M&A wrap: Carlyle, CACI, Madison Dearborn, LGS, Coca-Cola, Vance Street
The Carlyle Group's (Nasdaq: CG) Carlyle Europe Technology Partners has raised $1.55 billion for CETP IV. The transatlantic 19-person CETP IV team will continue its strategy of investing in business-to-business companies in the European and U.S. lower middle market. "CETP IV harnesses Carlyle’s deep technology expertise, extensive global networks and substantial operating resources to create a clear edge in value creation," says Carlyle co-CEO Kewsong Lee. Funds focused on lower middle-market technology firms are flourishing. Luminate Capital Partners, founded by Hollie Moore Haynes, recently raised its second fund at $425 million. Haynes is a former managing director at Silver Lake Partners. ParkerGale, co-founded by Kristina Heinze, Devin Mathews, Jim Milbery and Ryan Milligan, recently raised its second fund at $375 million. Resurgens Technology Partners has raised its first fund at $200 million. Resurgens was founded by Fred Sturgis, John Baumstark and Adi Filipovic. Sturgis and Filipovic were previously with Accel-KKR, and Baumstark was previously an operating partner at H.I.G. Capital. Resurgens focuses on lower middle-market software and tech-enabled services businesses.
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.
Call for nominations
Nominations are due Feb. 8 for Mergers & Acquisitions' 12thAnnual M&A Mid-Market Awards, which will honor leading dealmakers and deals that set the standard for transactions in the middle market in 2018. CLICK HERE TO SUBMIT NOMINATIONS.
CACI International Inc. (NYSE: CACI) is buying LGS Innovations from Madison Dearborn Partners and CoVant Management for $750 million. LGS provides communications, intelligence, surveillance and cybersecurity services to federal government agencies,, including the U.S. Department of Defense. MDP and CoVant bought LGS from Alcatel-Lucent in 2014. In 2012, MDP and CoVant formed a partnership to identify investments in the federal government technology sector. In 2018, the two firms acquired LinQuest Corp., a provider of space systems technology and software. J.P. Morgan Securities LLC (NYSE: JPM) and Gibson Dunn & Crutcher are advising CACI. Bank of America Merrill Lynch, Kirkland & Ellis LLP and Crowell & Moring LLP are advising LGS.
The Coca-Cola Co. (NYSE: KO) has acquired the majority stake it did not already own in Nigerian beverage company Chi.Ltd. Chi produces juices and dairy products under the Chivita and Hollandia brands. Coca-Cola purchased a 40 percent stake in the target in 2016. “Coca-Cola is continuing to evolve as a total beverage company, and Chi’s diverse range of beverages perfectly complements our existing portfolio, enabling us to accelerate expansion into new categories and grow our business in Africa,” says Peter Njonjo, president of the West Africa business unit of Coca-Cola.
Vance Street Capital has acquired Applied Plastics, a provider of coatings for medical devices. Paul Hastings LLP advised Vance Street. Raymond James and Sullivan & Worcester LLP advised Applied. BMO Sponsor Finance and Neuberger Berman provided financing.
Audax Private Equity-backed Colony Hardware Corp. has purchased Electrical Fasteners Co., a distributor of tools and fasteners to the construction sector.
Broadridge Financial Solutions Inc. (NYSE: BR) has acquired PivotData LLC, a data provider for the investment management industry.
Silver Oak Services Partners has invested in Keytsone Partners. The target offers outplacement, career management, executive coaching, and leadership development services.
Victor Capital Partners has invested in outdoor consumer products manufacturer Tender Corp.
Angad Hira has been promoted from vice president to chief financial officer at VMG Partners, where he is responsible for all of the PE firm's financial operations. Hira joined VMG in 2010.
Marissa Wiley has been name partner at Nixon Peabody. She focuses on M&A in the healthcare sector. Eric Tanck has also been named partner at the same law firm. He concentrates on M&A in the food and beverage, healthcare and high-tech manufacturing sectors. And Erik Schneider has been named partner at Nixon Peabody. He concentrates on debt-related transactions.
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 asked leading dealmakers about their outlook for the middle market in 2019. Watch the video conversations, shot at ACG Philadelphia's M&A East: It is a seller's market, and deal activity is expected to remain steady, says Ramsey Goodrich of Carter Morse & Goodrich: Outlook 2019: Great time to sell. Private equity firms and strategic buyers will use their excess cash and capital to look for deals, says Bharat Ramprasad of Stifel Nicolaus: Outlook 2019: Excess capital to fuel M&A. Rising interest rates and regulatory changes may increase volatility, cautions Mark Emrich of Murray Devine: Outlook 2019: Keep an eye on rising interest rates.
Family-owned businesses require a lot preparation to sell to PE firms, says Carls Marks Advisors' Warren Feder. Watch the video: How to prep a family biz for sale to private equity.
The New England Patriots and the Los Angeles Rams will face off in the Super Bowl on Sun. Feb 3. Off the field, Patriots quarterback Tom Brady recently teamed with former Giants defensive end Michael Strahan, who is the co-host of ABC’s Good Morning America, to launch a sports media startup called Religion of Sports Media. Muhsin Muhammad, who played wide receiver for the Carolina Panthers and the Chicago Bears, is a managing director of private equity firm Axum Capital Partners. Steve Young, former San Francisco 49ers quarterback, is a co-founder of private equity firm HGGC. Check out: NFL stars Tom Brady, Michael Strahan, Steve Young go PE.
The SBIA and the AM&AA are hosting a Deal Summit at The Doral in Miami from Feb. 20-22. The event offers networking opportunities with senior-level M&A adviors and lower middle-market funds.
ACG New York hosts the 11th Annual Healthcare Conference at the Metropolitan Club in New York on Feb. 28. Dealmakers network with healthcare-focused private equity firms 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.