M&A wrap: FanDuel, PokerStars, HC, Landon, Warburg Pincus, HKW, Kimmeridge

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Flutter Entertainment Plc is buying The Stars Group Inc. in a $6 billion all-share deal to create the world’s biggest online gaming group and take advantage of opportunities in the U.S. after the Supreme Court legalized sports betting. Flutter owns the FanDuel fantasy sports site and Stars owns the PokerStars brand. The latter has partnerships with casinos including Reno, Nevada’s Eldorado Resorts Inc. and recently signed a deal with Fox Sports. "The combination will turbocharge our existing four-pillar strategy and provide world-class capabilities across sports betting, gaming, daily fantasy sports and poker, as well as greater geographical and product diversification," says Flutter CEO Peter Jackson. Sports betting is rapidly gaining traction in the U.S., and that is spurring mid-market deals. "The combination with Flutter will further enhance our company’s core strengths, and position us strongly for the future in this rapidly evolving industry," says adds Star CEO Rafi Ashkenazi. Goldman Sachs (NYSE: GS) and PJT Partners were financial advisers to Flutter. Barclays Plc, Moelis & Co (NYSE: MC)., BMO Capital Markets and Jones Day advised Stars. Read the full story by Bloomberg News: FanDuel owner buys Pokerstars site.

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. Middle-market loans offer a potential growth path for PE firms, Including Adams Street, Balance Point. Carlyle Group (Nasdaq: CG) and VSS , many of whom view credit as a natural extension of their bread-and-butter operations. Read our full coverage: Private equity firms are becoming lenders. Here’s why.

At Mergers & Acquisitions, we've begun work on one of our most popular projects of the year: the Most Influential Women in Mid-Market M&A. The deadline for nominations is Oct. 14. Last year, we honored 36 women, including Marilyn Adler (Medley Capital), Jennifer Cotton (Madison Capital Funding), Nishita Cummings (Kayne Anderson), Venita Fields (Pelham S2K), Jeri Harman (Avante Mezzanine Partners), Pam Hendrickson (the Riverside Co.), Gretchen Perkins (Huron Capital) and Trisha Renner (Baird). Who will make it on this year's list? 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. An important guide to what we're looking for can be found in the dealmakers we've honored in previous years. See profiles of, and Q&As with, past honorees here.

TO NOMINATE A CANDIDATE, CLICK HERE.

DEAL NEWS
HC Private Investments and family office Landon Capital Partners have formed Evolution Managers Capital, a platform for emerging private equity managers to launch their own investment efforts. The fund will make lower middle-market deals that are valued up to $100 million. Evolution expects to commit up to $50 million in equity in each participating firm. “Our goal is to fill a void in the market by providing seasoned investment professionals an alternative path to launch their own efforts,” says LCP managing partner Chris Sullivan.

Warburg Pincus has acquired pet health insurer Petplan. "As a long-term investor in the insurance sector, we see incredible potential in Petplan given its leading position in an underpenetrated and growing market," says Warburg Pincus managing director Jeff Stein. Cozen O'Connor advised Petplan and Wachtell, Lipton, Rosen & Katz advised Warburg Pincus.

Centre Partners-backed Vision Innovation Partners has bought Metropolitan Ophthalmology Associates, a ophthalmology practice with locations in Chevy Chase, Maryland and McLean, Virginia.

FUNDRAISING
HKW has raised its fifth fund at $365 million. The PE firm invests in businesses that have up to $30 million in Ebitda across the business services and health and wellness sectors. Thomas Capital served as HKW's placement agent.

Kimmeridge Energy Management Co. has raised its fifth fund at at $800 million. The energy-focused PE firm acquires and develops unconventional assets in top-tier basins. Sidley Austin represented Kimmeridge.

DEAL TRENDS
The global M&A market recorded its second–worst performance since the 2008 launch of Willis Towers Watson’s Quarterly Deal Performance Monitor (QDPM), run in partnership with Cass Business School. North American companies struggled to unlock value from their deals for an eighth consecutive quarter, recording the worst performance of all regions. The report also found that deals are taking longer to close: an average 140 days for the first nine months of 2019 compared to 119 days for the same period in 2018.

The U.S. is the best performing market for venture capital generating an average of internal rate of return of 14.36 percent, according to eFront. However, the region is one of the slowest to return capital with an average 3.86 years.

PEOPLE MOVES
Leslie Wolff Golden has been hired as managing director at digital infrastructure investment firm Digital Colony. She was most recently with Macquarie.

FEATURED CONTENT
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. Most recently, the New York firm announced the final close of its latest global real estate fund. 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, on the occasion of his new book, What It Takes: Lessons in the Pursuit of Excellence, published by Avid Reader Press/Simon & Schuster, and released on Sept. 17. Schwarzman, who is speaking at the Economic Club of New York on Sept. 18, shared his perspective on the private equity model, its resilience during recessions and how the industry has evolved over three decades. Read the full story: "Complete control" is the beauty of private equity, says Blackstone's Stephen A. Schwarzman.

Bank M&A has been soaring, creating the perfect backdrop for Piper Jaffray’s announced acquisition of Sandler O’Neill & Partners LP. “There has been a lot of consolidation in the bank space,” Piper Jaffray CEO Chad Abraham told Mergers & Acquisitions. “But there are still 5,000 banks, and we expect the pace of consolidation to continue.” Piper Jaffray is determined to be the market leader in all the industries it does business in. The Minneapolis-based boutique investment bank currently dominates some of the sectors it serves, especially healthcare. With the acquisition of New York-based Sandler the renamed firm Piper Sandler will instantly become a leading investment bank in financial services, a sector Piper has sought to expand in for several years. For analysis of the deal, see Counting on bank M&A: Why Piper Jaffray bought Sandler O'Neill.

The New York Yankees finished first place in the American League East division with one of the best overall records in Major League Baseball. Alex Rodriguez is best known as the former 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 Leaguefullback Chris Gronkowski. Rodriguez talked about his life off the field at EisnerAmper’s 4th annual Alternative Investment Summit. Among the topics discussed: 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.

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
The Virginia Capital Conference is being held on Oct. 2 at the Jefferson Hotel in Richmond, Virginia.

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 Oct. 22-23.

ACG Charlotte is hosting Deal Crawl at the Mint Museum in Charlotte, North Carolina Nov. 6-7.

Third Annual Women in Alternative Investments Career Forum is taking place at the New York Hilton on Nov. 8.

ACG New York is hosting Middle Market Week in New York from Nov. 11-15.

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