplus for $250 million. The target advises on implementation, data integration and also offers training services for Salesforce quote-to-cash programs. "This acquisition is key to staying relevant to the digital priorities of our clients and demonstrates our commitment to the Salesforce ecosystem," says Infosys chief operating officer Pravin Rao.
Gryphon Investors is investing in Pacur, a supplier of plastic packaging materials for the medical device industry. Wells Fargo Securities and Koley Jessen. are advising the target. Kirkland & Ellis and WIlliam Blair are advising Gryphon.
Trilantic North America has acquired Gorilla Commerce. The latter operates a direct-to-consumer home and pet product development platform. Kirkland & Ellis advised Trilantic, while Lincoln International advised Gorilla.
Wind Point Partners-backed A&R Logistics has acquired bulk liquid transportation company First Choice Logistics. Kirkland & Ellis and KPMG advised A&R. Wells Fargo Advisors and Hinshaw & Culbertson advised First Choice.
Levine Leichtman Capital Partners-backed Smith System Driver Improvement Institute has acquired Driver's Alert. The target offers fleet management safety services, including online safety training, data management and risk identification tools.
One Equity Partners-backed the W.W. Williams Co. has acquired CP Co. The latter sells cold storage equipment and related parts.
Oval Partners and Flex Technology Group have invested in Ultrex Business Solutions, a managed print, IT services and information management company.
Incline Equity Partners has invested in healthcare supplies distributor ASP Global.
Mountaingate Capital-backed Bounteous has bought digital marketing agency the Archer Group.
There were 439 deals worth over $130 billion in the fintech sector in 2019, according to Hampleton Partners. Some notable transactions include Fidelity’s acquisition of Worldpay at $44 billion and Fiserv's $22 billion purchase of First Data. "With large technology companies knocking at their doors, incumbent financial institutions must continue to engage aggressively with fintech disruption, whether by building their own capabilities; by partnering; or by acquiring, given the pace of innovation in the sector," says Hampleton director Jonathan Simnett.
Irina Adler was hired by investment bank PJ Solomon as a managing director, where she is concentrating on the retail and consumer sectors. She was most recently with Morgan Stanley.
Scott Cohen and Robert Cardone have joined law firm Shearman & Sterling as partners where they are focusing on M&A. They were both previously with Jones Day.
Michael Weiss and Niall McComiskey have been promoted to managing partners at private equity firm Greenbriar Equity Group.
Artificial intelligence in healthcare saw about $4 billion in funding across 367 deals in 2019, according to data and research firm CB Insights. Amazon.com Inc. (Nasdaq; AMZN) is no exception. The tech conglomerate is using its recent deals for Health Navigator and PillPack to launch new software services in healthcare. Health Navigator works with companies like Microsoft Corp. (Nasdaq: MSFT) in offering services such as remote diagnoses, and with triage to help patients figure out whether to stay at home, see a doctor or go straight to the emergency room. Read our full coverage: How Amazon is using M&A to revolutionize healthcare.
Pushed by a groundbreaking California law mandating it, more companies are putting women on their public corporate boards. The law faces pressure in court and may not stand, but its rippling effect has already started to increase the visibility and awareness of the important benefits of board diversity. Investors are taking notice and trying to get ahead of the curve. According to a study published by MSCI in March 2018, having three or more women on a company’s board of directors translates to a 1.2 percent median productivity above competitors. Read the full guest article by Venable's Belinda Martinez Vega: Why businesses are adding women to their boards.
If there’s anything M&A professionals dislike, it’s uncertainty. And heading into 2020, there’s more than enough uncertainty to go around, including questions about the economy, international trade, impeachment, domestic politics and more. The funny thing is, the lack of clarity may actually make the first half of the year a great time for M&A, as dealmakers push to close transactions before the looming uncertainty of Election Day and its outcome. We conducted interviews with 8 investment bankers and other M&A advisors. Some said the first half of the year will be robust, while others said the uncertainty may have a negative impact throughout 2020. Read the full story, What’s ahead for M&A in 2020? We ask 8 advisors.
Mergers & Acquisitions examines the impact of 7 technologies on M&A in the retail sector. Read the whole series:
Overview: Retail Tech M&A: 7 Technologies Driving Change
Retail Tech M&A #1: Nike, McDonald's, PayPal, add customization, IoT
Retail Tech M&A #2: Why Walmart and other retailers are buying artificial intelligence startups
Retail Tech M&A #3: Amazon leads race to build fulfillment centers
Retail Tech M&A #4: Do robots fill orders faster?
Retail Tech M&A #5: Voice recognition gives retailers more ways to communicate
Retail Tech M&A #6: Data improves customer service
Retail Tech M&A #7: Demand for convenience drives growth in mobile ordering
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 Influenital Women in Mid-Market M&A. For each, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.
ACG New York is hosting the 12th annual healthcare conference and bourbon tasting at the Metropolitan Club in New York on Feb. 27.
ACG Raleigh Durham's 18th annual capital conference is being from March 31-April 1 at the Raleigh Marriott Crabtree Hotel in Raleigh, North Carolina.
InterGrowth 2020 is taking place at the Aria Resort & Casino in Las Vegas from April 20-22.