M&A wrap: BorgWarner, Delphi, Royal Philips, Carlyle, Gryphon, Incline Equity, Papa John's, Shaquille O'Neal, Starboard

Register now


BorgWarner Inc. (NYSE: BWA) is buying Delphi Technologies PLC (NYSE: DLPH) in a deal that values the target at $3.3 billion. The transaction brings together two auto suppliers that are positioning for the auto industry’s shift to hybrid and electric vehicles, reports Bloomberg News. Forced by governments around the world to improve fuel efficiency and cut emissions, automakers are turning to smaller, lighter engines and electrifying their lineups. “This exciting transaction represents the next step in BorgWarner’s balanced propulsion strategy, strengthening our position in electrified propulsion as well as our combustion, commercial vehicle and aftermarket businesses,” says BorgWarner CEO Frédéric Lissalde. BorgWarner makes auto parts for hybrid and electric cars, such as the electric drive module pictured on display at Automotive World in Tokyo. Delphi was one of two companies to split from Delphi Automotive in 2017. The other was Aptiv Plc, focused on new technology like advanced safety systems and self-driving car software. The split left the smaller Delphi Technologies to focus on supplying engine and transmission parts. BoFA Securities, Rockefeller Financial and Simpson Thacher & Bartlett are advising BorgWarner. Goldman Sachs (NYSE: GS) and Kirkland are advising Delphi. Read the full story by Bloomberg News: BorgWarner buys Delphi to position for auto industry shift.

Mergers & Acquisitions has opened up the nomination process for the 13th Annual M&A Mid-Market Awards, which will honor leading dealmakers and deals that set the standard for transactions in the middle market in 2019. Last year’s winners included: Hollie Haynes, who took home Dealmaker of the Year for raising a second fund for Luminate Capital Partners. Nominations are accepted only through our electronic forms. The deadline is Friday, Feb. 7, 2020. There is no fee. For more information on the nomination process and what we seek in winning candidates, see Call for nominations: Submissions for the M&A Mid-Market Awards due Feb. 7.

DEAL NEWS
Royal Philips (NYSE: PHG) is reviewing options for its domestic appliances business, which makes kitchen and household appliances under the Airfryer XXL, Automatic Coffee Machine with LatteGo, Perfect Care Elite, Air Purifier and SpeedPro Max Aqua brands. The company expects the process to be completed in 18 months. “We have significantly improved the performance of the domestic appliances business over the years, which has made a very important contribution to Philips, however this business is not a strategic fit for our future as a health technology leader,” says Royal Philips CEO Frans van Houten.

Activist investors have worked hard to improve their image over the past few years. Take Starboard Value. The hedge fund sounded loved up last year when it announced a “strategic investment” agreement with Papa John’s International Inc. Within months Papa John’s settled with its obstreperous founder, John Schnatter, enlisted NBA superstar Shaquille O’Neal to join its board. Read the full story by Bloomberg News: Private equity takes on friendlier activists at their own game.

The Carlyle Group (Nasdaq: CG) is investing $100 million to partner with Alchemy Renewable Energy. The two compnanies wil acquire, finance, develop and operate solar power generation projects in the U.S. “Investing in differentiated and proven development platforms is a key focus of our strategy at Carlyle,” says Pooja Goyal, head of Carlyle's renewable and sustainable energy team.

Gryphon Investors has made a majority investment in PestRoutes, a business management and marketing software provider to the pest control, lawn care and pool servicing industries. Existing investor Mainsail Partners is keeping a minority stake in the target. Kirkland & Ellis advised Gryphon. Arbor Advisors and Goodwin Procter advised PestRoutes.

Quest Diagnostics (NYSE: DGX) is buying Memorial Hermann Diagnostic Laboratories, the outreach laboratory division of Memorial Hermann Health System. Dechert is advising Quest.

Incline Equity Partners has bought Foundation Source. The target offers outsourced foundation creation, administrative support, active compliance monitoring, philanthropic advisory and tax and legal expertise to private foundations.

Oak Hill and Genstar Capital-backed Mercer Global Advisors has acquired First Ohio Planning, a wealth management firm in Columbus, Ohio.

Healthcare digital services company Imprivata has purchased GroundControl Solutions, a provider of automation software for shared mobile devices.

FEATURED CONTENT
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 has named the 2020 Most Influential Women in Mid-Market M&A. This marks the fifth year we have produced the list, which recognizes female leaders with significant influence inside their companies and in the wider dealmaking world. It’s been gratifying to watch the project evolve over the years – and become more influential itself. This year, we received more nominations than ever before. As a result, we expanded the number honored to 42 in 2020, up from 36 in 2019. Many dealmakers are new to our list, including Rockwood Equity Partners' Kate Faust, William Blair's Shay Brokemond and Avante Capital Partners' Ivelisse Simon. Read our full coverage of all the champions of change on our list, including Q&As with each individual.

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 s for each, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.

EVENTS
The 8th Independent Sponsors Summit is taking place from Jan. 28-29 at the Harmonie Club In New York.

ACG New York is hosting the 12th annual healthcare conference and bourbon tasting at the Metropolitan Club in New York on Feb. 27.

InterGrowth 2020 is taking place at the Aria Resort & Casino in Las Vegas from April 20-22.

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