M&A wrap: Axial, BluWave, Frazier & Deeter, Blackstone, GLP, Infineon, Cypress

Register now

Today's active M&A market demands a robust set of tools and services. Enter service providers. From online marketplaces, such as Axial, led by CEO Peter Lehrman (pictured), to offerings that help private equity firms administer funds, such as Frazier & Deeter's FD Fund Administration, the service providers featured in Mergers & Acquisitions' updated annual dealmaker's guide help get transactions done. Axial allows buyers and investors to source deals within specific criteria across financials, geography, keywords and more than 20,000 verticals and sub-sectors. Axial is exclusively focused on lower middle market, change of control, debt, minority equity and co-investment transactions involving companies with $5 million to $150 million in revenue and $500,000 to $20 million in Ebitda. “There is no ability to ‘post’ or ‘list’ a deal publicly on Axial,” says Lehrman. “This has led to Axial being a trusted resource for investment bankers, resulting in higher-quality member deal activity over the last 12 months.” For the full guide, read: Dealmaker's guide to service providers: Accordion, Axial, BluWave, Frazier & Deeter

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 seller’s market. A mood of urgency prevails, as dealmakers seek to close deals quickly, while conditions remain favorable. The advisors interviewed for this story say they don’t see signs of a recession this year; however they are closely monitoring bellwethers, including corporate earnings, wage pressure, global supply chains and slowdowns abroad. They are recommending that clients be prepared for an economic slowdown in the next two years. Specialization is the name of the game, and investment bankers advise clients to seek targets with business-model stability, limited cyclical exposure and a recurring revenue business model. Technology, business services, healthcare, consumer and manufacturing are among the most promising sectors. Read the story: 8 M&A advisors urge closing deals now, while economy stays strong.

DEAL NEWS
The mall is now a warehouse, and Blackstone Group LP (NYSE: BX) is betting $18.7 billion on the shift. That’s how much the alternative investment manager is paying for 179 million square feet of urban logistics properties -- the warehouses used by Amazon.com Inc. (Nasdaq: AMZN) and other retailers to fulfill orders from online shoppers. The deal with Singapore’s GLP Pte, the second-largest owner of U.S. logistics real estate, will almost double Blackstone’s U.S. industrial footprint. The rise of Amazon and other e-commerce companies has increased the need for warehouse space by retailers seeking to expand their digital operations and cut delivery times. Kirkland & Ellis is representing GLP. Read the full story by Bloomberg News: Blackstone bets on Amazon effect in warehouse deal.

Infineon Technologies AG agreed to buy Cypress Semiconductor Corp. (Nasdaq: CY) for about $8.7 billion in cash, the latest mega-deal for an industry grappling with slowing growth. The semiconductor industry has been reshaped over the past five years as companies combine to gain scale while fighting rising costs and shrinking customer bases. Kirkland & Ellis advised Infineon. Read the full story: Infineon buys Cypress semi in latest chip mega-deal.

Welsh, Carson, Anderson & Stowe is buying Green Street Advisors from Golden Gate Capital. Green Street offers research, data and analytics to the commercial real estate industry. Advisors to the sellers include Evercore Inc. (NYSE: EVR) and Kirkland & Ellis. The legal advisor to Welsh Carson is Kirkland & Ellis.

West Street Capital Partners VII, a fund managed by the merchant banking division of Goldman Sachs (NYSE: GS), is buying Capital Vision Services from Altas Partners and Caisse de dépôt et placement du Québec. The target provides management services to full-service optometry practices. Latham & Watkins is advising Goldman Sachs and Kirkland & Ellis is representing Capital Vision.

MAS, a collective of designers and producers of events and other experiences, has acquired BeSide Digital, a Brooklyn-based studio and lab focused on bespoke design, engineering, and production, for undisclosed terms. BeSide has developed UI/UX products across markets, including retail, themed entertainment and autonomous transportation. Clients include American Express, Diane Von Furstenberg, Sony and Refinery29’s 29Rooms. The company is now called the BeSide of MAS, and co-founders Matthew Haber and Phillip Gulley are retaining their leadership positions, reporting to Mia Choi, chief creative officer of MAS. In 2018, MAS joined Opus Agency, a portfolio company of private equity firm Growth Catalyst Partners.

Clearlake-backed Gravity Oilfield Services Inc. has acquired certain water disposal assets from Pyote Water Systems III LLC.

Building Industry Partners-backed Homewood Holdings has acquired windows and doors distributors The Door Mill and Valley View Window and Door LLC.

Pamplona Capital Management and Wynnchurch Capital-backed Latham Pool Products has invested in Narellan Pools, the largest pool supply company in Australia and New Zealand.

Sagewind Capital-backed Gcom Software has acquired Gantech, a provider of consulting and technical services to the State of Maryland.

Vestar Capital-backed foodservice equipment distributor Edward Don & Co. has acquired Shervan Colonel Equipment Corp. The target designs and installs kitchens for casinos, resorts and restaurants.

For more deal announcements, see Weekly wrap: Global Payments, TSYS, Genstar, Insight Partners.

For more on PE fundraising, see PE fundraising scorecard: G Squared, Summit Investors, Warburg Pincus.

PEOPLE MOVES
Guiping Lu was hired by law firm K&L Gates as a partner. Lu was previously with Haiwen & Partners, and focuses on private equity and cross-border M&A.

Edward Wei has joined law firm Gibson, Dunn & Crutcher LLP as a partner. Most recently with Cadwalader, Wickersham & Taft, Wei focuses on tax matters related to private equity and M&A.

FEATURED CONTENT
Healthcare companies are spending more on information technology than ever before. Private equity firms including: Bain Capital, GTCR, Great Hill Partners, The Riverside Co. and New Heritage Capital, are investing in the innovations most in demand, including big data, SaaS and artificial intelligence, as we explore in depth in Mergers & Acquisitions' feature, Healthcare's must-have technologies. “Healthcare IT is the largest cottage industry in the world,” says Sam Hendler, who leads healthcare IT deals at Harris Williams.“Healthcare IT is a highly fragmented, multi-billion-dollar market with thousands of companies focused on different $250 million to $500 million sub-markets. Savvy investors see there is an opportunity to aggregate assets and build platforms of scale. It’s an incredibly exciting time in healthcare IT.” For recent transactions that showcase the trends, see 5 private equity-backed healthcare IT deals.

Tech dominates dealmaking. The technology, media and telecom, or TMT, sector accounted for about 40 percent of total private equity deal volume and one-third of total capital invested by PE firms over the last five years, according to EY Private Equity. Looking forward, the next five years of M&A activity will be fueled by a whole new set of developments. As one wave of technological innovation crests, another is forming. “With themes such as cloud computing and mobility now mainstream, PE firms are focusing on the next wave of disruption — technologies such as artificial intelligence and machine learning, robotic process automation (RPA), Internet of Things (IoT), robotics, drones, blockchain, augmented reality and virtual reality,” finds the April edition of EY’s quarterly PE Pulse report. Read our full coverage: Smart cities, IoT, AI, robots, edge computing will fuel next wave of tech M&A.

Genstar Capital, Audax and HarbourVest ranked as the top U.S. private equity firms 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.

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

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: 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.

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 New York, ACG Boston and ACG Philadelphia 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 and the State Room, June 12-13.

Exponent Women hosts the Annual Exchange, which brings a trusted network of women dealmakers together for a focused day of robust content and networking, at Second in New York, on July 11. The Exchange provides attendees with opportunities to establish new connections, reinforce existing ones and absorb timely and relevant knowledge from industry leaders.

For reprint and licensing requests for this article, click here.