M&A wrap: GTCR, Piper Jaffray, Sandler O'Neill, Transom, Transom, Audax, Exponent Women

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Looking for a glimpse of what’s to come in the private equity industry? Meet the 10 dealmakers named by Mergers & Acquisitions as the 2019 Rising Stars of Private Equity:

Austin Collier, Branford Castle Partners
Kevin Cunningham, LNC Partners
Shawn Domanic, Sterling Partners
Stephen Jeschke, GTCR (pictured)
Danielle Lalli, Huron Capital
Jason Mironov, TA Associates
James Oh, Transom Capital Group
Sophia Popova, Summit Partners
Pavan Tripathi, Bregal Sagemount
Christine Wang, Francisco Partners

The Rising Stars share a common set of core values. They are passionate about building companies. They are naturally curious and interested in changing things for the better. They enjoy working with portfolio company managers, investment bankers and other deal team members. They appreciate the responsibility and autonomy their firms have given them. They are grateful for the leaders who have helped shape their careers, and they are generous with their own time when it comes to nurturing the next generation. As the PE industry goes through a generational shift and many firm founders retire, it's well worth getting to know these emerging leaders. They represent the future of private equity.

For profiles and video interviews, see Meet Mergers & Acquisitions' 2019 Rising Stars of Private Equity
For Q&As, see 10 Rising Stars of Private Equity tell their tales

Gender-diverse PE investment committees outperformed all-male investment committees substantially, finds a recent study by Oliver Gottschalg, a professor at HEC Paris. The results are compelling: Gender-diverse PE investment committees outperformed all-male investment committees substantially, as measured by several metrics: 7 percent more alpha; .52x more total value to paid-in multiple; and 12 percent higher internal rate of return. Also impressive: the failure rate of gender-diverse investment committees was 8 percent lower. The findings provide concrete evidence showing the value of including women on deal teams and may help to convince skeptics. Women still hold just 9.4 percent of senior positions at PE firms globally, the report found, indicating the industry still has a long way to go before reaping the benefits of gender diversity.

The low representation underscores the importance of projects that feature successful female dealmakers, such as Mergers & Acquisitions' Most Influential Women in Mid-Market M&A. Networking groups, such as Exponent Women, play a crucial role in developing communities for women dealmakers. The New York group is hosting its second annual Exponent Exchange on July 11 at Second in New York. The event last year brought together 200 women.

For more, see: Why private equity firms should include more women on deal teams
How to build gender diversity into deal teams
Most Influential Women in Mid-Market M&A

DEAL NEWS
Piper Jaffray (NYSE: PJC) is buying Sandler O'Neill for about $500 million. The combined company will be called Piper Sandler, and will focus on M&A, fixed income, equity research and sales and trading. “Piper Jaffray is very focused on competing in market sectors where we can be a market leader and leverage our specific expertise," says Piper CEO Chad Abraham. Read the full story: Piper Jaffray to buy Sandler O'Neill for nearly $500 million.

IBM (NYSE: IBM) closed its $34 billion purchase of Red Hat, sealing the world’s second-largest technology deal ever and setting up the iconic U.S. company on a path to try to compete with top software purveyors in the cloud. Read the full story by Bloomberg News: IBM closes Red Hat acquisition.

Transom Capital Group has acquired Conair Corp.'s professional liquid division. The target makes branded and private label hair care, color and styling products for salons and retailers. James Oh, who is one of Mergers & Acquisitions' 2019 Rising Stars of Private Equity, led the transaction for Transom. Advisors to Conair include: Sawaya Partners and Paul, Weiss, Rifkind, Wharton & Garrison LLP. Advisors to Transom include: Latham & Watkins and Perkins Coie. Financing was provided by Cerberus Business Finance.

Audax Private Equity is buying surgical consumable products, including the Bard-Parker brand, from Hill-Rom Holdings Inc. for $170 million. The target produces surgical accessories such as safety scalpels. Goldman Sachs (NYSE: GS) and Jones Day are advising Hill-Rom.

Pritzker Private Capital has acquired a stake in Valicor Environmental Services, a provider of non-hazardous wastewater treatment services, from Wind Point Partners. Houlihan Lokey (NYSE: HLI), Raymond James and Kirkland & Ellis advised Valicor.

Trilantic North America-backed Taymax Group Holdings has bought MJ Fitness, a Planet Fitness franchisee in Alabama. Advisors to MJ include: Fidus Partners and Locke Lorde. Kirkland & Ellis represented Taymax.

Osceola Capital-backed Industrial and Institutional Sales Group has acquired Professional Foodservice Marketing. The target offers outsourced sales and marketing services for foodservice and janitorial manufacturers.

Silver Oak Services Partners-backed Keystone Partners has purchased the career transition and leadership development business operations from Kensington International.

Frontier Capital has invested in GovQa, a provider of government workflow software.

Teleo Capital Management has acquired Paxia, a Software-as-a-Service provider for airline and catering companies.

PEOPLE MOVES
Dana Carey has joined MidOcean Credit Partners as chief investment officer. Carey was previously with Apollo Global Management (NYSE: APO).

William Cooling was hired by private equity firm TSG Consumer Partners as a managing director. He was most recently with Jefferies.

Jordan Copland has joined Clearlake-backed SaaS company Symplr as chief financial officer, and Brian Fugere was hired as chief marketing officer. Copland most recently served as CFO at Quorum Business Solutions, and Fugere was mostly the CMO at Virence Health.

Julien Darmon was hired by investment bank William Blair as a managing director and Alvaro Hernandez joined as a director. Darmon was most recently with Baird, while Hernandez was most recently with PwC. They both focus on the industrials sector.

Laura Miller has been promoted to president at Shore Capital Partners-backed SouthStar Urgent Care. Miller Joined SouthStar in 2018 as chief operating officer and will continue to serve in that role.

Garrett Sussman was hired by energy infrastructure-focused investment firm Prostar Capital as head of portfolio management, and Brooke Callaghan was hired as head of investor relations. Sussman was most recently with KPMG, and Callaghan was previously with Apollo Management.

FEATURED CONTENT
Alex Rodriguez is best known as the New York Yankees star who hit 696 home runs over the course of his 22-year baseball career, but today he’s making a name for himself as an investor as the founder and CEO of A-Rod Corp. One recent example: While serving as a guest judge on CNBC’s Shark Tank, Rodriguez backed Ice Shaker, an insulated bottle maker founded by former National Football League fullback Chris Gronkowski. Rodriguez talked about his life off the field as a savvy investor since his 20’s as the keynote speaker at EisnerAmper’s 4th annual Alternative Investment Summit at the The Museum of Modern Art on June 19. Among the topics discussed in a conversation led by Charles Weinstein, CEO of EisnerAmper: Rodriguez’ childhood as the son of a single mom; his investment thesis, which shares much with other middle-market investors; how he’s helping singer/dancer/actress Jennifer Lopez (to whom he became engaged in March) transition her business initiatives from licensing her brands to owning them; and how one day he just might buy a baseball team. Read the full story: A-Rod talks Ice Shaker, NRG eSports, J. Lo & maybe buying a baseball team.

Activity and urgency characterize the current dealmaking environment, say investment bankers and other M&A advisors interviewed by Mergers & Acquisitions. After a record-breaking 2018, forecasts for 2019 remain bullish. Advisors point to a lot of cash that must be deployed by strategic buyers and private equity firms alike; a healthy U.S. economy; and low interest rates. Competition for high-quality targets has never been more intense, especially for technology providers, they report, which means sellers are commanding high prices. It all adds up to a seller’s market. A mood of urgency prevails, as dealmakers seek to close deals quickly, while conditions remain favorable. The advisors interviewed for this story say they don’t see signs of a recession this year; however they are closely monitoring bellwethers, including corporate earnings, wage pressure, global supply chains and slowdowns abroad. They are recommending that clients be prepared for an economic slowdown in the next two years. Specialization is the name of the game, and investment bankers advise clients to seek targets with business-model stability, limited cyclical exposure and a recurring revenue business model. Technology, business services, healthcare, consumer and manufacturing are among the most promising sectors. Read the story: 8 M&A advisors urge closing deals now, while economy stays strong.

In today’s accelerated private equity environment, the urgency for the PE deal team to begin creating value and delivering results in line with the investment thesis begins on day one. That said, few fund sponsors have a defined process for identifying and addressing the leadership requirements that could undermine the value creation trajectory. Read the full article by Summit Leadership Partners' Dan Hawkins and Todd Fryling: Six steps to develop a post-close talent playbook.

The private equity industry has shifted focus from financial optimization to operational improvement, but with the latter already well-explored, where do we go from here? Firms that want to stand out must look to other areas of portco businesses to create value, and no aspect is riper for innovation than human capital. Read the full article by Alpine Investors' Graham Weaver: Focus on the human factor to drive value creation, urges Alpine.

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 Nike, award winners include: Fortive, TA Associates, the Riverside Co., Harris Williams, Monroe Capital, Goodwin and Luminate Capital Partners' Hollie Haynes. Read our full coverage: Meet the winners of the M&A Mid-Market Awards: Nike, Fortive, TA, Harris Williams.

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 hosts the Annual Exchange, which brings a trusted network of women dealmakers together for a focused day of robust content and networking, at Second in New York, on July 11. The Exchange provides attendees with opportunities to establish new connections, reinforce existing ones and absorb timely and relevant knowledge from industry leaders.

InIVest 2019 is being held from July 16-17 at the New York Marriott Marquis. The event brings together more than 1,500 executives from the wealth management industry.

The Women's Connection Golf Clinic & Networking event takes place on July 17 at the Granite Links Golf Club in Quincy, Massachussets. The event is being hosted by ACG Boston.

ACG Seattle hosts the Northwest Middle Market Growth Conference at the Fairmont Olympic Hotel in Seattle on July 25.

ACG New York's summer dealmaking conference takes place at Gurney's Star Island Resort & Marina in Montauk, NY, July 31-Aug.1.

The Great Lakes ACG Capital Connection is being held at the Westin Book Cadillac Detroit Hotel in Detroit from Sept. 4-6.

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