M&A wrap: Hershey, One Brands, Pilgrim's Pride, Hain Celestial, HGGC, Transom
The Hershey Co. (NYSE: HSY) is acquiring nutrition bar maker One Brands for $397 million. “Our beloved confection brands will continue to be the engine that drives our business while we broaden our better-for-you portfolio, offering more snacking choices for more consumers," says Hershey chief growth officer Mary Beth West. One Brands will complement Hershey's Oatmega business, which was acquired as part of the 2018 acquisition of Amplify Snack Brands Inc., and its recent investment in FulFil Holdings Ltd. “Our consumer proposition, brand equity and team provide us with confidence, especially when combined with an industry leader like Hershey,” adds One Brands CEO Peter Burns. One Brands offers a portfolio of nutrition bars that contain 20 grams of protein and one gram of sugar per bar. The bars are certified gluten-free and come in flavors such as pumpkin pie, cinnamon roll, chocolate chip cookie dough and white chocolate truffle. Food conglomerates are diversifying their product lines to appeal to consumers who are opting for healthier snacks. Atkins owner Simply Good Foods Co. (Nasdaq: SMPL) is buying Quest Nutrition, and earlier in 2019, PepsiCo Inc. (Nasdaq: PEP) bought the Muscle Milk brand from Skippy peanut butter maker Hormel Foods Corp. (NYSE: HRL). In 2018, Hershey acquired Pirate Brands from B&G Foods Inc. (NYSE: BGS).
Poultry products supplier Pilgrim's Pride Corp. (Nasdaq: PPC) is buying European prepared foods supplier Tulip Ltd. from Danish Crown for $354 million. "The transaction represents the logical next step in our evolution to expand our geographical footprint, enhance our value-added portfolio and reduce volatility across our business with a more stable margin profile," says Pilgrim's CEO Jayson Penn.
Ebro Foods SA has bought European rice brand Tilda from Hain Celestial Group Inc. (Nasdaq: Hain) for $342 million. Hain CEO Mark Schiller says the divestiture "is consistent with our transformational plan to simplify our portfolio, strengthen our core capabilities and expand margins and cash flow." Credit Suisse advised Hain.
TriWest Capital Partners-backed Lithion Power Group has acquired battery pack maker Aved Electronics. The deal gives Aved the opportunity to expand its operations, customer base and product offerings by leveraging Lithion’s experience in both cell manufacturing and battery pack assembly.
Harvest Partners has invested in Integrity Marketing Group., a distributor of life and health insurance products. HGGC is keeping a majority stake in the target. Advisors to Integrity and HGGC include Goldman Sachs (NYSE: GS) and Morgan Stanley. Harvest is being advised by Evercore (NYSE: EVR). Financing was provided by: Owl Rock Capital, Crescent Capital, Antares and Harvest Partners SCF.
Transom Capital Group-backed Transom Bravo Holding has acquired skateboard maker Dwindle Distribution from Globe International. The target owns the Almost, Blind, Darkstar, Dusters, Enjoi, Speed Demons, Superior and Tensor Trucks brands. Russ, August, and Kabat LLP advised Transom. The sellers were advised by D.A. Davidson and Buchalter & Nemer LLP.
Altas partners is buying chemicals supplier DuBois Chemicals from the Jordan Co. “For Altas, this investment is the culmination of a multi-year effort to identify a world-class platform and team that we can partner with in the specialty chemicals industry," Altas partner David Brent.
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
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.
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Prokanga is a unique recruiting firm that offers full-time and flexible recruiting services. Prokanga is managed by co-founders Jamie Cheney and Lesley Finer (pictured). Mergers & Acquisitions spoke with Finer, who has more than 10 years of recruiting for the finance industry and leads the finance practice at Prokanga. For more, see Why financial services pros need flexibility.
M&A was hopping in July, with observers predicting the third quarter will be an active one. Meanwhile, here is a table of middle-market deals that closed in July, including H&R Block Inc.s (NYSE: HRB) purchase of Wave Financial; Arsenal Capital's backing of Seal for Life; and Colony Capital Inc. (NYSE: CLNY)'s deal for Digital Bridge. Read the full story: H&R Block's purchase of Wave among deals that closed in July.
“We know that different people from different walks of life make us a better firm,” said Adam Miller, director of global talent management at the Riverside Co., which employs more than 200 people across four continents, including two female co-fund managers and a female chief operating officer. “We’re creating more opportunities for broader demographics.” Indeed, just about every private equity firm you talk to these days seems intent on becoming attractive to diverse candidates—whether it’s by hiring a chief diversity officer and loosening its dress code (KKR); giving employees flexible hours to spend more time with children (Riverside); offering up to 12 weeks of paid maternity leave and 16 weeks off altogether (ParkerGale); hosting weekly wine-and-cheese gatherings in the summer (Kinzie Capital); or providing on-site professional development and training (Riverside and ParkerGale). Check out: 5 hiring trends in private equity.
PE firms push for organizational innovation with a long-term view, and are structurally equipped to take a move fast and build things approach. Read the full guest article by Chicago Pacific Founders' Matthew Doyle: Why private equity investors are hidden innovators.
BC Partners has joined the growing group of private equity firms selling a minority stake to another PE firm to fuel expansion plans. Earlier in August, the firm, which is headquartered in London with additional offices in New York, Paris and Hamburg, announced it had sold an interest in the firm to New York’s Blackstone Alternative Asset Management for undisclosed terms. PE firms increasingly are selling minority stakes to fund expansion plans. For more see, Why private equity firms sell stakes to other firms.
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 sellers' 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.
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 Influential Women in Mid-Market M&A. For more on the timeline and nomination process for each, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.
The Association of Asian American Investment Managers (AAAIM) is holding its annual conference from Sept. 4-5 at Convene at 730 Third Avenue in New York.
The Great Lakes ACG Capital Connection is being held at the Westin Book Cadillac Detroit Hotel in Detroit from Sept. 4-6.
ACG Boston and ACG Connecticut are hosting the 5th Annual ACG New England Fall Conference at Gurney's Newport Resort & Marina in Newport, Rhode Island from Sept. 17-18.
Exponent Women is hosting a fall rooftop networking session at RSM in New York on Oct. 7.
M&A East is taking place at the Pennsylvania Convention Center in Philadelphia from Oct. 22-23.
Third Annual Women in Alternative Investments Career Forum is taking place at the New York Hilton on Nov. 8.