M&A wrap: Foot Locker, Goat, Flight Club, BB&T, SunTrust, Thoma Bravo
Foot Locker Inc. (NYSE: FL) is buying a minority stake in secondary sneaker retailer Goat Group for $100 million. The investment will expand Goat's online and brick-and-mortar presence, while it grows its global operations. The target operates under the Goat and Flight Club brands. "At Foot Locker we are constantly looking at new ways to elevate our customer experience and bring sneaker and youth culture to people around the world," says CEO Richard Johnson. "Together, Foot Locker and Goat Group's shared commitment to trust and authenticity in the sneaker industry will provide consumers with unparalleled experiences and diversified offerings." Goat follows a recent string of investments for Foot Locker including: women's luxury activewear brand Carbon38, children's lifestyle brand Super Heroic, and footwear design academy Pensole. Businesses are vying to deepen their relationships with customers through new services. Amazon.com Inc. (Nasdaq: AMZN) bought online pharmacy PillPack for nearly $1 billion to deliver medications packaged by dose. Target Corp. (NYSE: TGT) purchased Shipt Inc. for approximately $550 million to leverage a network of shoppers who deliver everyday items, such as fresh groceries, to customers' homes.
Technology M&A is thriving, and private equity firms are hot on the trail of innovations that will drive sustainable value to customers and make companies more efficient, more effective and less expensive to run. Among the developments appealing to PE investors are: artificial intelligence, data management, data virtualization, digital marketing, healthcare IT, industrial automation, the Internet of Things, machine-to-machine learning, payment processing and Software-as-a-Service. To gain more insights into what kinds of tech deals will dominate the field in 2019, Mergers & Acquisitions reached out to 10 private equity firms that are active investors in technology: Francisco Partners, Genstar, Great Hill, HGGC, Insight, LLR, Riverside, Silver Lake, TA and Vista.
Call for nominations
Time is running out. Nominations are due Feb. 8 for Mergers & Acquisitions' 12thAnnual M&A Mid-Market Awards, which will honor leading dealmakers and deals that set the standard for transactions in the middle market in 2018. CLICK HERE TO SUBMIT NOMINATIONS.
BB&T has agreed to buy SunTrust in to create a $442 billion-asset juggernaut in the Southeast. The companies will combine in an all-stock transaction valued at $66 billion. BB&T will own 57 percent of the combined company, which will be rebranded and based in Charlotte, N.C. when the deal closes. The biggest bank merger in two decades is expected to close in the fourth quarter. Read the full story: BB&T, SunTrust to combine in $66B merger.
Thoma Bravo is buying energy software provider Aucerna. The target offers information and data to help energy investors and operators make better decisions. Goldman Sachs (NYSE: GS) and PageMill Partners are advising Aucerna. Kirkland & Ellis is advising Thoma Bravo. Golub Capital, Owl Rock Capital and Fortress Investment Group LLC are providing financing.
L Catterton has made an investment in Grupo MYT, a restaurant operator in Mexico. The target owns the Moshi Moshi, La Imperial, Cocina Abierta and La Crepe Parisenne brands. “With an impressive portfolio of restaurant concepts focused on the most relevant and fastest-growing cuisine genres in Mexico, Grupo MYT is ideally positioned for continued growth,” says L Catterton partner Farah Khan.
The Riverside Co. has purchased Praetorian Digital, a learning and content platform for local governments.
BV Investment Partners has acquired Intelliteach, a business services provider for law and accounting firms, from Dominus Capital.
Avalara Inc. (NYSE: AVLR) has acquired Indix's ariticial intelligence technology, which expands Avalara's data tax service offerings.
Kevin Campbell was promoted from president of global consulting to CEO at Bridge Growth Partners-backed at data analytics company BackOffice Associates. Campbell joined BackOffice in 2018, and he was previously the COO of Oscar Insurance Corp.
Andy Fincher has been named CEO at family office HBM Holdings. Fincher was most recently the CEO of Dover Engineered Systems, a division of Dover Corp. (NYSE: DOV).
Ennio Montinaro was hired by Oak Hill Capital Partners as chief administrative officer, and Todd Cullen has joined as a senior advisor, where they are helping the PE firm focus on data analytics. Montinaro was previously with Nomura and Citi. Cullen was most recently with KPMG.
Matthew Roberts has joined Columbus-based M&A advisory firm Copper Run as vice president, leading northeast Ohio operations. He was previously with MelCap Partners.
Michael Sirkin has joined Jamieson Corporate Finance as chairman and managing director, where he is focusing on M&A. Sirkin was most recently with Proskauer Rose.
Mergers & Acquisitions asked leading dealmakers about their outlook for the middle market in 2019. Watch the video conversations, shot at ACG Philadelphia's M&A East: It is a seller's market, and deal activity is expected to remain steady, says Ramsey Goodrich of Carter Morse & Goodrich: Outlook 2019: Great time to sell. Private equity firms and strategic buyers will use their excess cash and capital to look for deals, says Bharat Ramprasad of Stifel Nicolaus: Outlook 2019: Excess capital to fuel M&A. Rising interest rates and regulatory changes may increase volatility, cautions Mark Emrich of Murray Devine: Outlook 2019: Keep an eye on rising interest rates.
Bank volume was steady, but deal values would have been the lowest in years if not for one big, and very intriguing, transaction. For more, see: Bank M&A: What January data hints about 2019.
Not only do carve-outs account for 10 percent of all M&A activity, the percentage of carve-outs conducted by buyout firms (as opposed to strategic buyers) is on the rise, and sharply at that. And that’s important, because, at the risk of overextending the curveball analogy, the carve-out is ‘filthy stuff.’ The inherent complexities of the deal can puzzle even serial acquirers. Write Accordion's Gary Appelbaum and Eric Salit in this guest article: Carve-out curveball: How to hit a home run.
Consumerization of healthcare, high-deductible health plans, and more self-payment by patients are contributing to the overall increased demand for PT services, write Battery Ventures general partner Chelsea Stoner in this guest article: Rising demand for physical therapy drives deals.
Mergers & Acquisitions has named 36 leaders the 2019 Most Influential Women in Mid-Market M&A, including Kainos Capital's Sarah Bradley, Kayne Anderson Capital Advisors' Nishita Cummings and Pelham S2K Managers' Venita Fields. All 36 are outstanding dealmakers both inside and outside of their firms. This year, we asked the featured dealmakers to tell their own stories through Q&As, including their advice for women.
ACG Atlanta is hosting Atlanta ACG Capital Connection at the Hotel at Avalon and Alpharetta Convention Center in Atlanta from Feb. 5-7. The event brings together private equity investors, corporate development officers and lenders.
The SBIA and the AM&AA are hosting a Deal Summit at The Doral in Miami from Feb. 20-22. The gathering offers networking opportunities with senior-level M&A advisors and lower middle-market private equity investors.
ACG New York hosts the 11th Annual Healthcare Conference at the Metropolitan Club in Manhattan on Feb. 28. Dealmakers network with healthcare-focused private equity investors and other industry professionals.
ACG Minnesota and Corvus North are hosting AIM: A Women's Leadership Conference at the Minneapolis Hyatt on March 7. The conference is designed to support and encourage female leaders to grow and achieve success throughout their career journeys.
ACG New York's Women of Leadership is hosting a golf event and reception on March 21 at Konnect Golf in Manhattan. The event brings together female dealmakers from private equity firms, investment banks and lenders.