M&A wrap: GI, Blackstone, Apollo, KPMG, Lincoln, Platinum, Huron

Mergers & Acquisitions profiles the top 28 investment banks of 2018, with KPMG, Houlihan Lokey, Goldman Sachs (NYSE: GS), William Blair and Lincoln International ranking as the five most active in M&A. The list is based on volume of completed deals, with PitchBook as the data provider. It was a good year for dealmaking, with activity in the U.S. middle market exceeding $400 billion, the first year to achieve the milestone.

Related: Top investment banks: KPMG, Houlihan Lokey, Goldman Sachs, William Blair.
Related: M&A soared in 2018; companies confident about dealmaking in 2019.

Blackstone's (NYSE: BX) stratetgic capital group has acquired a minority stake in middle-market private equity and investment firm GI Partners. The investment provides GI Partners with balance sheet capital to reinvest in the business and engage in strategic initiatives. "GI Partners has established itself as a leading firm in middle-market private equity and real estate investing," says Scott Soussa, head of Blackstone alternative asset management's strategic capital group. San Francisco-based GI has raised over $17 billion since it was founded in 2001. The PE team focuses mainly on the healthcare, IT infrastructure and software sectors. The firm also invests in real estate and infrastructure. For PE firms, selling minority stakes is a path to raising capital for expansion and for some general partners to gain liquidity. In 2018, Dyal Capital Partners, a division of Neuberger Berman, has bought a minority stake in American Securities LLC; the same firm also acquired a minority stake in Clearlake Capital Partners and Vector Capital. Advisors to GI include: Evercore (NYSE: EVR) and Kirkland & Ellis. Blackstone received representation from Simpson Thacher & Bartlett.

Deal news
Advance is buying education technology company Turnitin from Insight Venture Partners and GIC in a deal valued at around $1.75 billion. Advisors to Advance include: Evercore (NYSE: EVR) and Paul, Weiss, Rifkind, Wharton & Garrison LLP. The sellers are being advised by: UBS and Goodwin.

Apollo Global Management LLC (NYSE: APO) is buying a majority stake in Direct ChassisLink from EQT Infrastructure. The target provides container chassis to the transportation sector. Advisors to the sellers include: Citigroup Global Markets and Simpson Thacher & Bartlett.

Carousel Capital has bought Process Barron from the Sterling Group. The target designs, manufactures and installs industrial process fans and material handling systems. Houlihan Lokey (NYSE: HLI) and Willkie Farr & Gallagher advised Sterling.

Platinum Equity is buying a majority stake in Spanish seafood company Grupo Ibérica de Congelados, S.A. Nomura and Ernst & Young are advising the target.

SFW Capital Partners has invested in Greenshades Software, a provider of payroll tax and human capital management software services.

Boeing (NYSE: BA) has purchased ForeFlight, which offers mobile and web-based aviation products, such as data.

Genstar Capital-backed Mercer Advisors bought wealth management Confluence Financial Advisors.

Huron Capital-backed Sciens Building Solutions has acquired Empire Electric, Maintenance, and Service and Empire Fire Safety, which offers design, engineering, installation, compliance testing, maintenance and monitoring for fire detection, suppression and electrical systems.

Featured content
In Mergers & Acquisitions' annual look at strategic buyers, we see significant deals aimed at enhancing the customer relationship, including Amazon.com Inc.'s (AMZN) purchase of PillPack, Nike Inc.'s (NYSE: NKE) acquisitions of Invertex Ltd. and Zodiac Inc. and Target Corp.s' (NYSE: TGT) acquisition of Shipt. Technology plays a key role in many transactions. But while technology is enabling developments, it’s not an end unto itself for many corporations. Instead, strategic buyers are using innovations as a means to achieve goals. Based on analyzing hundreds of recent deals, Mergers & Acquisitions has identified seven goals corporate dealmakers hope to accomplish through M&A transactions today: Integrate data with software; improve the customer experience and relationship; expand and improve distribution; process payments more efficiently; leverage tech trends, like autonomous vehicles; make manufacturing processes more efficient; and achieve better outcomes and efficiencies in healthcare. “Strategics have been really active,” says John Neuner, managing director, Harris Williams. “They are aggressive in pursuing the assets they want, as long as it fits within their strategy. Scale is critical to them, and they have to meet consumer demands by adding new capabilities.”

Related: 7 reasons why smart companies Amazon, Nike, Target are doing M&A.

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.

Related: 10 private equity firms share strategies for tech M&A.

Independent sponsors must rely on others for the capital to close deals. Having a working relationship with a PE firm provides the independent sponsor with an ally and leverage while negotiating the best deal possible. Read the full guest article by Boyne Capital Partners' Derek McDowell: How to structure a winning PE-independent sponsor partnership.

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.

Related: Meet the 2019 Most Influential Women in Mid-Market M&A.

Mergers & Acquisitions has closed the nomination process for the 2018 M&A Mid-Market Awards. We look forward to announcing the winners in March. The Awards are one of three special reports we produce each year to celebrate deals, dealmakers and dealmaking firms. The other two are The Rising Stars of Private Equity and The Most Influential Women in Mid-Market M&A.

Related: Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.

Events
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 Philadelphia is hosting its 2nd annual Industry Tour focused on SaaS & Tech-Enabled Services on March 12 at the Union League of Philadelphia. Last year's event brought together 200 PE investors, investment bankers, operating companies and industry advisors from around the country.

The Women's Private Equity Summit will be held at the Monarch Beach Resort in Dana Point, California, March 13-15. The Summit will bring together more than 550 female professionals in private equity and venture capital.

The ACG Chicago Women’s Network is hosting a lunchtime conversation with Dorri McWhorter, the CEO of YWCA Metropolitan Chicago, on March 19 at the University Club in Chicago.

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.

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