M&A wrap: DSW, ABG, Vince Camuto, Jessica Simpson, Harris Williams, KKR, Accordion

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Shoe retailer DSW Inc. (NYSE: DSW) has agreed to acquire the operations of the Camuto Group for $375 million. The target owns the Vince Camuto brand and the footwear licenses of other well-known brands, including Jessica Simpson, Lucky Brand and Max Studio. Through the deal, DSW also gains joint venture participation in the ED Ellen DeGeneres and Mercedes Castilo brands, which are currently managed by the Camuto Group. Additionally, DSW and Authentic Brands Group LLC (ABG), a global brand development, marketing and entertainment company, have agreed to acquire several intellectual property rights involving Vince Camuto and additional brands Louise et Cie, Sole Society, CC Corso Como, Enzo Angiolini, from the Camuto Group under a new partnership, with ABG taking the majority stake. "With our expertise and infrastructure, we're confident this partnership will expand our platform to pursue new market share opportunities and become integral to more consumer purchase decisions," says DSW CEO Roger Rawlins. Earlier in 2018, DSW shuttered Ebuys, the e-commerce company it bought for $62.5 million in 2016. Goldman Sachs & Co. (NYSE: GS) and Wachtell, Lipton, Rosen & Katz are advising DSW. Paul Weiss Rifkind Wharton & Garrison is representing ABG. MMG Advisors and Pryor Cashman are advising Camuto.

Employment is a key focus for business leaders, and acquiring talent is often an important consideration in an M&A transaction, finds a survey conducted by Harris Williams and Inc. "There are benefits in acquiring talent,” says Harris Williams managing director Jason Bass explained. “We certainly see buyers taking organizational charts into consideration, and in many cases that can be a deciding factor in completing a transaction." The fourth annual survey, which focused on exit strategies and growth opportunities, was completed by more than 400 business owners, founders, and leaders. Other notable findings include: 94 percent of respondents are considering a merger, acquisition, or another form of a sale; 70.8 percent of respondents think M&A is more important today than it was one to three years ago; and 54.5 percent of respondents say hiring and retaining employees is the issue that concerns them the most.

Nominations must be received by Monday, Oct. 15, for Mergers & Acquisitions' 2019 edition of The Most Influential Women in Mid-Market M&A. By identifying and featuring dozens of influential women, Mergers & Acquisitions nurtures the community of female leaders and provides role models for women who are at earlier stages of their careers. To be considered, candidates must be women who are outstanding dealmakers both inside and outside of their firms. Evidence of influence in the broader M&A industry is essential. When nominating a candidate, please explain how she outperforms her colleagues at her firm and in the industry. Please provide examples of deals she has led, initiatives she has launched and other instances that show evidence of her influence in the middle market. While considering the merits of candidates, it’s helpful to read about women who have met our criteria in the past, such as Kainos Capital co-founder Sarah Bradley, who graced our 2018 cover. See the profiles of 35 women in our previous edition. Click here to learn more about the criteria and to submit a nomination.

Deal news
TransDigm Group Inc. (NYSE: TDG) is purchasing Esterline Technologies Corp. (NYSE: ESL), a supplier of controls and sensor systems to the aerospace and defense industry, for $4 billion. Morgan Stanley, Wachtell, Lipton, Rosen & Katz and Baker & Hostetler LLP are advising TransDigm. Skadden Arps Slate, Meagher & Flom is representing Esterline, and Goldman Sachs along with Evercore (NYSE: EVR) are advising its board.

KKR & Co. (NYSE: KKR)-backed Calsonic Kansei is near a deal to buy Fiat Chrysler Automobiles NV high-tech car parts unit Magneti-Marelli, according to Bloomberg News. Fiat and KKR are negotiating a valuation of more than 5.5 billion euros ($6.3 billion) including debt. The transaction could exclude small parts of Marelli’s business, such as the unit that makes plastic dashboards and bumpers. Read the full story: KKR's Calsonic near deal for Fiat auto parts unit.

Ontario Teachers' Pension Plan and BC Partners-backed environmental services provider GFL Environmental is merging with waste management company Waste Industries for about $2.8 billion. Simpson Thacher & Bartlett LLP and Stikeman Elliott LLP are advising GFL. Latham & Watkins LLP and Wyrick Robbins Yates & Ponton LLP are advising Waste Industries.

Accordion, a private equity-focused financial consulting and technology firm, announced that it has received a significant minority investment from FFL Partners, a private equity firm focused on growth investments in middle market companies. The investment will be used to expand Accordion’s service offerings for private equity-backed CFOs and their finance teams, attract and acquire additional talent, spur continued geographic expansion, and support the ongoing development of Accordion’s portfolio operations SaaS platform. Since its founding by Nick Leopard in 2009, Accordion has become a respected consulting and technology partner for value creation in the private equity community. Accordion claims it is the only firm focused exclusively within the office of the CFO at private equity-backed companies. As such, its consultants work alongside fund sponsors and their portfolio management teams to design, execute, and support initiatives across the entire finance function, including strategic financial planning and analysis, operational and technical accounting, transaction execution, and a recently launched performance improvement offering.

Celestica Inc. (NYSE: CLS), a manufacturing and logistics company, is buying Impakt Holdings LLC from Graycliff Partners for $329 million. The target offers design engineering and manufacturing services for the semiconductor and solar industries. Moelis & Co. (NYSE: MC), Blake Cassels & Graydon and Arnold & Porter are advising Celestica. Stifel Financial Corp. (NYSE: SF) and Lincoln International are advising Impakt.

Investment bank Piper Jaffray Cos. (NYSE: PJC) has raised its second merchant banking fund at $130 million. The fund will make growth equity investments of up to $15 million across the business services, consumer, healthcare, financial technology and technology sectors. The fund has already made three investments; Mexican fast-casual restaurant chain Cafe Rio; online meal delivery company Foodsby; and data and analytics software company HemaSource.

Highlander Partners has acquired Sferra Fine Linens LLC, a manufacturer of bed, bath and table linens. Lazard Middle Market advised Sferra. Regions Bank, Fifth Third and Norwest Mezzanine Partners provided financing.

North Castle Partners has made a growth investment in VitaCup, a maker of coffee and tea products that are infused with vitamins. First Beverage Ventures invested alongside North Castle.

On Location Events has acquired Future Beat, a provider of VIP experiences for concerts and other events. O'Melveny reprsented Future Beat.

Featured content
With football season underway, Mergers & Acquisitions takes a look at star players who invest in companies through private equity, venture capital and other investment vehicles. New England Patriots quarterback Tom Brady recently teamed with former New York Giants defensive end Michael Strahan (pictured), who is the co-host of ABC’s Good Morning America, to launch a sports media startup called Religion of Sports Media, which has raised $3 million in venture capital funding from CourtsideVC and Advancit Capital. Muhsin Muhammad, who played wide receiver for the Carolina Panthers and the Chicago Bears, is a managing director of private equity firm Axum Capital Partners. Steve Young, former San Francisco 49ers quarterback, is a co-founder of PE firm HGGC. For more, read the full story: Tom Brady, Muhsin Muhammad, Michael Strahan, Steve Young also build companies.

Food & beverage M&A offers plenty of mouth-watering deals. Giants Coca-Cola Co. (NYSE: KO) and PepsiCo Inc. (Nasdaq: PEP) update their product lines with healthy offerings, while private equity firms, such as Brynwood Partners, breathe new life into tried and true brands, like Pillsbury. And lots of buyers experiment with meal kits and delivery methods, fueling M&A. Read the full story: 9 food & beverage companies loved by consumers and dealmakers alike.

Strategic buyers leverage data, sell more snacks and cater to seniors. Mergers & Acquisitions outlines the M&A strategies of 8 corporations, including Best Buy, Energizer, Fortune Brands, Hershey, Nike, P&G, Stanley Black & Decker and Tyson Foods. See the full story: Best Buy, Hershey, Nike, P&G and more wield M&A to grow.

Tyson Foods Inc. (NYSE: TSN), the owner of Hillshire Farm, wants to “feed the world” with its protein brands and will seek acquisitions to help. How Tyson is focusing on what it does best through M&A.

Between 70 and 80 percent of all M&A integration projects fall short of delivering anticipated value. This isn't because the acquisition target is somehow subpar, it's because the acquiring firm lacks a strong integration strategy. Read the full story: How to accelerate value in the first 100 days after an acquisition.

Why investors like diversity. "Companies that are inclusive and also diverse tend to outperform companies that aren't," says investor Lorine Pendleton of Pipeline Angels and Portfolia in this video interview shot at Exponent Exchange, a gathering of 200 female dealmakers. Watch the full video: M&A Insights: Inclusion investing.

Events
M&A East, hosted by ACG Philadelphia and held Oct. 24-25, at the Pennsylvania Convention Center in Philadelphia, brings together 1,300 top strategic and financial dealmakers and leading middle-market advisors for deal sourcing and networking. Featured speakers include Walter Robb, former CEO Whole Foods, and Chris Voss, former FBI lead hostage negotiator. The Women in Dealmaking session will focus on Women in the Board Room.

Exponent Evening with Tequila Casa Dragones, hosted by Exponent Women LLC, a networking group for female dealmakers, held Oct. 25 at The Dream Downtown in New York, features tequila, food and a conversation between Bertha Gonzales Nieves, co-founder and CEO of Tequila Casa Dragones, and Mary Kathleen Flynn, editor-in-chief of Mergers & Acquisitions. For more on networking group’s previous event, see Exponent drew 200 women dealmakers to event featuring Sallie Krawcheck.

ACG Chicago's Family Office Conference, held Nov. 8, at the Westin Chicago River North, brings deamakers together for a "deep dive" into family offices. The event features a keynote by Laurent Roux, Gallatin Wealth Management, and panels, including: Current State of Family Office Direct & Co-Investment Activity, with Gary Levenstein, Nixon Peabody; and Impact of Millennial Generation on Family Office Investment Strategy including Social Impact Investing, with Adam Lieb and Tony Oommen, Fidelity Family Office Services.

ACG Florida Capital Connection, held Nov. 12-14, at the Vinoy Renaissance St. Petersburg Resort & Golf Club, puts “sun and fun” into dealmaking for the middle market, bringing together hundreds of dealmakers. The keynote speaker is Forbes Media CEO Steve Forbes, and the featured speaker for the Women’s Forum is Valerie Crites Fowler, who served as a diplomat in the U.S. Foreign Service for over 29 years, reaching the rank of Minister Counselor in the Senior Foreign Service.

Middle Market Week, hosted by ACG New York and held Nov. 26-30 at various locations throughout New York, brings together leading global middle-market dealmaking professionals to develop and enhance their dealmaking activities, strengthen their long-term relationships, and provide numerous opportunities for networking all week long. Mark your calendar for the Private Equity Annual Wine Tasting Gala on Nov. 28 at Gotham Hall. The building was constructed in the 1920s as the headquarters of the Greenwich Savings Bank. The gala brings together the leading middle market private equity firms for an evening of fine wines and networking.

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