M&A wrap: Goodwin, Centene, Wellcare, Nautic, Bain, TPG

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Goodwin has won Mergers & Acquisitions' M&A Mid-Market Award for 2018 Law Firm of the Year. In 2018, Goodwin grew by double digits across key financial metrics, marking the firm’s sixth consecutive year of record revenue and profits. Technology-rich practice areas drove this growth: The firm’s private equity and life sciences practices both grew revenues by 31 percent; technology revenues were up 18 percent; and real estate revenues were up 17 percent. Goodwin’s headcount growth for these practices has soared over the past five years, with the life sciences practice increasing its headcount by 500 percent to 100-plus lawyers, the private equity practice by 350 percent to more than 250 lawyers and the technology companies practice by 257 percent to more than 200 lawyers. The law firm prides itself on sitting “at the intersection of capital and innovation.” As a firm representative put it, “In today’s technology-driven economy, every company, even one not selling ‘technology,’ is significantly technology-enabled and dependent. From an investor perspective, it is no longer sufficient to simply understand how to execute a venture or a private equity deal. Rather, investors are looking for lawyers who understand technology and how it impacts the viability of a target investment. In other words, there’s an ongoing convergence of capital and innovation, and this convergence requires legal advisors who are equally fluent in both worlds. This is a Goodwin hallmark.”

Excelled. Innovated. Inspired. That’s what the eight winners of Mergers & Acquisitions’ 12th Annual M&A Mid-Market Awards did in 2018. Our awards honor the leading dealmakers and deals that set the standard for transactions in the middle market. In addition to the Monroe Capital, award winners include: Nike, Fortive, TA Associates, the Riverside Co., Harris Williams, Goodwin and Luminate Capital Partners' Hollie Haynes and more. Read our full coverage: Meet the winners of the M&A Mid-Market Awards: Nike, Fortive, TA, Harris Williams.

Related: Read more about Mergers & Acquisitions' three annual special reports, including the M&A Mid-Market Awards, the Rising Stars of Private Equity, and the Most Influential Women in Mid-Market M&A.

Deal news
Health insurer Centene Corp. (NYSE: CNC) agreed to buy managed-care provider WellCare Health Plans Inc. (NYSE: WCG) for more than $15 billion, expanding in the market for government insurance plans. Both insurers have erected significant businesses around U.S. government health programs. Centene, which has roughly 14 million members, is focused on Medicaid and Affordable Care Act markets. WellCare also offers Medicaid and Obamacare coverage and has a large Medicare business; it counts about 5.5 million members overall, according to regulatory filings. Read the full story from Bloomberg News: Centene buys Wellcare.

Middle-market private equity firm Nautic Partners has raised its ninth fund at $1.5 billion. The firm focuses on the healthcare, industrials and outsourced services sectors. In 2018, the PE firm sold fasteners distributor Endries to MSD Partners. Nautic was founded in 1986 as part of Fleet Financial Group, and was spun out in 2000. Kirkland & Ellis advised Nautic.

Bain Capital Double Impact has acquired a majority stake in Rural Sourcing, a provider of outsourced digital technology and IT services to Fortune 1000 companies. Morris Manning & Martin LLP represented Rural Sourcing, and Goodwin Procter represented Bain. Financing was provided by Bank of Montreal.

TPG is buying Entertainment Partners, a workforce management and automated production software provider to the entertainment industry. Skadden, Arps, Slate, Meagher & Flom LLP and American Discovery Capital are advising the target.

Bessemer Investment Partners-backed MAS Restaurant Group has acquired restaurant operator KorMex Foods. With this acquisition, MAS now operates 73 Taco Bell restaurants, including two co-branded KFC and six co-branded Pizza Hut Express restaurants.

People moves
Ila Afsharipour was hired by investment bank KeyBanc Capital Markets as a managing director and head of the higher education and not-for-profit public finance group. He was previously with U.S. Bancorp.

Andrea Prochniak has joined Perella Weinberg Partners as a managing director and global head of investor relations and corporate affairs. She was most recently with AllianceBernstein.

Featured content
The way consumers shop continues to change. Customers want to put their own touch on products, not wait too long for them and in most cases, never step foot in a store to buy them. Apparel and sneaker retailers, such as Foot Locker (NYSE: FL) and Nike Inc. (NYSE: NKE), are embracing these challenges by snatching up companies that can provide customized products to customers, and advancing digital capabilities to businesses. Read the full story: How retailers are gaining new customers.

The NCAA Tournament has gone from 68 to 16 teams, with all four No. 1 seeds, including overall No. 1 seed Duke University remaining in the Sweet 16. This year, March Madnessoffers fans unprecedented access to online betting, thanks to a May 2018 U.S. Supreme Court ruling. More Americans are expected to place bets on the college basketball tournament than the Super Bowl, with the American Gaming Association's predicting that about $8.5 billion in wagers will be placed on the tournament. Online betting and data companies, including sportsbooks from DraftKings, FanDuel and Caesars, are drawing basketball fans and interest from investors. M&A is rampant throughout the sector. Here's a look at recent online gaming and sports data deals.

Related: March Madness: DraftKings, FanDuel, Action Network draw fans, dealmakers.

What’s driving adaptive reuse, and how can private equity tap into this increasingly common but misunderstood and under-analyzed property segment? Adaptive reuse, which involves repurposing a building designed originally for something else, is fast becoming a global phenomenon; from turn-of-the-century warehouses to castles to train stations, developers and investors have untapped enormous value from obsolete building stock.

Related: Why private equity investors should consider adaptive reuse.

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.

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.

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 investment banks in private equity-backed deals. The list is based on volume of completed PE-backed 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 in PE-backed deals: KPMG, Houlihan, GS, William Blair
Related: M&A soared in 2018; companies confident about dealmaking in 2019.

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.

Events
Exponent Women LLC is hosting an evening of networking and conversation with leading economists at the New York office of Alliance Bernstein on April 4. Speakers include Lindsey Piegza, chief economist, Stifel Fixed Income, and Kathleen Fisher, head of wealth and investment strategies, Alliance Bernstein.

InterGrowth 2019 is taking place from May 6-8 at the Waldorf Astoria & Hilton Bonnet Creek in Orlando, Florida.

Innovation Works is holding its second annual AI/Robotics Venture Fair in Pittsburgh from on May 15 and 16.

ACG Chicago is hosting the Midwest Capital Connectionat The Marriott Downtown Magnificent Mile from May 21-22.

ACG New York, ACG Boston and ACG Philadlephia are holding the Industrial Conference with Value Creation at the Infor in New York on June 6. The event is part of the Northeast Industry Tour.

ACG Minnesota is hosting the The Upper Midwest ACG Capital Connection at the Renaissance Minneapolis Hotel, The Depot from June 10-11.

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