M&A daily wrap: Gryphon, Tyson Foods, Walmart, Microsoft, Carlyle, self-driving cars, aerospace M&A

Gryphon Investors has acquired a majority stake in Water's Edge Dermatology, a provider of dermatology services throughout 33 locations in Florida. The target offers general and cosmetic dermatology, vein health, Mohs surgery, and radiation oncology services. “At Gryphon, we see growing demand for dermatological services, powered by a rapidly aging population, increasing rates of skin cancer, and rising interest in cosmetic services,” says Gryphon principal Luke Schroeder. “Thanks to its commitment to providing high quality clinical care in convenient locations with a focus on outstanding customer service, Water’s Edge is uniquely positioned to use the favorable dynamics in the overall dermatology sector to lead on an even broader scale.” Houlihan Lokey Inc. (NYSE: HLI), Kirkland & Ellis and Jones Day advised Gryphon. Harris Williams and McDermott Will & Emery advised Water's Edge. PE firms are in investing in dermatology practices and other areas of healthcare that are ripe for consolidation. For more, read our in-depth feature: Why private equity firms like veterinarians, opthamologists and dentists.

Kohlberg & Co. has agreed to buy Tyson Foods Inc.'s (NYSE: TSN) Sara Lee frozen bakery and Van's businesses. The deal includes the Chef Pierre, Bistro Collection and Van’s brands, along with manufacturing facilities in Tarboro, North Carolina and Traverse City, Michigan. “These are great assets with outstanding team members; however, we’re focused on expanding Tyson Foods’ leadership position in protein,” says Sally Grimes, group president of Tyson prepared Foods. Rothschild & Co. is advising Tyson. Tyson recently announced plans to buy the poultry rendering and blending assets of American Proteins Inc. and Ampro Products Inc. for $850 million.

Microsoft Corp. (Nasdaq: MSFT) has agreed to buy GitHub Inc., the code repository company popular with many software developers, for $7.5 billion in stock. The acquisition provides a way forward for San Francisco-based GitHub, which has been trying for nine months to find a new chief executive officer and has yet to make a profit from its popular service that allows coders to share and collaborate on their work. Read the full story: Microsoft broadens software reach with Github deal.

Advent International has agreed to acquire an 80 percent stake in Walmart Inc.'s (NYSE: WMT) Brazil business. Walmart, which will keep the other 20 percent, says selling a portion of the division will position it best for long term growth. Goldman Sachs & Co. (NYSE: GS) is advising Walmart. Credit Suisse, Euro Latina Finance, and Ropes & Gray are advising Advent.

Harvest Partners LP has bought the Dwyer Group from the Riverside Co. Dwyer offers repair and maintenance services on commercial and residential properties through 20 brands, including Neighborly. Harris Williams, William Blair and Jones Day advised the sellers. Jefferies, Moelis & Co. (NYSE: MC) and White & Case advised Harvest.

Clearlake Capital-backed Wheel Pros, a distributor of branded tires, has purchased Amcor Industries Inc. a seller of lug nuts and wheel locks. William Blair advised the buyer.

Hexagon AB, a sensor software maker, has purchased AutonomouStuff, a producer of self-driving cars technology. The target has around $45 million in annual sales.

With summer road trips in mind, check out our slideshow on auto deals: Car parts makers fuel M&A, as industry readies for self-driving vehicles. Highlights include: Intel bought Mobileye, and Delphi bought nuTonomy. Meanwhile, Clearlake and Wabash National are scooping up makers of traditional car parts.

Masonite International Corp. (NYSE: DOOR) has acquired wood door manufacturer AADG Inc. The target owns the Graham Manufacturing Corp. and the Maiman Co. brands, and generated about $70 million in sales in 2017.

Middle-market private equity firm Livingbridge has bought Loveholidays, a U.K.-based online travel agent. Harris Williams advised the buyer.

For more deal announcements, including acquisitions from MGM and Polaris, read the The weekly wrap: Blackstone, MGM, Polaris.

For more on PE fundraising, read the full story: PE fundraising scorecard: Crestview Partners and Genesis Capital.

Frank Carlucci, who served as chairman of Carlyle from 1993-2003, has passed away at the age of 87. Carlucci was instrumental in transforming Carlyle from a boutique investment firm into a respected global institution. "His wisdom, knowledge and stature helped us make smarter investments decisions and form fruitful relationships around the world. The blessings of his friendship and partnership will forever be a part of our hearts and firm," Carlyle said in a statement.

Jim Burke has been hired as CEO at Carlyle-backed ZeroChaos, a workforce management services company. Burke was most recently the CEO at eDiscovery firm Advanced Discovery.

Dimitri Drone has joined investment bank Houlihan Lokey as a managing director in New York, where he will focus on pharmaceutical and life sciences valuation services. Drone previously led PwC's deals business in the same sector.

Sarah Zeng has joined law firm Orrick's M&A practice in Beijing. Most recently with Denton, Zeng focuses on cross-border M&A involving China-based companies.

The Carlyle Group LP (Nasdaq: CG) has a raised a new collaterized loan obligation (CLO) fund, Carlyle US CLO 2018-1, valued at $611 million. The fund will invest mostly in senior secured loans. Carlyle raised four CLO funds in 2017.

More covenant-lite loans are “bleeding down” to the middle market, says Twin Brook Capital Partners co-founder Trevor Clark in this video interview, in which he discusses the downside of loosening lender protections. “There are clearly some groups out there that haven’t had as much experience lending through a credit crisis." Twin Brook won Mergers & Acquisitions' M&A Mid-Market Award for 2017 Lender of the Year.

To gain insights on how lenders evaluate potential transactions in today's highly competitive market, we asked Madison Capital Funding's chief underwriting officer Jennifer Cotton to share her thoughts. Read the full story here: Abundance of capital drives highly competitive loan process, says Madison Capital's chief underwriter.

Aircraft and aircraft parts companies, including maintenance, repair and overhaul businesses, will drive a strong environment for middle-market dealmaking in aerospace and defense in 2018, according to new report from a Miami investment bank. Cassel Salpeter & Co., which chiefly advises middle-market sellers in the sector, predicts in its Aviation Investment Banking Q1 2018 Update that tax reform and increased defense spending in the U.S. will help boost overall aerospace and defense M&A. Robust new jet plane orders and parts manufactured for those new planes will also contribute. Read the full story: Aerospace and defense M&A will soar, says Cassel Salpeter.

Mergers & Acquisitions seeks to profile Rising Stars of Private Equity, and we’d like your help identifying candidates. The individuals we select will be featured on our website, www.TheMiddleMarket.com, beginning in mid-July, and in the July/August issue of our magazine. We’re looking for individuals who are full-time private equity investors and whose best days are expected to be in the future. These are the folks you predict will one day play a key leadership role at your PE firm – or heading up their own. There is no specific criteria, but investing in middle-market companies and growing them should be the focus of day-to-day activities. Promising candidates may have been recently promoted, or have recently launched a new endeavor. Most will not be at the partner level yet. There is no age cut-off. The nomination process is informal, and all decisions will be made by our editorial team, which is headed by Editor-in-Chief Mary Kathleen Flynn. Please email suggestions, questions and comments to [email protected]. In the email subject line, please include: “Rising Stars of Private Equity Candidate" and the PE professional's name and firm. Tell us why you think the individual stands out, and why his/her path is heading up. The deadline is Fri June 8. For more details, read the full story: Who are the Rising Stars of Private Equity? Nominate candidates by June 8. And for related content, see the Most Influential Women in Mid-Market M&A, including our slideshow.

“The rise in private debt has been tremendous over the last three or four years,” says Sunil Mehta, managing director, Madison Capital Funding LLC, in this video interview shot at ACG InterGrowth 2018. Investors from all over the globe are attracted to this asset class. “There aren't very many asset classes that have performed this consistently over the last 10 or 15 years, and you have asset managers in the class that have been able to perform for not only two or three years but for decades.” Madison, a subsidiary of New York Life Insurance Co., has long been a stellar source of capital in the middle market. Watch the video: Investors from all over the globe are attracted to private debt, says Madison's Sunil Mehta.

“If there's one theme we're seeing across all of our deals, it is the digital transformation of all companies,” says Matt Conaty, director, financial sponsors, William Blair, in this video interview, shot at InterGrowth 2018. “Every business today is looking for ways to become more automated, to become more sophisticated in the way that they use their data and the way that they access their customers.” William Blair won Mergers & Acquisitions’ M&A Mid-Market Award for 2017 Investment Bank of the Year. Watch the video: Digital transformation is the name of the game, says William Blair’s Matt Conaty.

"You have to go out and make deals happen; they’re not going to occur on their own,” says TA Associates managing partner Ajit Nedungadi about the private equity firm’s focus on deal origination. Headquartered in Boston, TA has invested about $20 billion in nearly 500 companies since the firm was founded 50 years ago in 1968. We asked Nedungadi about TA’s investment strategy in Europe and the firm’s culture, including the focus on proprietary deal flow. Read the full story: At TA Associates, “you’re either working a live deal or hunting for the next one.”

“At the end of the day, it really matters how you behave if there’s a problem,” says Karin Kovacic, managing director, East Coast region, of middle-market lender Monroe Capital. Watch our video interview, which was shot at ACG InterGrowth 2018: Trust counts in lending to the middle market, says Monroe Capital’s Karin Kovacic.



In Mergers & Acquisitions’ updated Buyer’s Guide, we profile nine categories of product and services designed to help M&A professionals perform in today’s highly competitive dealmaking arena. Read the full story: From fund administrators to VDRs, dozens of firms help M&A pros compete.

Read full coverage of Mergers & Acquisitions' 11th annual M&A Mid-Market Award winners: Campbell Soup, Huron Capital, Idera CEO Randy Jacops, LLR Partners, McGuireWoods, Stryker, Twin Brook and William Blair.