“U.S. companies will generate no earnings growth in 2020,” Goldman Sachs (NYSE: GS) chief U.S. equity strategist David Kostin warns in a note to clients Thursday. “We have updated our earnings model to incorporate the likelihood that the virus becomes widespread.“Our reduced proﬁt forecasts reﬂect the severe decline in Chinese economic activity in 1Q, lower end-demand for U.S. exporters, disruption to the supply chain for many U.S. ﬁrms, a slowdown in US economic activity, and elevated business uncertainty." The note comes on the heels of intense volatility in the stock market and several days of dramatic losses. To get a sense of the impact on the middle market, Mergers & Acquisitions examines several factors, including the current impact on China’s economic growth; how the virus was discussed in the earnings calls of U.S. public companies in January and February; and the views of two prominent dealmakers who are based in Hong Kong. As this is an ongoing story, we’ll continue evaluating the economic and business effects. Analysts are already forecasting slowed growth for China, due to COVID-19. While the country’s economic growth was 6.0 percent in the fourth quarter of 2019, it may fall to as low as 3.5 percent in the first quarter of 2020, if the spread of the virus is not contained fast enough for manufacturing production to resume to normal levels, Morgan Stanley analysts wrote in a Feb. 19 report. While factories had started to come online, analysts found that production had only reached 30 to 50 percent of normal levels. We asked executives from the Riverside Co. and Paul Hastings about the impact of the coronavirus on middle-market dealmaking. Read our full coverage: Viral impact: How COVID-19 is affecting M&A and private equity DEAL NEWS Arsenal Capital Partners has acquired BresMed Health Solutions, a provider of health economic research, communications and consulting services to the pharmaceutical sector. Achelous Partners and Keebles advised BresMed. Ropes & Gray advised Arsenal. Trading services company Intl Fcstone Inc. (Nasdaq: INTL) is buying Gain Capital Holdings Inc. (NYSE: GCAP) for $236 million. Gain offers trading technology and execution services to retail and institutional investors. GCA Advisors and Davis Polk & Wardwell are advising Gain. Jefferies and DLA Piper are advising Intl. TKK Symphony Acquisition Corp. is buying Glory Star New Media Group Ltd. for $525 million. The target is a mobile, online digital media and entertainment company in China. Lewis Brisbois Bisgaard & Smith LLP, Grandall Law Firm and Carey Olsen are advising Glory Star. Moonsail Capital and Plenary Partners have invested in Chicago Eye Institute and Arbor Centers for EyeCare. Muzinich & Co. provided financing and made a co-investment in the transaction. McGuireWoods advised Moonsail and Plenary. Stanley Martin Communities LLC is buying Essex Homes in a deal that will create one of the top 25 builders in the U.S. JTW Advisors advised Essex. DEAL TRENDS Disgruntled investors, including hedge fund Aurelius Capital Management, have ignited a fresh legal battle over Nine West Holdings Inc., a year after the retailer exited bankruptcy with different owners, a new name and less debt. The lawsuit is the creditors’ second case involving the footwear chain after their investments suffered losses of more than 80 percent. They sued Sycamore Partners last year, a case that was settled after Sycamore paid them $120 million to drop claims that its 2014 buyout rendered Nine West insolvent while enriching shareholders by over $1 billion. Sycamore recently bought Victoria's Secret. Read the full story by Bloomberg News: Aurelius renews feud over Victora's Secret owner Sycamore’s $1 Billion Nine West payday. FEATURED CONTENT Audax, HarbourVest and Genstar ranked as the top three most active private equity firms in 2019, based on the volume of completed deals in the U.S., according to PitchBook. Three companies tied for fourth place: Abry, Carlyle and Shore Capital. Where were these PE firms looking for deals? Eight of the firms on our list name the software and technology sector among their top investment targets, and seven put healthcare companies on their priority list. Financial services and consumer services are each named by five of the firms as industries they focus on, with four naming business services companies. Fundraising from investors in 2019 led to two notable fund launches earlier in 2020: KKR’s Global Impact Fund and HarbourVest’s $2.6 billion HarbourVest Fund XI. See our full coverage: Top private equity firms in U.S. deals in 2019: Audax Private Equity ranked No. 1. “The manufacturing industry is changing so quickly, and on a global basis, that the sector presents an enormous investment opportunity,” says Michael Psaros, co-founder and managing partner of KPS Capital Partners, a manufacturing-focused private equity firm that recently raised $6 billion and $1 billion funds in four weeks. “Companies and entire industries are being transformed by technology and by globalization, We see value in manufacturing where others do not and we make these manufacturers better. It’s a great time to invest in the sector and we are excited about what’s to come.” Mergers & Acquisitions explores five trends fueling manufacturing deals. Read our full coverage: 5 trends driving manufacturing M&A. Pushed by a groundbreaking California law mandating it, more companies are putting women on their public corporate boards. The law faces pressure in court and may not stand, but its rippling effect has already started to increase the visibility and awareness of the important benefits of board diversity. Investors are taking notice and trying to get ahead of the curve. According to a study published by MSCI in March 2018, having three or more women on a company’s board of directors translates to a 1.2 percent median productivity above competitors. Read the full guest article by Venable's Belinda Martinez Vega: Why businesses are adding women to their boards. 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. 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 Influenital Women in Mid-Market M&A. For an overview of what we're looking for in each project, including timelines, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women. EVENTS ACG New York is hosting the 12th annual healthcare conference and bourbon tasting at the Metropolitan Club in New York on Feb. 27. ACG Raleigh Durham's 18th annual capital conference is being from March 31-April 1 at the Raleigh Marriott Crabtree Hotel in Raleigh, North Carolina. InterGrowth 2020 is taking place at the Aria Resort & Casino in Las Vegas from April 20-22. The 4th annual Emerging Manager Connect conference is taking place at the Harvard Club in New York on July 22.