M&A wrap: Coronavirus, Microsoft, Goldman Sachs, Riverside, Merrill, Paul Hastings, Salesforce, DocuSign, Stonepeak, Top PE firms
Stocks continue to plummet on Friday, as the coronavirus wreaks havoc on the global supply chain and slows the growth of countries and companies. The week is expected to close as the worst week for Wall Street since the financial crisis of 2008. On Thursday, all three U.S. benchmark stock indexes closed in correction territory, defined as a decline of at least 10 percent but not more than 20 percent, from a recent peak, as MarketWatch points out. Also on Thursday, Goldman Sachs (NYSE: GS) warned clients to expect zero growth from public companies in 2020. And companies continue to revise expectations downward, with Microsoft Corp.'s (Nasdaq: MSFT) announcement on Wednesday that sales in the current quarter would be lower than it had previously predicted because of coronavirus-related disruptions in Chinese manufacturing. To get a sense of the impact on the middle market, Mergers & Acquisitions asked executives from private equity firm the Riverside Co., virtual data room provider Merrill Corp. and law firm Paul Hastings to weigh in. Read our full coverage: Viral impact: How COVID-19 is affecting M&A and private equity
Salesforce.com Inc. (NYSE: CRM) is acquiring Vlocity for about $1.3 billion. The target offers cloud and mobile software services in the communications, media and entertainment, energy, utilities, insurance, health and government sectors. "Every organization, including the world’s largest customer-centric corporations and industries, must digitally transform, it is more important than ever for our customers to have products that speak the language of their industries," said Vlocity CEO David Schmaier. Goodwin is advising Vlocity.
DocuSign (Nasdaq: DOCU) is buying artificial intelligence company Seal Software for $188 million. Seal Software helps businesses automatically extract documents. "DocuSign is about digitally transforming the very foundation of doing business," says Scott Olrich, DocuSign's chief operating officer. "We believe that AI will play a vital role in this transformation." Cooley is advising DocuSign.
Stonepeak Infrastructure Partners is buying a controlling stake in Canadian broadband services provider Xplorenet Communications. Paul, Weiss, Rifkind, Wharton & Garrison LLP is advising the seller.
For more deal announcements, see Weekly wrap: Intuit, Piper Sandler, Salesforce.
For more on fundraising, see PE fundraising scorecard: Hamilton Lane, Neuberger Berman, Plexus Fund.
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.
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.