M&A wrap: Energizer, Armor All, STP, A/C Pro, Amazon, Acrosa
Battery maker Energizer Holdings Inc. (NYSE: ENR) is buying Spectrum Brands' global auto care business, including the A/C Pro, Armor All, and STP brands, for $1.25 billion. Spectrum CEO David Maura says the targets are a "terrific complement to Energizer’s existing auto care business, and they have the resources and capabilities to increase investment to further grow the business." Spectrum Brands is a diversified consumer products company that sells batteries, residential hardware and pet supplies. In addition to Energizer batteries, Energizer has an auto care division that consists of car fresheners and polishes that includes the brands: Refresh Your Car!, California Scents, Driven, Bahama & Co., Lexol and Eagle One. In 2018, Energizer reached a deal to buy the Nu Finish Car Polish and Nu Finish Scratch Doctor auto care products from consumer company Reed-Union. RBC Capital Markets, Credit Suisse, and Paul, Weiss, Rifkind, Wharton & Garrison LLP are advising Spectrum. Evercore Inc. (NYSE: EVR) and Bryan Cave Leighton Paisner LLP are advising Energizer. Barclays, Citi and JPMorgan (NYSE: JPM) are providing financing. For more on strategic buyers and their acquisition strategies, see our list: Best Buy, Hershey, Nike, P&G and more wield M&A to grow.
As the holiday shopping season gets underway, the pressure on retailers is more intense than ever, with Sears’ recent bankruptcy filing serving as a cautionary tale. It's been a year since Amazon bought Whole Foods, a game-changer in the retail industry. Technology is driving many of the transactions in the retail industry. Best Buy Co. (NYSE: BBY) recently agreed to spend $800 million to buy GreatCall, a provider of emergency response services for seniors, from Chicago private equity firm GTCR. Meanwhile, GreatCall announced a partnership with on-demand transportation provider Lyft to make it easier for seniors to get car service. “Many of the challenges that retailers are currently facing are due more to a lack of innovation and investment in technology, and that they are not able to compete with Amazon,” said Alex Monahan, a consumer products senior analyst at tax and consulting firm RSM US LLP. “Investors want to see that retailers are adjusting to consumer’s changing preferences and striving to provide seamless multi-channel experiences, while also investing in technology to address the tight labor markets.” Amazon, Walmart, Ikea, Bed, Bath & Beyond and Farm Boy are among the retailers turning to M&A. For full coverage, see 5 trends driving retail M&A deals.
Acrosa Inc. (NYSE: ACA) is acquiring ACG Materials from H.I.G Capital for $315 million. ACG mines, mills, processes, and distributes a broad range of specialty materials for the infrastructure and building materials sectors.
Tenneco Inc. (NYSE: TEN) is buying Öhlins Racing A.B., a Swedish maker of suspension systems for the auto and motorsport industries, for $160 million.
Clearlake Capital has acquired Team Technologies Inc, a provider of custom design and manufacturing services for the cosmetic, dental and medical sectors, from the Riverside Co. William Blair advised Team. Ares Management LP (NYSE: ARES) and Northwestern Mutual Capital are providing financing.
Vestar Capital Partners is investing in Information Resources Inc., a provider of data and predictive analytics. The target is backed by New Mountain Capital. Evecore Inc. (NYSE: EVR), Morgan Stanley, Jefferies and Fried Frank are advising New Mountain and Information Resources. Kirkland & Ellis is representing Vestar. Jefferies Financial Group, Nomura Securities and Ares Management are providing financing.
Swander Pace Capital has acquired Bäckerhaus Veit Ltd., a producer of artisan, European-style breads, rolls, buns and soft pretzel products for retailers and foodservice companies. Duff & Phelps Securities Canada advised the target.
Genstar-backed Mercer Advisors has acquired wealth management firm Financial & Investment Management Group.
Latticework Capital Management has invested in urgent care provider Xpress Wellness Urgent Care.
Sometimes bank mergers are the result of a growth strategy that didn’t follow the script. That was the case with Blue Hills Bancorp which recently agreed to be sold to a much larger competitor, Independent Bank, in the ninth-largest bank deal this year. Read the full story: When best-laid plans fall short, buyers can abruptly become sellers.
The private equity industry will focus on educating lawmakers newly elected in the mid-terms. “As an industry, we will work to educate the nearly 100 new members of Congress about private equity’s positive impact in their communities and their constituents’ lives,” Pam Hendrickson, the chief operating officer of middle-market private equity firm the Riverside Co., tells Mergers & Acquisitions in a Q&A. “We will be talking with them about jobs, investment, and retirement security. We need to make the personal case to each of the new members as well as top leadership in both the House and the Senate. As an example, the incoming chair of the Ways and Means committee Richie Neal is from the State of Massachusetts which had a 15.4 percent annualized return from its PE portfolio over 10 years.” Hendrickson is currently a member of the board of the American Investment Council and a member of the advisory board of the Kenan Institute for Ethics at Duke University. In the past, she has testified before Congress on behalf of the private equity industry. Read the full interview: Post-election priority for private equity: educating 100 new members of Congress. For more on how the mid-term election results are playing out in the middle market, including how former PE professionals Mitt Romney, Bruce Rauner and J.B. Pritzker fared Tuesday night, see Dealmaker’s post-election guide: Mitt Romney, J.B. Pritzker, Dodd-Frank, Pam Hendrickson, Gretchen Perkins.
Across the spectrum of middle-market mergers and acquisitions, there’s a great big middle ground that specialist investment banking firms handle very well. The investment banking business model works when the market itself is working. In this context, a working market means that there are multiple sellers of relatively similar “goods” — professionally run middle-market companies with continuing management teams being traded by professional investors — as well as multiple viable buyers interested in competing with each other to complete a deal. Read the full guest article written by Oaklyn Consulting's Frank Williamson: How mid-market companies can manage crossroads situations.
U.S. middle-market dealmaking in the first three quarters of 2018 surpassed the same period in 2017, according to PitchBook. If the pace continues in the fourth quarter, middle-market deal value may surpass $400 billion for the first time ever. One important question: Will the momentum continue now that the power has shifted in Congress? Mergers & Acquisitions asked Matthew O’Loughlin, partner and co-chair of the mergers and acquisitions practice with Manatt, Phelps & Phillips LLP, to share his thoughts on how the mid-term elections will affect M&A. Read the full story: It's been a good year for M&A. Will momentum continue post election?
Mergers & Acquisitions asked Dan Shea, a managing director at BDO Capital Advisors, to share his thoughts on the election results. Read the full story: Infrastructure investment is an area of potential agreement in Washington.
Mergers & Acquisitions asked Michael Gruber, managing partner at Salveo Capital, to share his thoughts on how the mid-term elections will affect M&A and the cannabis sector. Read the full story: Cannabis investments will likely benefit from new House leadership, Jeff Sessions' departure.
Mergers & Acquisitions identifies 15 cities as fertile communities for dealmaking. We look at metropolitan areas from Austin (where Michael Dell launched a PC business out of his dorm room back in the day and where thousands gather every year for SXSW) to St. Louis (home of private equity firm Thompson Street Capital Partners). Be sure to check out Milwaukee (with private equity firm Robert W. Baird & Co. and investment bank Clearly Gull) and Minneapolis (home of strategic buyers 3M, Best Buy, General Mills, Hormel and Target). And don’t forget Boston, Chicago, New York, San Franciscoand Los Angeles and more. See our list, Dealmaker's guide to 15 cities where M&A thrives.
The Green Bay Packers take on the Seattle Seahawks Thursday night to kick off NFL Week 11. New England Patriots quarterback Tom Brady recently teamed with former Giants defensive end Michael Strahan, 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 CourtsideVCand Advancit Capital. Many NFL players invest in companies. 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 private equity firm HGGC. Mergers & Acquisitions takes a look at star players who invest in companies through private equity, venture capital and other investment vehicles.
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.