M&A wrap: ViacomCBS, Crescent Capital, Alcentra, Verizon, Tumblr, Automattic, TPG
CBS Corp. (NYSE: CBS.A, CBS) and Viacom (NASDAQ: VIA, VIAB), two of the world’s leading entertainment companies, have entered into a definitive agreement to combine in an all-stock merger, creating a combined company with more than $28 billion in revenue. The combined company, ViacomCBS Inc., is positioned be a leading global, multi-platform, premium content company, with the assets, capabilities and scale to be one of the most important content producers and providers in the world, say the companies. This includes the largest television business in the U.S. and a major Hollywood film studio, Paramount Pictures. Shari Redstone, whose family investment vehicle National Amusements Inc., or NAI, controls both companies, will become chairwoman of the combined entity. Viacom CEO Bob Bakish will lead the business as CEO. The last time the companies were in merger discussions, more than a year ago, Viacom directors had agreed to take 0.6135 of a CBS share for every nonvoting share of their business, people with knowledge said at the time, according to Bloomberg News. The companies, using the code names “Comet” and “Venus,” had expected to save at least $1 billion by combining. CBS shares have dropped since then. They’ve lost about 18 percent since the beginning of 2018, as the broadcaster faced mounting challenges, including the ongoing competition for viewers with the likes of Netflix Inc. and the ouster of longtime CEO Les Moonves. CBS has been weighing its next moves since firing Moonves in September, after a dozen women accused him of sexual misconduct, setting off a shake-up that included a board overhaul. Joe Ianniello, formerly chief operating officer, has been running the company as interim CEO ever since. Ianniello will become chairman and CEO of CBS, overseeing all CBS-branded assets in his new role. This time around, the negotiations dragged on for several days, as the two sides worked out the details. The companies held round-the-clock negotiating sessions this week, according to people familiar with the talks. The Special Committee of CBS’s Board of Directors is being advised by Centerview Partners LLC and Lazard Frères & Co. LLC as its financial advisors and by Paul, Weiss, Rifkind, Wharton & Garrison LLP as its legal counsel. The Special Committee of Viacom’s Board of Directors is being advised by LionTree Advisors LLC and Morgan Stanley & Co. LLC as its financial advisors and by Cravath, Swaine & Moore LLP as its legal counsel. Viacom is being advised by Shearman & Sterling LLP. NAI is being advised by Evercore as its financial advisor and by Cleary Gottlieb Steen & Hamilton LLP as its legal counsel. For more, see CBS merges with Viacom in long-awaited deal.
Crescent Capital BDC. is buying middle-market lender Alcentra Capital Corp. (Nasdaq: ABDC) for $142 million. “At Crescent Capital Group, we look to invest in niche companies with defensible market strategies and experienced management teams that can survive market cycles," says co-founder Mark Attanasio (pictured).Crescent says buying Alcentra will expand the firm's business development company and private credit services. For Alcentra, the deal was part of the company's strategic review process, and will grow the firm into the upper middle-market, beyond its traditional middle-market range of businesses with $15 million to $75 million in Ebitda. "We are now in a much stronger position and, through the combination with Crescent BDC, will create a larger BDC with a highly complementary portfolio that offers immediate additional value for our stockholders," says Alcentra CEO Suhail Shaikh. Advisors to Crescent include: BofA Merrill Lynch, Kirkland & Ellis and Proskauer Rose. Advisors to Alcentra include: Houlihan Lokey (NYSE: HLI), Sullivan & Worcester LLP, and Dechert LLP.
Verizon Communications Inc. (NYSE: VZ) agreed to sell the blogging platform Tumblr to Automattic Inc., the latest sign the wireless giant is dismantling its online empire. For Verizon, the sale marks a further retrenchment. It has been cutting staff at its online-media division, which was previously called Oath. Read the full story by Bloomberg News: WordPress owner Automattic buys Tumblr from Verizon.
CIT Group in New York has agreed to buy Mutual of Omaha Bank. The $50.6 billion-asset CIT will pay $1 billion in cash and stock for the $8.3 billion-asset Mutual. This is the fifth-biggest bank deal announced in 2019. It excludes Synergy One Lending, Mutual’s mortgage unit. Read the full story: CIT to buy Mutual of Omaha Bank for $1 billion.
Level One Bancorp. has agreed to buy Ann Arbor Bancorp in Michigan. The $1.5 billion-asset Level One t will pay $67.8 million for the $321 million-asset parent of Ann Arbor State Bank. Ann Arbor State Bank has three branches, $230 million in loans and $262 million in deposits. Read the full story: Level One deploys capital from IPO to buy Ann Arbor Bancorp.
Special purpose acquisition company Boxwood Merger Corp. is merging Bernhard Capital Partners-backed Atlas Intermediate Holdings for $710 million. Atlas offers technical services to companies that test inspect, certify, plan, design and manage projects across the transportation, commercial, industrial, government and education sectors. Advisors to Boxwood include: Greenhill & Co., Macquarie Capital, BofA Merrill Lynch, Morgan Stanley, Helena Capital Advisors, Winston & Strawn LLP and Atrium LLP. The advisors to Atlas are Kirkland & Ellis and Harris Williams. Financing is being provided by Macquarie and Natixis.
Dunes Point Capital has invested in Vanguard Packaging Inc., Advanced Logistics & Fulfillment LLC and Great Plains Packaging Inc., collectively known as Vanguard. Advisors to Dune Point include: Ropes & Gray and Alvarez & Marsal Transaction Advisory Group. The advisor to Vanguard is Mesirow Financial. Financial is being provided by Twin Brook Capital Partners and Churchill Asset Management.
Grain Management is buying a majority stake in Ritter Communications, a provider of Internet, phone and video services. Advisors to the target include: Cowen and Co. and Morgan, Lewis & Bockius LLP. Advisors to Grain include: TD Securities and Alston & Bird.
TPG Growth-backed Medical Solutions is buying staffing and recruitment firm C&A Industries. Kirkland & Ellis is representing TPG.
Private investment firm Kaltroco has bought Council Capital's stake in EspriGas. The latter is a data-driven medical and industrial gas company that offers logistics services to a network of gas suppliers.
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
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.
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“We know that different people from different walks of life make us a better firm,” said Adam Miller, director of global talent management at the Riverside Co., which employees more than 200 people across four continents, including two female co-fund managers and a female chief operating officer. “We’re creating more opportunities for broader demographics.” Indeed, just about every private equity firm you talk to these days seems intent on becoming attractive to diverse candidates—whether it’s by hiring a chief diversity officer and loosening its dress code (KKR); giving employees flexible hours to spend more time with children (Riverside); offering up to 12 weeks of paid maternity leave and 16 weeks off altogether (ParkerGale); hosting weekly wine-and-cheese gatherings in the summer (Kinzie Capital); or providing on-site professional development and training (Riverside and ParkerGale). Check out: 5 hiring trends in private equity.
Dealmaking in August began with a bang, as the London Stock Exchange Group Plc agreed to snap up Refinitiv in a $27 billion blockbuster deal. And M&A was hopping in July, with observers predicting the third quarter will be an active one. Meanwhile, here is a table of middle-market deals that closed in the first half of the year, including 3M Co.'s (NYSE: MMM) purchase of MModal's technology business; Apollo Global Management LLC's (NYSE: APO) acquisition of Smart & Final Stores; and KPS Capital Partners' purchase of Brunswick Corp.'s (NYSE: BC) fitness business. For more see, 3M's purchase of MModal's tech business a highlight of H1 dealmaking.
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.
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.
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.
The Association of Asian American Investment Managers (AAAIM) is holding its annual conference from Sept. 4-5 at Convene at 730 Third Avenue in New York.
The Great Lakes ACG Capital Connection is being held at the Westin Book Cadillac Detroit Hotel in Detroit from Sept. 4-6.
ACG Boston and ACG Connecticut are hosting the 5th Annual ACG New England Fall Conference at Gurney's Newport Resort & Marina in Newport, Rhode Island from Sept. 17-18.
Exponent Women is hosting a fall rooftop networking session at RSM in New York on Oct. 7.
M&A East is taking place at the Pennsylvania Convention Center in Philadelphia from Oct. 22-23.
Third Annual Women in Alternative Investments Career Forum is taking place at the New York Hilton on Nov. 8.