M&A wrap: M&A Mid-Market Award winners, Robert F. Smith, Vista Equity, Audax, Stifel Ford, GE, Airon, Coronavirus, MJH Life, Insight Partners, TSG, Pine Island, Bain
In the challenging times we face now, it’s more important than ever to come together as a community and recognize the people and companies that excel and lead. We invite you to join us in honoring the 2019 winners of Mergers & Acquisitions’ M&A Mid-Market Awards. In contrast with the volatile coronavirus-driven conditions unfolding in 2020, the dealmaking environment of 2019 was remarkably stable. Private equity enjoyed a record-breaking year, with firms raising more money than they had in any previous year. Among the PE firms benefitting from the auspicious fundraising climate was Vista Private Equity, which raised a $16 billion fund – the largest technology-focused PE fund ever raised. Mergers & Acquisitions is honoring Vista founder and CEO Robert F. Smith with our 2019 Dealmaker of the Year Award. In addition to leading his firm’s unprecedented fundraising, Smith excelled in philanthropy. When he spoke at the commencement of Morehouse College, he announced he would pay off all the student loans of the HBCU’s 2019 graduates, providing a helping hand in the student debt crisis facing many U.S. families. The financial services sector saw a lot of consolidation in 2019. Piper Jaffray wins our 2019 Deal of the Year for buying Sandler O’Neill to form Piper Sandler, which instantly became a leading investment bank in the financial services sector. And Stifel wins our 2019 Investment Bank of the Year for growing dramatically and making several acquisitions. Read our full awards coverage: Meet the winners of Mergers & Acquisitions’ M&A Mid-Market Awards.
Ford (NYSE: F) and GE Healthcare are partnering with Airon Corp. where the latter will its license Model A ventilator design to GE Healthcare, and Ford will offer its manufacturing resources to produce 50,000 ventilators in 100 days, with the ability to produce 30,000 a month thereafter as needed. “All of us at Airon are honored at the opportunity to unite with Ford and GE Healthcare to help bring large numbers of ventilators to the front lines to help in the fight against this horrific virus”, says Eric Gjerde, president of Airon. Morgan Lewis & Bockius represented Airon and Hogan Lovells advised Ford.
MJH Life Sciences has acquired the Pharmacy Benefit Management Institute from Pharmaceutical Strategies Group. “Credible information is critical to healthcare professionals during this global pandemic, and education about how it will impact drug benefit management is vital,” says Mike Hennessy Jr., CEO of MJH Life Sciences.
The coronavirus continues to impact the global economy. In the middle market, companies are proactively drawing down on revolving lines of credit and other sources of financing to put cash on the balance sheet to weather the storm. Mergers & Acquisitions interviews dealmakers from Alvarez & Marsal, Merrill Corp., M33 Growth, M-III Partners, Paul Hastings and the Riverside Co. Read our full coverage: “Brace for impact,” say private equity firms to portfolio companies about the coronavirus
There is no question the global pandemic is disrupting the M&A landscape, injecting significant uncertainty into the deal-making market. In addition to delaying or derailing potential transactions, Covid-19 is forcing M&A practitioners to assess appropriate risk allocation mechanisms to address the impact of the virus on global business operations, including Representations and Warranties Insurance (RWI). Read the full story: How the coronavirus forces dealmakers to assess effectiveness of RWI policies.
Genuine economic deterioration is a primary risk to private capital markets – PE tends to behave as a GDP-linked business. As consumer spending and business investment is set to decline, we expect to see a slowdown in PE transaction volume that follows the expected economic contraction. Read the full story: Private equity deals will slow down, as global economy stalls amid coronavirus pandemic.
While the long-term economic impact on American companies remains uncertain, there are important lessons to learn on how to manage future pandemic risks. Read the full story: Coronavirus contingency planning checklist for the middle market.
The coronavirus threat is the type of risk that material adverse change, or MAC, clauses are designed to address in M&A. Why the coronavirus makes material adverse change (MAC) clauses more important than ever.
Insight Partners has raised its eleventh fund at $9.5 billion that will focus on software investments. The firm will invest up to $350 million in equity in deals. “We are grateful that through economic cycles and unprecedented circumstances, Insight Partners remains a sought-after institutional platform for supporting next generation software companies," says Insight managing director Deven Parekh. For more on fundraising, see PE fundraising scorecard: Audax, CD&R, L Squared, Seidler.
TSG Consumer Partners has acquired a majority stake in in Pathway Vet Alliance LLC from Morgan Stanley Capital Partners. Pathway is an owner and operator of over 270 general practice, specialty and emergency veterinary hospitals. Ropes & Gray LLP, BofA Securities, Guggenheim Securities LLC and William Blair advised TSG. Debevoise & Plimpton LLP and Harris Williams advised the sellers.
Pine Island Capital Partners and Bain Capital Credit have acquired Precinmac Precision Machining, a diversified manufacturer of high-precision machined parts and assemblies for companies in the aerospace & defense, semiconductor and industrials sectors, from GenNx360 Capital Partners. Compass Partners Capital is investing alongside Pine Island and Bain Capital. Houlihan Lokey, Alantra and Winston & Strawn advised the sellers. Willkie Farr & Gallagher advised Compass. Paul Hastings LLP advised Pine Island and Davis Polk & Wardwell advised Bain.
For more deal announcemens, see Weekly wrap: Thoma Bravo, Palo Alto, BabyQuip.
Once venture capital-backed startups themselves, today’s tech giants know a thing or two about VC seed money. It’s fitting that many of them have created corporate venture capital groups of their own. These CVCs help their owners experiment and nurture new technologies and ideas in the early stages, without requiring the commitment of an acquisition. The CVC strategy often augments a company’s research and development efforts as well as complementing its M&A strategy. Middle-market dealmakers would be wise to track the VC investments of the five companies we highlight: Amazon.com Inc. (Nasdaq: AMZN), Google (Nasdaq: GOOG), Intel (Nasdaq: INTC), Microsoft Corp. (Nasdaq: MSFT) and Salesforce.com Inc. (NYSE: CRM. Read our full coverage: Venture forth: How five of the biggest tech companies explore new territory through early-stage investments.
In a period of accelerating technology innovation and investment, it’s critical to stay aware of new technologies, offerings, data and analytics types and business models in your space, and adjacent spaces. Most companies are looking for ways to get better and earlier access to the startup space. While corporate venture capital (CVC) is only one method, it can be a fairly powerful one. Read full coverage: How corporations can benefit from VC investments in technology
Houlihan Lokey, Lincoln International, Jefferies Financial Group, William Blair and Piper Sandler Cos. rank as the top five most active M&A investment banks in 2019, based on the volume of completed private equity-backed deals in the U.S., according to PitchBook. Besides advising on M&A deals, the investment banks on the top 10 list also had a busy year with acquisitions of their own in 2019, including two acquisitions by Houlihan Lokey and three by Stifel Financial. Piper Sandler Cos., was created when Minneapolis-based Piper Jaffray Cos. acquired New York-based Sandler O’Neill & Partners in a deal representing more than half of Piper Jaffray’s $930 million market capitalization. The firm also had another acquisition in 2019 and sold a company to exit the traditional asset management business. See our full coverage: Top investment banks for PE-backed deals in 2019: Houlihan Lokey led the pack.
Audax, HarbourVest and Genstar ranked as the top three most active private equity firms in 2019, based on the volume of completed deals in the U.S., according to PitchBook. Three companies tied for fourth place: Abry, Carlyle and Shore Capital. Where were these PE firms looking for deals? Eight of the firms on our list name the software and technology sector among their top investment targets, and seven put healthcare companies on their priority list. Financial services and consumer services are each named by five of the firms as industries they focus on, with four naming business services companies. Fundraising from investors in 2019 led to two notable fund launches earlier in 2020: KKR’s Global Impact Fund and HarbourVest’s $2.6 billion HarbourVest Fund XI. See our full coverage: Top private equity firms in U.S. deals in 2019: Audax Private Equity ranked No. 1.
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 Influenital Women in Mid-Market M&A. For an overview of what we're looking for in each project, including timelines, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.
Axios co-founder and CEO Jim VandeHei is hosting an online conversation on April, 3 called: Trust in Crisis: Lessons from Leaders. The discussion will feature Dallas Mavericks owner Mark Cuban, Michigan governor Gretchen Whitmer and Edelman CEO Richard Edelman.