M&A wrap : Audax, Astute, Wieland, GBC, Bregal Partners, Monument Group

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Audax Private Equity, one of the most active private equity firms in the U.S., has invested in Astute Inc., a provider of artificial intelligence-driven customer engagement, digital self-service, and consumer data management software, for undisclosed terms. Astute's customers include B&G Foods Inc. (NYSE: BGS), The Cheesecake Factory Inc. (NASDAQ: CAKE) and Delta Air Lines Inc. (NYSE: DAL). In 2018, Astute acquired Wilke Global, a provider of consumer relations software. “Astute’s software assists the world’s largest consumer brands in capturing and analyzing insights to improve customer engagement and satisfaction," said Geoffrey Rehnert, co-CEO, Audax Group. "There are exciting growth opportunities on the horizon for Astute, as they continue to grow organically and through strategic acquisitions, both foreign and domestic.” Lazard acted as exclusive financial advisor, and Perkins Coie LLP served as legal counsel to Astute; and Ropes & Gray LLP served as counsel to Audax.

Audax Group ranked No. 2, behind Genstar Capital, in a list of the top U.S. private equity firm of 2018, based on volume of completed deals, according to PitchBook. Check out Mergers & Acquisitions' profiles of 21 firms that led the league tables. Top private equity firms: Genstar, Audax, HarbourVest and more

Also see: Top investment banks in PE-backed deals: KPMG, Houlihan, GS, William Blair.

DEAL NEWS
Wieland-Werke AG has agreed to buy Global Brass and Copper Holdings Inc. (NYSE: BRSS) in a $962.8 million deal. Wieland is a nearly 200-year-old, family-owned global technology company in the brass and copper industry. Wieland is acquiring all of the outstanding shares of GBC in an all-cash transaction. GBC shareholders will receive $44.00 per share in cash representing a 27 percent premium to GBC's closing price, as of April 9. The transaction is expected to close in the second half of 2019 and is subject to regulatory approvals. "The transaction brings together two highly complementary companies with diverse product offerings across copper and copper alloy strip and sheet, rod, foil, wire, tube and fabricated components, serving a wide variety of industries and creates a truly unique global leader in the red metals industry ideally suited to create customer value in North America, Europe and Asia," according to Weiland. Advising GBC are: J.P. Morgan Securities LLC, as exclusive financial advisor; and Fried, Frank, Harris, Shriver & Jacobson LLP, as legal counsel. Serving as legal counsel to Weiland is Ropes and Gray LLP.

Bregal Partners has closed its second fund, Bregal Partners II LP, at $650 million of capital commitments sourced from its current limited partners, bringing the total in committed capital under management to $1.25 billion. “Our team is proud and appreciative of the support we’ve received from our limited partners,” said Scott Perekslis, co-founder and managing partner. Charles Yoon, managing partner, added, “We are long-term partners to entrepreneurs, founders, and management teams, working with them to build and scale their businesses. Fund II is off to a great start having already invested in three founder-owned platforms in the consumer, food and retail industries.”

Asklepios BioPharmaceutical Inc., a developer and manufacturer of Adeno-Associated Virus (AAV) gene therapy therapeutics for underserved patient populations with rare and generally untreatable genetic disorders, has received $235 million in funding to augment and accelerate its business. TPG Capital and Vida Ventures are investing $225 million for a minority stake in the company. As part of the transaction, AskBio’s founders and board members are co-investing $10 million. The investment provides AskBio with additional capital to help advance and expand clinical trials, enhance its manufacturing capabilities and capacity, and drive long-term growth.

Houston, Texas-based private equity firms Post Oak Energy Capital LP and Genesis Park LP have led a $200 million equity commitment to Layne Water Midstream Holdings LLC. Post Oak and Genesis Park acquired LWM from Granite Construction Inc. with an additional commitment to continue to fund the company’s growth. The LWM management team invested alongside Post Oak and Genesis Park. Layne Water Midstream, based in The Woodlands, Texas and in Midland, Texas, is a full-cycle water midstream busines,s providing upstream oil and gas companies with water sourcing, gathering, disposal and recycling infrastructure and services in the Delaware and Midland Basins.

Monument Group, a global placement agent for private funds, marks its 25th anniversary on April 11. Since 1994, Monument Group has focused on raising capital for private investment funds pursuing a broad range of strategies including buyouts, credit, distressed securities, energy, growth capital, infrastructure, natural resources, real estate, secondaries, special situations and venture capital. To date, the Boston-based firm has assisted clients in raising over $100 billion in 91 funds, with limited partner commitments from 46 countries on five continents.

March featured deals closed by CACI International Inc. (NYSE: CACI),Centerbridge Partners, Stryker Corp. (NYSE: SYK) and Viacom Inc. (Nasdaq: VIA). See our monthly data wrap, March M&A buyers: CACI, Centerbridge, Stryker, Viacom

M&A TRENDS
Private equity-based deal activity in the U.S. was "off to a slow start through 1Q 2019, with reported figures falling well below those of any quarter in 2018," said PitchBook in a report. "Through the first three months of the year, GPs closed on 993 deals totaling $121.4 billion—declines of 27.9 percent and 26.7 percent from 1Q 2018, respectively. Markets—including leveraged loan and public equities—returned to stability in 1Q. However, as deals typically take 12-16 weeks to close, many of the deals that closed were being negotiated in the last quarter of 2018 when those markets were much more volatile. This is likely a reason for the decline in exit activity, because this volatile time caused many GPs to hold onto investments and ride out the negative valuation pressures until the pricing landscape is more advantageous and deal financing costs are more reasonable." The report quoted Craig Larson, managing director, investor relations for KKR & Co. (NYSE: KKR) as saying: “The beauty of our model is that we get to time our entries and exits. We’re not forced sellers during these periods.” PitchBook predicts that future quarters "will experience higher levels of deal and exit activity."

Investors' concerns about a potential economic downturn may be good news for the private equity industry. “Early 2019 represents a pivotal point in time for the alternative assets industry,” finds a report from Preqin published earlier in April. Preqin surveyed more than 400 investors back in November to understand their current views on each asset class, the challenges they are facing and their plans for the next 12 months. “With asset valuations currently at record levels, fund managers and investors we spoke to largely agree that we are at the peak of the equity market cycle and are due a correction.” PE may prove to be a silver lining. While the public markets already began showing signs of weakening in late 2018, Preqin points out that “alternative assets weathered the storm of the last recession well.” As asset classes go, private equity is perceived as a safer haven in bad economic times. PE firms are likely to see increasing interest from investors who are preparing for a downturn, according to the survey. Related: Investors preparing for economic downturn turn to private equity

Corporate divestment activity of European assets is projected to increase for the fourth year running, according the findings of Aurelius Equity Opportunities’ annual corporate carve-out survey, with shareholder activism expected to contribute to the rise in activity. The survey, which canvassed the opinions of Aurelius' corporate and advisory contacts on the volume and drivers of divestment activity of European non-core assets in 2019, indicated that the number of Asian buyers of these assets will be lower in 2019, compared with the previous year. In contrast, North American buyers of such assets are expected to be higher. Aurelius is a a multi-asset manager with activities across Europe and offices in Munich, London, Madrid and Stockholm.

FEATURED CONTENT
Excelled. Innovated. Inspired. That’s what the eight winners of Mergers & Acquisitions’ 12th Annual M&A Mid-Market Awards did in 2018. Our awards honor the leading dealmakers and deals that set the standard for transactions in the middle market. In addition to Nike, award winners include: Nike, Fortive, TA Associates, the Riverside Co., Harris Williams, Monroe Capital, Goodwin and Luminate Capital Partners' Hollie Haynes.

Read our full coverage: Meet the winners of the M&A Mid-Market Awards: Nike, Fortive, TA, Harris Williams.

Related: Read more about Mergers & Acquisitions' three annual special reports, including the M&A Mid-Market Awards, the Rising Stars of Private Equity, and the Most Influential Women in Mid-Market M&A.

Technology permeates dealmaking today. “Tech is, more or less, touching everything,” as the authors of The 2019 BDO Technology Outlook Survey put it. You can see the impact of tech throughout the 2018 winners of Mergers & Acquisitions’ M&A Mid-Market Awards especially: Luminate Capital Partners founder Hollie Hayne’s scoring Dealmaker of the Year for raising a second fund to invest in enterprise software companies; and TA Associates’ winning Private Equity Firm of the Year for investing a record $2.8 billion in new portfolio companies, most of which are infused with technology one way or the other.

Related: Why private equity firms still love technology

Mergers & Acquisitions has produced a wealth of compelling content recently. In case you missed any of it, we've put together a short list of 5 M&A stories you don't want to miss, including the winners of the 2018 M&A Mid-Market Award winners, top investment banks and PE firms doing tech deals. Here are more details on our recent coverage: 5 M&A stories you don't want to miss

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. Related: Meet the 2019 Most Influential Women in Mid-Market M&A.

EVENTS
ACG Boston hosts a 40th Anniversary Celebration and inaugural awards reception at the Boston Harbor Hotel's Wharf Room on April 24.

InterGrowth 2019 takes place May 6-8 at the Waldorf Astoria & Hilton Bonnet Creek in Orlando, Florida.

Innovation Works holds its second annual AI/Robotics Venture Fair in Pittsburgh May 15-16.

ACG Chicago hosts the Midwest Capital Connection, at The Marriott Downtown Magnificent Mile, May 21-22.

ACG New York, ACG Boston and ACG Philadlephia are holding the Industrial Conference with Value Creation at the Infor in New York on June 6. The event is part of the Northeast Industry Tour.

ACG Minnesota hosts the The Upper Midwest ACG Capital Connection at the Renaissance Minneapolis Hotel, The Depot, June 10-11.

ACG Boston brings together 700-plus dealmakers for DealFest Northeast and DealSource Select 2019 at the Cyclorama & The State Room, June 12-13.

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