M&A wrap: Dyal, #GivingTuesday, Cleveland-Cliffs, Astellas, PepsiCo, AEI, HKW, Wind Point

dyalcapital

Dyal Capital Partners, a division of Neuberger Berman, has closed its fourth fund at $9 billion, making it the largest fund ever raised to acquire minority stakes in PE firms. The fund has invested in ten firms: H.I.G. Capital, Clearlake Capital Group, HPS Investment Partners, Golub Capital, Bridgepoint, American Securities, HGGC, I Squared Capital, Arcmont Asset Management and Owl Rock, commiting about 64 percent of capital. Dyal has formed minority partnerships with 41 firms and the firm's new fund will seek to make investments in about 15 PE firms. "As the private equity industry continues to grow and evolve, we want to remain the go-to strategic partner for established firms," says Michael Rees, head of Dyal Capital. In order to grow and expand into new areas of business, private equity firms have been selling minority stakes to Dyal and other large investment firms over the last few years, as Mergers & Acquisitions has previously covered. About 51 percent of the fund's capital comes from North America and more than a third comes from Asia. Dyal along with co-investment funds manage about $21.6 billion in assets.

It’s #GivingTuesday, when many people strive to contribute to their communities. At Mergers & Acquisitions, we're covering the philanthropic and volunteer initiatives underway in the private equity industry. Last year, we published The Big Give, an in-depth look at how private equity firms are contributing. Efforts have continued to flourish, fueled by younger Millennials seeking to build a better future and by mature partners considering the legacy they will leave behind. Read our full coverage: Private equity gives back: Vista's Robert F. Smith, Clearlake's José E. Feliciano, Riverside employees.

The holiday shopping season is well under way, the biggest period of the year for the retail industry. Mergers & Acquisitions is covering many M&A trends in the sector. This week we're featuring the fourth installment of a weekly series on the 7 technologies retailers are investing in: The Internet of Things enables enhanced personalization, such as custom drive-thru menus. Artificial intelligence applications predict customers’ needs. Modern data centers and warehouses fill orders quickly. Robots assist with sorting and packing consumer goods. Voice- and text-assisted technology provides customers with hands-free shopping experiences. Analytics give retailers a better understanding of consumer behavior and habits. Mobile payment processing provides consumers with on-the-go convenience. Check back every week for a new installment.

DEAL NEWS
Iron material producer Cleveland-Cliffs Inc. (NYSE: CLF) is merging with steel products manufacturer AK Steel Holding Corp. (NYSE: AKS) in a deal valued around $3 billion. Moelis & Co. (NYSE: MC), Credit Suisse and Jones Day are advising Cleveland-Cliffs. Goldman Sachs (NYSE: GS) and Weil, Gotshal & Manges LLP are advising AK Steel.

Astellas Pharma Inc. is buying Audentes Therapeutics Inc. (Nasdaq: BOLD) for about $3 billion, the latest deal by a pharmaceutical company eager to push into promising gene-therapy technologies. Astellas is targeting gene therapy as a key driver for the company’s growth. Gene therapy is a promising new area of medicine that has sparked growing enthusiasm as well as a flurry of deals. Read the full story by Bloomberg News: Astellas buys Audentes in gene-therapy deal.

AE Industrial Partners has acquired AIM MRO, a manufacturer of engineered repair products for the aerospace sector. Kirkland & Ellis and Ernst & Young advised AEI. Duff & Phelps and Robbins Kelly Patterson & Tucker advised the target.

Align Capital Partners-backed Pleatco Filtration has bought TVS Filters, a maker of air filter cartridges. Founders Advisors advised the target.

HKW has invested in Traductions Serge Bélair Inc., a translation services provider to businsesses. Taft Stettinius & Hollister LLP advised HKW. Blakes, Cassels & Graydon LLP advised TSRB. National Bank Financial provided financing.

PepsiCo. (Nasdaq: PEP) is buying better-for-you popcorn maker BFY Brands, the maker of PopCorners snacks. The target will join PepsiCo's Frito-Lay North America division.

Genstar Capital and Oak Hill Capital-backed Mercer Global Advisors has purchased wealth management firm Adam Financial Associates. DeVoe & Co. represented Adam.

Wind Point Partners-backed STG Logistics has acquired Veeco Holdings. The target offers logistics services that mainly focuses on the gateway ports in New York and New Jersey.

PEOPLE MOVES
Christopher Giancarlo has joined law firm Willkie Farr & Gallagher LLP as senior counsel. Giancarlo is the former chairman of the U.S. Commodity Futures Trading Commission, where he oversaw regulation of the futures, options and swaps derivatives markets, including a focus on regulatory guidance for emerging technologies, such as blockchain technology and cryptocurrencies.

Yvonne Gyimah and John Stiffler have joined FTI Consulting Inc. (NYSE: FCN) as senior managing directors. Gyimah was previously with EY and focuses on carve-outs. Stiffler was most recently with West Monroe Partners, and concentrates on IT strategy, due diligence and post-merger intergration.

Scott Webb was promoted to partner at middle-market investment bank Carl Marks Advisors. Webb focuses on restructuring and distressed M&A.

Romina Weiss has joined law firm Goodwin as a partner. She concentrates on tax matters related to M&A.

FEATURED CONTENT
Esteemed M&A attorney Martin (“Marty”) Lipton was honored at a black-tie event hosted by the Institute of International Education at The Pierre in New York on Oct. 30. Called the “the king of M&A,” the co-founder of New York law firm Wachtell, Lipton, Rosen & Katz, is well known to dealmakers as the architect of the anti-takeover defense strategy known as the “poison pill.” Lipton was awarded the IIE Stephen P. Duggan Award for Mutual Understanding “in recognition of his lifetime of extraordinary achievement and his lasting contribution to international higher education. Read the full story: Martin Lipton, inventor of the “poison pill” anti-takeover defense honored by IIE.

It’s a milestone year for the Blackstone Group Inc. (NYSE: BX), which transitioned from a publicly traded partnership to a corporation on July 1. The New York firm announced the final close of its latest global real estate fund recently. With $20.5 billion of total capital commitments, Blackstone Real Estate Partners IX is the largest real estate fund ever raised. Mergers & Acquisitions spoke with Stephen A. Schwarzman, the firm’s co-founder, chairman and CEO. Read the full story: "Complete control" is the beauty of private equity, says Blackstone's Stephen A. Schwarzman.

The private equity model has held up very well over the decades, continuing to outperform the public markets, even as economic cycles come and go. But the rate of growth has slowed, leading PE firms to seek adjacent areas of business to expand. As PE firms face increased pressure to produce higher returns on their investments, many of them are turning to a familiar area of business: lending. Adams Street Partners, Balance Point Capital, Carlyle and VSS are all actively engaged in lending. Read the full story: Private equity firms are becoming lenders. Here’s why.

Prokanga is a unique recruiting firm that offers full-time and flexible recruiting services. Prokanga is managed by co-founders Jamie Cheney and Lesley Finer (pictured). Mergers & Acquisitions spoke with Finer, who has more than 10 years of recruiting for the finance industry and leads the finance practice at Prokanga. For more, see Why financial services pros need flexibility.

Looking for a glimpse of what’s to come in the private equity industry? Meet Mergers & Acquisitions' 2019 Rising Stars of Private Equity. As the PE industry undergoes a generational shift, and many firm founders retire, it’s well worth getting to know these emerging leaders, including Branford's Austin Collier, Sterling Partners' Shawn Domanic and Summit Partners' Sophia Popova. 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.

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 Influential Women in Mid-Market M&A. For more on the timeline and nomination process for each, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.

EVENTS
CB Insights hosts The Collective, featuring 30-plus fireside chats, at New World Stages Dec. 10-11. Mergers & Acquisitions editor-in-chief Mary Kathleen Flynn is slated to interview Lance Barton, head of corporate development for dating site developer Match Group.

The Annual AM&AA Winter Conference is taking place in Scottsdale, Arizon fron Jan. 8-10.

Deal Wave is being hosted by ACG Orange Country at the Ritz-Carlton-Laguna Niguel in Dana Point, California on Jan. 9.

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