M&A wrap: Carlyle, One Medical, Benchmark, PepsiCo
The Carlyle Group (NASDAQ: CG) is making a significant minority investment of up to $350 million in 1Life Healthcare Inc., the company behind One Medical, which claims to be the largest independently held primary care practice in the U.S. Technology is what makes the company stand out; its aim is to reimagine primary care by improving the quality, service and affordability of care through a technology-enabled model. Online scheduling and mobile apps are hallmarks. "One Medical’s combination of best-in-class service and seamlessly integrated technology is delighting patients in an increasingly frustrating primary care environment," said Ram Jagannath, managing director on Carlyle’s healthcare team. "We look forward to working with the company to bring the One Medical brand and experience to more patients across the country.” One Medical was founded in 2007 by Tom Lee, the former chief medical officer of Epocrates. Lee had served as chief executive of One Medical until 2017, when Amir Dan Rubin, a former UnitedHealth Group executive, took the reins. Today, Lee serves as executive chairman. One Medical has raised more than $180 million in venture capital from investors, including Benchmark Capital; GV, the venture arm of Google parent Alphabet Inc. (Nasdaq:GOOGL); JPMorgan; and Maverick. Equity for the transaction comes from Carlyle Partners VII, an $18.5 billion fund that makes majority and strategic minority investments primarily in the U.S. The investment in One Medical continues Carlyle’s long-term global commitment to healthcare, in which it has invested more than $11 billion of equity since inception. Carlyle’s experience investing in the healthcare space includes MedRisk, Albany Molecular Research, PPD, WellDyneRx, Ortho Clinical Diagnostics, Rede D'Or São Luiz, Healthscope, Qualicorp, MultiPlan, and most recently, Millicent Pharma. Latham & Watkins LLP served as legal advisor to Carlyle.
PepsiCo’s announced $3.2 billion acquisition of SodaStream is the latest in a wave of deal activity in the packaged food sector. This robust M&A environment should continue, as companies tap into consumer trends like “better for you” foods, says Gregory Stemler who is the Americas consumer products and retail industry sector leader for transaction advisory services at EY, a multinational professional services firm. Read the full story: PepsiCo's SodaStream deal augurs more food & beverage M&A.
While some of the firms that were instrumental in launching the middle market back in the 1980s and 1990s have long since been shuttered, their legacy lives on. They proved to be excellent training grounds for many successful dealmakers. Heller Financial certainly belongs in this category, and Mergers & Acquisitions featured its alumni a few years ago. Another firm with a far reach is Holleb & Coff, a Chicago law firm that closed in 2000, after a nearly 50-year run. Founded by Marshall Holleb and Morris Coff in 1951, the firm advised prestigious clients, such as American National Bank, Hollinger International Inc.and LaSalle Bank. Revenue topped $40 million in 1997. In its heyday, Holleb & Coff employed 130-plus attorneys; it was the law firm to work for in the Midwest. Drawn to the supportive culture, new associates and seasoned partners alike enjoyed working at the venerated firm. Many of the lawyers who worked at Holleb & Coff back in the day are making a significant impact on M&A today, including: John Corvino, general counsel to the Chicago White Sox; · Brian Kerwin, chair of Duane Morris’ global corporate practice; Theodore (Ted) Koenig, the founder and CEO of Monroe Capital; Kenneth Serota, president of Hu-Friedy Manufacturing Co., and Michelle Warner, general counsel, USG Corp. (NYSE: US). Read the full story: Holleb & Coff alumni: Where are they now?
Mergers & Acquisitions has announced 11 Rising Stars of Private Equity, including John Kos, GTCR; Ethan Liebermann, TA Associates; Jennifer Roach, Yellow Wood Partners; and Afaf Ibraheem Warren, Siris Capital . The up-and-coming investors are expected to play significant leadership roles in the future. See: Meet Mergers & Acquisitions' 11 Rising Stars of Private Equity.
Exponent, a new group of women dealmakers, brought together 200 women from private equity funds, investment banks, startups and M&A advisory firms for the Exponent Exchange, featuring Sallie Krawcheck as the keynote speaker. Previously the CEO of Wall Street banks, including Merrill Lynch Wealth Management and Citi Private Bank, Krawcheck serves as the CEO of Ellevest, an online investing platform for women. Mergers & Acquisitions participated as an in-kind sponsor, and editor-in-chief Mary Kathleen Flynn moderated a panel. Check out our slideshow, Exponent drew 200 women dealmakers to event featuring Sallie Krawcheck.
See Mergers & Acquisitions' look at 10 PE firms that have succeeded in raising new funds recently despite an overall slowdown in PE fundraising, including the Carlyle Group (Nasdaq: CG), PPC Partners, Soundcore Capital Partners and Sycamore Partners. For the latest on PE fundraising, see PE fundraising scorecard: Ridgemont Equity and Yellow Wood.
For recent deal announcements, see the Weekly wrap: Best Buy, Peak Rock, Thoma Bravo.
Procter & Gamble Co. (NYSE: PG) is focusing on growing its top 25 brands, including Bounty paper towels, Charmin toilet paper, Crest toothpaste,Pampers diapers, Nyquil cough and cold medicine, and Tide laundry detergent, while seeking acquisitions. In April, P&G announced plans to buy Merck KGaA’sconsumer-health business for $4.2 billion. The deal includes the Femibion and Neurobion over-the-counter healthcare brands. P&G is also purchasing skincare brand First Aid Beauty. “What you have to have is the brand consumers prefer, because then retailers want to carry it, because it builds the basket,” P&G CEO David Taylorexplains. Read the full story: Why P&G is changing its M&A strategy.
Summer reading list: From stories of star athletes Arnold Palmer, Keith Hernandez and Tiger Woods to advice from entrepreneurs Bridgewater Associates’ Ray Dalio, KPCB’s John Doerr, Nike’s Phil Knight and Brava Investments’ Nathalie Molina Niño, plus strategies to help business leaders in general, and female dealmakers in particular, the 15 books on Mergers & Acquisitions’ list entertain, instruct and inspire. Check out our listicle: Dealmaker’s guide to summer reading: 15 new books.