M&A wrap: Aptiv, Nutonomy, Auxo, Comfort Systems, Hamilton Robinson
Technology plays a key role in most M&A transactions. But while technology is enabling developments, it’s not an end unto itself for many corporations. Instead, strategic buyers are using innovation as a means to achieve goals. Based on analyzing hundreds of recent deals for our annual look at strategic buyers, Mergers & Acquisitions has identified seven goals corporate dealmakers hope to accomplish through M&A today: 1. Integrate data with software; 2. improve the customer experience and relationship; 3. expand and improve distribution; 4. process payments more efficiently; 5. leverage tech trends, like autonomous vehicles; 6. make manufacturing processes more efficient; and 7. achieve better outcomes and efficiencies in healthcare. “Strategics have been really active,” says John Neuner, managing director, Harris Williams. “They are aggressive in pursuing the assets they want, as long as it fits within their strategy. Scale is critical to them, and they have to meet consumer demands by adding new capabilities.” One area we explore that is teeming with dealmaking activity is the auto industry. The sector is going through a major shift, as cars are being made with additional technology, including innovations for self-driving cars and connected devices. Aptiv Plc (NYSE: APTV), formerly known as Delphi Automotive Plc, paid $450 million to acquire NuTonomy, which develops technology used to build self-driving cars. “Our mission has always been to radically improve the safety, efficiency, and accessibility of transportation worldwide,” says Karl Iagnemma, NuTonomy CEO. “Together we will set the global standard for excellence in autonomous driving technology.” In other car deals, General Motors Co. (NYSE: GM) and Honda Motor Co. are teaming up to develop a new self-driving car, with the Japanese automaker taking an almost 6 percent stake in GM’s self-driving car unit.
Auxo Investment Partners has invested in Andrie LLC, a transporter of liquid asphalt, cement, light oil petroleum products, and calcium chloride throughout the Great Lakes. Advisors and lenders to Auxo include: Capstone Headwaters, Miller Johnson PLC, Barnes & Thornburg LLP, BDO USA LLP, PNC Bank, Aon Plc, Krauter & Co., and Advantage Benefits.
Comfort Systems USA Inc. (NYSE: FIX) is buying Walker TX Holding Co. The target offers commercial electrical, network, end-user, industrial services throughout Texas. Advisors to Walker include: D.A. Davidson & Co. and Foley Gardere. Advisors to Comfort include: Robinson Bradshaw.
Hamilton Robinson Capital Partners has invested in American Roller Co., a provider of engineered services and industrial rollers including rubber and urethane coverings, plasma coatings, and core fabrication.
For more deal announcements, see The weekly wrap: Great Hill, Qlik, Toro.
For ongoing developments about private equity funds being raised, see our weekly column, PE fundraising scorecard: Accolade, Hawk Equity, New Heritage.
Bill Choe has joined Paul Hastings' Silicon Valley office as a partner. Choe was previously with White & Case and focuses on M&A. Joining Choe from his prior firm is M&A partner Jason Rabbitt-Tomita. The arrival of Choe and his team adds further momentum to the growth of the Los Angeles law firm's Silicon Valley office and to the firm’s broader technology and M&A capability that has been recently enhanced by a series of new partner arrivals.
Technology M&A is thriving, and private equity 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. 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.
"Companies that are inclusive and also diverse tend to outperform companies that aren't,"says investor Lorine Pendleton of Pipeline Angels and Portfolia in a video interview shot at Exponent Exchange, a gathering of 200 female dealmakers hosted by Exponent Women. Pendleton looks to invest in companies led by diverse entrepreneurs, which she defines as entrepreneurs of color, LGBT entrepreneurs, women, veterans, and disabled entrepreneurs. She also backs companies that have products and services that cater to those markets. "People think that they are niche markets, but they're actually growing in terms of spending dollars and market size."
Related: M&A Insights: Inclusion investing, a video interview with Lorine Pendleton.
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.
Mergers & Acquisitions has closed the nomination process for the 2018 M&A Mid-Market Awards. We look forward to announcing the winners in March. The Awards are one of three special reports we produce each year to celebrate deals, dealmakers and dealmaking firms. The other two are The Rising Stars of Private Equity and The Most Influential Women in Mid-Market M&A.
The SBIA and the AM&AA are hosting a Deal Summit at The Doral in Miami from Feb. 20-22. The gathering offers networking opportunities with senior-level M&A advisors and lower middle-market private equity investors.
ACG New York hosts the 11th Annual Healthcare Conference at the Metropolitan Club in Manhattan on Feb. 28. Dealmakers network with healthcare-focused private equity investors and other industry professionals.
ACG Minnesota and Corvus North are hosting AIM: A Women's Leadership Conference at the Minneapolis Hyatt on March 7. The conference is designed to support and encourage female leaders to grow and achieve success throughout their career journeys.
ACG Philadelphia is hosting its 2nd annual Industry Tour focused on SaaS & Tech-Enabled Services on March 12 at the Union League of Philadelphia. Last year's event brought together 200 PE investors, investment bankers, operating companies and industry advisors from around the country.
ACG New York's Women of Leadership is hosting a golf event and reception on March 21 at Konnect Golf in Manhattan. The event brings together female dealmakers from private equity firms, investment banks and lenders.