M&A wrap: Coca-Cola, BodyArmor, Kobe Bryant, James Harden, Los Angeles Lakers
The Coca-Cola Co. (NYSE: KO) is buying a minority stake in sports drink company BodyArmor. The target counts former and current National Basketball Association players Kobe Bryant and James Harden (pictured) among its investors. The deal expands Coca-Cola's beverage line beyond traditional soft drinks, while it gives Whitestone, New York-based BodyArmor access to Coca-Cola's bottling system. Coca-Cola already owns another sports drink in Powerade. BodyArmor drinks are infused with coconut water, vitamins and potassium, that come in flavors that include BodyArmor Lyte and BodyArmor Sportwater. The company claims its products are lower in sodium and higher in potassium compared some rivals, such as Gatorade. Bryant, who retired in 2016 after playing 20 years with the Los Angeles Lakers, invested in the brand in BodyArmor in 2013. Harden currently plays for the Houston Rockets. Bodyarmor was founded in 2011 by Mike Repole and Lance Collins. Repole co-founded the Smartwater and Vitaminwater brands, which Coca-Cola acquired in 2007 for $4.1 billion. “In a fast-moving and dynamic industry, and during a time of unprecedented change at Coca-Cola, we’re challenging the status quo and bringing innovative, boundary-less thinking to our strategic relationships to ensure we are offering the products consumers want,” says Coca-Cola North American president Jim Dinkins. BodyArmor join Coca-Cola's venturing and emerging brands investment portfolio and Coca-Cola will become BodyArmor's second largest shareholder behind Repole.
Private equity fundraising has slowed down in 2018, after a strong 8-year run. The amount of capital raised annually for new funds by U.S. private equity firms increased more than threefold from 2010 (when nearly $71 billion was raised) to 2017 (when $243 billion was raised). But U.S. PE firms closed only $69 billion worth of new funds during the first half of 2018, a far cry from 2017 and on pace for a six-year low, according to Pitchbook. See Mergers & Acquisitions' look at 10 PE firms that have succeeded in raising new funds recently despite the slowdown, including the Carlyle Group (Nasdaq: CG), PPC Partners, Soundcore Capital Partners and Sycamore Partners. For fundraising news on an on-going basis, see our weekly column, PE fundraisng scorecard: Canson Capital and G Squared Opportunities.
AlpInvest Partners has invested $260 million in Stagwell Media, a private equity fund focused on the marketing services industry. The firm was founded by former Microsoft Corp. (Nasdaq: MSFT) executive Mark Penn. Mercury Capital Advisors advised Stagwell.
Apex Group and Genstar Capital have bought Custom House, a hedge fund administrator to alternative investment managers across Asia, Europe and North America. Willkie Farr & Gallagher LLP represented Apex.
Bridges Fund Management has acquired a majority stake in Medwood Holdings LLC. Medwood provides administrative and management support services to a network of primary care and family medicine physician practices in New York.
Serent Capital has acquired Senior Dental Care, which offers full-service dental plans for nursing homes and their residents. The deal represents Serent's eighth investment in the healthcare sector.
Silver Oak Services Partners has invested in Innovative Discovery. The target provides forensics, electronic data discovery, hosting, project management, production and managed review services to businesses, government agencies and law firms.
Krishna Potarazu and Vincent Prajka were promoted from senior directors to partners at PE firm JMI Equity. They co-lead the firm’s operational excellence group.
Bruce Steinert has joined Perkins Coie's M&A and private equity practice as a partner. Steinert was previously with Greenberg Traurig and represents PE clients on leveraged buyout debt financing and related matters.
Mergers & Acquisitions has announced the Rising Stars of Private Equity. These 11 up-and-coming investors are expected to play significant leadership roles in the future. Congratulations to:
Daniel Hopkin, Partner, Kainos Capital
John Kos, Principal, GTCR
Erik Latterell, Director, Stone Arch Capital
Ethan Liebermann, Principal, TA Associates
Jaime McKenzie, Director, Monomoy Capital
Jennifer Roach, Vice President, Yellow Wood Partners
Joseph Rondinelli, Principal, Frontenac
David Shainberg, Vice President, Balmoral
Tom Smithburg, Vice President, Shore Capital Partners
Nicholas Stone, Managing Director, Cyprium Partners
Afaf Ibraheem Warren, Senior Associate, Siris Capital
For profiles of the emerging leaders, see Meet Mergers & Acquisitions' 11 Rising Stars of Private Equity.
In today’s M&A landscape, the definition of due diligence must expand beyond conventional financial metrics to include a company’s digital strategy and capabilities strengths and weaknesses as well. Traditionally, due diligence has focused on examination of the assets, liabilities and overall fiscal health of the target company. That will continue. Financial statements, quality of earnings reports, commercial diligence and legal are the backbone of the diligence process. But investors must now extend their M&A due diligence to include “digital diligence.” In our digital economy, every company is a technology company—which means every company lives and dies by how effectively it embraces technology and protects itself against cyber threats. That means acquirers need to take a hard look at everything digital to see if the target company has a true tech strategy in place. Read the full guest article by CohnReznick's Jeremy Swan: Giving digital diligence its due.
Exponent, a new group of women dealmakers, brought together 200 women from private equity funds, investment banks, entrepreneurs and advisors for the Exponent Exchange, featuring Sallie Krawcheck as the keynote speaker. Previously the CEO of Wall Streetbanks, 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 in the event as an in-kind sponsor, and editor-in-chief Mary Kathleen Flynn moderated Spotlight Panel, From Startups to Showtime: Investment Case Studies. Check out our slideshow, Exponent drew 200 women dealmakers to event featuring Sallie Krawcheck.
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.