Looking for a glimpse of what’s to come in the private equity industry? Meet the 10 dealmakers named by Mergers & Acquisitions as the 2019 Rising Stars of Private Equity:
Austin Collier, Branford Castle Partners
Kevin Cunningham, LNC Partners
Shawn Domanic, Sterling Partners
Stephen Jeschke, GTCR
Danielle Lalli, Huron Capital (pictured)
Jason Mironov, TA Associates
James Oh, Transom Capital Group
Sophia Popova, Summit Partners
Pavan Tripathi, Bregal Sagemount
Christine Wang, Francisco Partners
The Rising Stars share a common set of core values. They are passionate about building companies. They are naturally curious and interested in changing things for the better. They enjoy working with portfolio company managers, investment bankers and other deal team members. They appreciate the responsibility and autonomy their firms have given them. They are grateful for the leaders who have helped shape their careers, and they are generous with their own time when it comes to nurturing the next generation. As the PE industry goes through a generational shift and many firm founders retire, it's well worth getting to know these emerging leaders. They represent the future of private equity. For profiles and video interviews, see Meet Mergers & Acquisitions' 2019 Rising Stars of Private Equity For Q&As, see 10 Rising Stars of Private Equity tell their tales.
Concord Health Partners, an investment firm focused on healthcare, and the corporate venture arm of Stanley Black & Decker’s (NYSE: SWK) have invested in VitalTech Holdings Inc., a remote patient monitoring and digital health company. Stanley Black & Decker has also entered into a commercial agreement with VitalTech to distribute products and services. VitalTech is the third investment by Concord in 2019; the firm invested in Flexwise Health Inc., a business support services company focused on healthcare, and MIVI Neuroscience Inc., a medical device company that provides tools for clearing blood clots from brain vessels.
Pritzker Private Capital has acquired Valicor Environmental Services, provider of non-hazardous wastewater treatment services in North America. Pritzker is investing alongside Valicor’s management team, which will continue to lead the business. Led by CEO Tony Pritzker, whose family originally made its fortune in founding Hyatt Hotels Corp. (NYSE: H), Pritzker Private Capital invests directly in companies rather than through private equity funds. With offices in Chicago and Los Angeles, the firm invests in North American-based companies with enterprise values between $100 million and $750 million, focusing on quality businesses with leading market positions in three core sectors: manufactured products, services and healthcare.
Private equity firm GTCR has acquired a stake in Park Place Technologies, a third-party maintenance provider for computer networks, storage and servers, from middle-market PE firm Charlesbank Capital Partners. Charlesbank will keep an ownership stake in Park Place, and the deal is expected to close by Sept. 30. Ropes & Gray advised Charlesbank on the transaction.
Colony Capital Inc. (NYSE: CLNY) investment management firm has acquired Digital Bridge Holdings LLC for $325 million. Digital Bridge manages nearly $20 billion of digital infrastructure globally. The deal sets up transition plan where Colony will focus on digital and real estate assets. Within two years, the plan is for Digital Bridge CEO Marc Ganzi to become the CEO of Colony, succeeding Thomas Barrack, Jr., who will become Colony’s executive chairman.
Locke Supply Co., a plumbing, electrical and HVAC distributor, has acquired Richmond Electric Supply Co. from Richmond Electric’s management team and RTK Family Capital, a family office. Richmond Electric is a wholesale distributor that has partnered with manufacturers, such as General Electric (NYSE: GE), ABB (NYSE: ABB), Siemens, Eaton Cooper Power (NYSE: ETN), 3M (NYSE: MMM) and Leviton, and represents specialty products of Kinney Manufacturing, Howard, S&C Electric, and TE Connectivity (NYSE: TEL). Matrix Capital Markets Group Inc.; Graybill, Lansche & Vinzani LLC and McAfee & Taft advised on the deal.
Mexican private equity firm Nexxus Capital has acquired AgileThought, a Tampa software developer, and merged it with Nexxus portfolio company AN Global. AN Global, a computer services business, is changing its name to AgileThought and the merged company will be headquartered in Irving, Texas. The investment came from the Nexxus Capital VI Fund.
Thales Group, designer and builder of electrical systems, is acquiring insolvent motor manufacturer Steyr Motors GmbH. France-based Thales serves the aerospace, defense, transportation and security markets; Steyr Motors, in Austria, specializes in diesel engines. Schoenherr advised Thales on the deal.
French video game company Bigben Interactive has bought Spiders Games, a role-playing video games developer. Spider Games is known for its Faery: Legends of Avalon, Mars: War Logs, Bound by Flame, The Technomancer and Greedfall video games. Lincoln International advised Bigben on the deal.
Zambon, an Italian pharmaceutical and chemical company, has acquired biopharmaceutical company Breath Therapeutics for 140 million Euros ($156 million) or up to 500 million Euros ($558 million) if certain milestones are reached. The sellers are the Gimv private equity firm, biopharma investor Sofinnova Investments and European investor Gilde Healthcare. The sellers had invested in Breath, developer of inhalation therapies, in 2017 when it was spun off of PARI Pharma GmbH.
GFL Environmental Inc. is acquiring Canada Fibers Ltd. and its affiliates. GFL provides non-hazardous solid waste management, infrastructure and soil remediation, and liquid waste management services; Canada Fibers operates plants that recover and process recyclable materials. The acquisition will create new opportunities for GFL to provide integrated collection, sorting, processing and marketing of recyclable materials, says Patrick Dovigi, GFL founder and CEO. The deal is expected to close by Sept. 30.
Jason Porter has joined Baird, the investment banking and private equity firm, as managing director on the global healthcare team. He previously served as a managing director for the healthcare M&A practice of Deloitte Corporate Finance LLC. Porter will cover physician and alternate site healthcare services from Baird’s Charlotte, North Carolina, office.
DIVERSITY IN DEALMAKING
Women hold just 9.4 percent of senior positions at PE firms globally, according to a recent study by HEC Paris. The low representation underscores the importance of projects that feature successful female dealmakers, such as Mergers & Acquisitions' Most Influential Women in Mid-Market M&A. The special report profiles 36 women M&A pros and includes interviews with them.
“There is this idea in sociology: You've got to see it to be it,” said NBC News correspondent Stephanie Rhule about the importance of building communities of women in the financial services sector, where they are woefully underrepresented. Rhule spoke at the second annual Exponent Exchange, hosted by Exponent Women, a group devoted to nurturing the financial services careers of its female members. Read the full story: Exponent Exchange brings together 200 women dealmakers for second annual event.
Gender-diverse PE investment committees outperformed all-male investment committees substantially, finds a recent study by HEC Paris professor Oliver Gottschalg. The results are compelling: Gender-diverse PE investment committees outperformed all-male investment committees substantially, as measured by several metrics: 7 percent more alpha; .52x more total value to paid-in multiple; and 12 percent higher internal rate of return. Also impressive: the failure rate of gender-diverse investment committees was 8 percent lower. The findings provide concrete evidence showing the value of including women on deal teams and may help to convince skeptics. For more, read Why private equity firms should include more women on deal teams.
A new payment company is attacking the hurdles professional women face when returning to the workforce after time away, a distinct problem borne out of the broader gender gap in financial services. “This is an economic problem, where you have something like a parent who left the workforce and then could not get back in,” said Samantha Ettus, founder and CEO of Park Place Payments. Read the full story: Behind a payment startup's battle to bridge the gender gap.
Alex Rodriguez is best known as the New York Yankees star who hit 696 home runs over the course of his 22-year baseball career, but today he’s making a name for himself as an investor as the founder and CEO of A-Rod Corp. One recent example: While serving as a guest judge on CNBC’s Shark Tank, Rodriguez backed Ice Shaker, an insulated bottle maker founded by former National Football League fullback Chris Gronkowski. Rodriguez talked about his life off the field as a savvy investor since his 20’s as the keynote speaker at EisnerAmper’s 4th annual Alternative Investment Summit at the The Museum of Modern Art on June 19. Among the topics discussed in a conversation led by Charles Weinstein, CEO of EisnerAmper: Rodriguez’ childhood as the son of a single mom; his investment thesis, which shares much with other middle-market investors; how he’s helping singer/dancer/actress Jennifer Lopez (to whom he became engaged in March) transition her business initiatives from licensing her brands to owning them; and how one day he just might buy a baseball team. Read the full story: A-Rod talks Ice Shaker, NRG eSports, J. Lo & maybe buying a baseball team.
"We don’t have a fixed timeframe for a sale," says the Stephens Group managing director Aaron Clark. "We just pursue a strategy that can add value and help businesses mature." Mergers & Acquisitions recently spoke with Clark and managing director Clay Hunter to explore the firm’s investment strategy. The Little Rock, Arkansas firm bought Sound Seal, a maker of noise control products, earlier in 2019. Read the full story: Investing for the long term: Q&A with the Stephens Group family office.
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.
Organizations in industries, ranging from manufacturing to healthcare, are using M&A to add automated technology in their processing systems. Advances in robotic technology are making it possible to complete more complex tasks at higher speeds and with improved control and outcomes. Read the full story: Accelerating automation through M&A.
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.
ACG Seattle hosts the Northwest Middle Market Growth Conference at the Fairmont Olympic Hotel in Seattle on July 25.
ACG New York's summer dealmaking conference takes place at Gurney's Star Island Resort & Marina in Montauk, NY, July 31-Aug.1.
The Great Lakes ACG Capital Connection is being held at the Westin Book Cadillac Detroit Hotel in Detroit from Sept. 4-6.