M&A wrap: Apollo, Matt Nord, David Sambur, Wells Fargo, Sagewind, Balance Point, Carlyle

mattnord
Matt Nord

Matt Nord (pictured) and David Sambur have been promoted from senior partners to co-lead partners of private equity at Apollo Global Management (NYSE: APO). Nord joined Apollo in 2003 and serves on the board of directors of ADT, Intrado, Lifepoint Health, Presidio and Exela Technologies. Sambur joined the firm in 2004 and he serves on the board of CareerBuilder, Coinstar LLC, ClubCorp, Diamond Resorts International Inc., EcoATM LLC, Mood Media, PlayAGS Inc., Rackspace Inc., Redbox Automated Retail LLC and Shutterfly. Before Apollo, both Nord and Sambur were members of Salomon Smith Barney's investment banking division. “These new appointments reflect Apollo’s deep reservoir of proven investment talent and lay the foundation for the firm’s next generation of leadership,” says Apollo CEO Leon Black. Add Apollo co-presidents Scott Kleinman and James Zelter: “Matt and David have been at the helm of numerous successful private equity transactions during their tenure at Apollo across an array of industries. They have also been very involved in the day to day operations of Apollo’s flagship private equity business and have established themselves as leaders from a strategy and culture standpoint." In addition, Dylan Foo was hired by Apollo as a senior partner and co-lead of the firm's infrastructure business. Foo was most recently with AMP Capital.

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. Middle-market loans offer a potential growth path for PE firms, Including Adams Street, Balance Point. Carlyle Group (Nasdaq: CG) and VSS , many of whom view credit as a natural extension of their bread-and-butter operations. Read our full coverage: Private equity firms are becoming lenders. Here’s why.

At Mergers & Acquisitions, we've begun work on one of our most popular projects of the year: the Most Influential Women in Mid-Market M&A. The deadline for nominations is Oct. 14. Last year, we honored 36 women, including Marilyn Adler (Medley Capital), Jennifer Cotton (Madison Capital Funding), Nishita Cummings (Kayne Anderson), Venita Fields (Pelham S2K), Jeri Harman (Avante Mezzanine Partners), Pam Hendrickson (the Riverside Co.), Gretchen Perkins (Huron Capital) and Trisha Renner (Baird). Who will make it on this year's list? To be considered, candidates must be women who are outstanding dealmakers both inside and outside of their firms. Evidence of influence in the broader M&A industry is essential. When nominating a candidate, please explain how she outperforms her colleagues at her firm and in the industry. Please provide examples of deals she has led, initiatives she has launched and other instances that show evidence of her influence in the middle market. An important guide to what we're looking for can be found in the dealmakers we've honored in previous years. See profiles of, and Q&As with, past honorees here.

DEAL NEWS
Ametek Inc. (NYSE: AME) is buying Gatan, a manufacturer of instrumentation and software that are used in electron microscopes, from Roper Technologies Inc. (NYSE: ROP) for $925 million. “Gatan is an outstanding company and nicely complements our existing portfolio of specialized offerings in high-end analytical instrumentation," says Ametek CEO David Zapico.

Sagewind Capital-backed By Light is buying Cole Engineering Services. The latter develops simulation-based systems for simple and complex military missions. Paul, Weiss, Rifkind, Wharton & Garrison LLP is advising the buyers.

Agriculture Capital Management has acquired Firestone Pacific Foods. The target manages frozen processing, packing and cold storage facilities. Cascadia Capital advised Firestone.

Alpine Investors-backed Apex Services Partners has invested in HVAC services company Southern Air Heating & Cooling. Apex plans to invest at least $100 million in equity in HVAC businesses.

DEAL TRENDS
PE mega-funds, those valued at $5 biillion and above, have outperformed smaller funds over the past 20 years by posting the highest internal rate of return average, according to Pitchbook. Across all fund sizes, PE mega-funds are the most likely to achieve total value to paid-in ratio (TVPIs) above 1.5 times. PE mega-funds have been most likely to outperform public indices when accounting for the performance drag of uncalled capital sitting in reserve accounts.

Observers predict the end of the year will be active in dealmaking. Among the deals that closed in August: Littlejohn's acquisition of Kaman Corp.'s (NYSE: KAMN) distribution business; Sealed Air Corp.'s (NYSE: SEE) purchase of Automated Packaging Systems; and Piper Jaffray's (NYSE: PJC) deal for Weeden & Co. Read the full story: Littlejohn's purchase of Kaman's distribution business among deals that closed in August.

PEOPLE MOVES
Wells Fargo & Co. named Charles Scharf chief executive officer, marking a new era in the bank’s efforts to turn itself around after a series of scandals claimed two previous CEOs in the past three years. Scharf, the CEO of Bank of New York Mellon Corp., will take over on Oct. 21, replacing interim CEO Allen Parker, the San Francisco bank said in a statement. Scharf will also hold the title of president. Read the full story: Wells Fargo names BNY Mellon’s Charles Scharf CEO to lead turnaround.

FEATURED CONTENT
It’s a milestone year for the Blackstone Group Inc. (NYSE: BX), which transitioned from a publicly-traded partnership to a corporation on July 1. Most recently, the New York firm announced on Sept. 11 the final close of its latest global real estate fund. With $20.5 billion of total capital commitments, Blackstone Real Estate Partners IX is the largest real estate fund ever raised. Mergers & Acquisitions spoke with Stephen A. Schwarzman, the firm’s co-founder, chairman and CEO, on the occasion of his new book, What It Takes: Lessons in the Pursuit of Excellence, published by Avid Reader Press/Simon & Schuster, and released on Sept. 17. Schwarzman, who is speaking at the Economic Club of New York on Sept. 18, shared his perspective on the private equity model, its resilience during recessions and how the industry has evolved over three decades. Read the full story: "Complete control" is the beauty of private equity, says Blackstone's Stephen A. Schwarzman.

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.” Piper Jaffray is determined to be the market leader in all the industries it does business in. The Minneapolis-based boutique investment bank currently dominates some of the sectors it serves, especially healthcare. With the acquisition of New York-based Sandler the renamed firm Piper Sandler will instantly become a leading investment bank in financial services, a sector Piper has sought to expand in for several years. For analysis of the deal, see Counting on bank M&A: Why Piper Jaffray bought Sandler O'Neill.

One sector that private investors are increasingly turning to is packaging, which remains saturated with untapped opportunities. Changing consumer behaviors, sustainability demands and market fragmentation all create a significant opportunity for PE firms to partner with packaging companies looking to remain competitive. Read the full guest article by Sun Capital's Jeremy Stone: Why private equity likes packaging.

Activity and urgency characterize the current dealmaking environment, say investment bankers and other M&A advisors interviewed by Mergers & Acquisitions. After a record-breaking 2018, forecasts for 2019 remain bullish. Advisors point to a lot of cash that must be deployed by strategic buyers and private equity firms alike; a healthy U.S. economy; and low interest rates. Competition for high-quality targets has never been more intense, especially for technology providers, they report, which means sellers are commanding high prices. It all adds up to a sellers' market. Read the story: 8 M&A advisors urge closing deals now, while economy stays strong.

The New York Yankees are in first place in the American League East division and have one of the best overall records in Major League Baseball. Alex Rodriguez is best known as the former Yankees star who hit 696 home runs over the course of his 22-year baseball career, but today he’s making a name for himself as an investor as the founder and CEO of A-Rod Corp. One recent example: While serving as a guest judge on CNBC’s Shark Tank, Rodriguez backed Ice Shaker, an insulated bottle maker founded by former National Football Leaguefullback Chris Gronkowski. Rodriguez talked about his life off the field at EisnerAmper’s 4th annual Alternative Investment Summit. Among the topics discussed: Rodriguez’ childhood as the son of a single mom; his investment thesis, which shares much with other middle-market investors; how he’s helping singer/dancer/actress Jennifer Lopez (to whom he became engaged in March) transition her business initiatives from licensing her brands to owning them; and how one day he just might buy a baseball team. Read the full story: A-Rod talks Ice Shaker, NRG eSports, J. Lo & maybe buying a baseball team.

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.

EVENTS
The Virginia Capital Conference is being held on Oct. 2 at the Jefferson Hotel in Richmond, Virginia.

Exponent Women is hosting a fall rooftop networking session at RSM in New York on Oct. 7.

M&A East is taking place at the Pennsylvania Convention Center in Philadelphia Oct. 22-23.

ACG Charlotte is hosting Deal Crawl at the Mint Museum in Charlotte, North Carolina Nov. 6-7.

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.

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