M&A wrap: Hershey, Pirate's Booty, Walmart, Cornershop, Francisco Partners
The Hershey Co. (NYSE: HSY) is buying Pirate Brands from B&G Foods Inc. (NYSE: BGS) for $420 million. The deal includes the Pirate's Booty, Smart Puffs and the Original Tings snack brands. Hershey says Pirate Brands is a good fit for consumers seeking snacks with clean labels and no artificial flavors, colors or preservatives. “We expect the full Pirate Brands portfolio to be a great fit for Hershey’s growing Amplify business which is targeted toward consumers who are looking for great-tasting snacks without compromise," says Hershey chief growth officer Mary Beth West. Hershey bought SkinnyPop popcorn owner Amplify in 2018 for $1.6 billion. Food conglomerates are diversifying their product lines to appeal to consumers who are opting for healthier snacks. In 2017, Conagra Brands Inc. (NYSE: CAG) bought Angie's Aritisan Treats, the owner Boomchicapop popcorn brand, and Kellogg Co. (NYSE: K) paid $600 million for nutrition bar maker RXBar. "By selling Pirate Brands at a very attractive multiple and using the net proceeds to reduce long-term debt, we will significantly reduce our leverage, which positions us very well for future acquisitions," adds B&G CEO Robert Cantwell. B&G bought Pirate Brands in 2013 for $195 million. Ropes & Gray is representing Hershey. Dechert is representing B&G.
Mergers & Acquisitions outlines the M&A strategies of 8 corporations, including Best Buy, Energizer, Fortune Brands, Hershey, Nike, P&G, Stanley Black & Decker and Tyson Foods. See the full story: 8 strategic buyers leverage data, sell more snacks, cater to seniors.
More than 57 percent of institutional investors plan to allocate their capital to private equity, according to a Preqin survey. The number is the second highest proportion of any alternative asset class after real estate. About 90 percent of investors found that PE performance has either met or exceeded their expectations in the last 12 months, and 86 percent plan to maintain or increase their PE investments in the next year.
Walmart Inc. (NYSE: WMT) has acquired Cornershop Inc. an online marketplace for on-demand delivery in Chile and Mexico, for $225 million. The target delivers food, healthcare and other packaged products from a number of retailers. "We are focused on making life easier for customers and associates by building strong local businesses, powered by Walmart,” says Walmart International CEO Judith McKenna. Gunderson Dettmer advised Cornershop.
Chicago Pacific Founders Fund has invested SightMD, an operator of 24 ophthalmology practices. McGuireWoods LLP represented Chicago Pacific. Cross Keys Capital advised SightMD.
Francisco Partners-backed Bomgar is buying BeyondTrust, a provider of privilege-centric security, from Veritas Capital.
Geneva Glen Capital has acquired EZ Shipper, a provider of recoverable shipping racks to the nursery industry.
Swander Pace Capital has acquired Fine Choice Foods, a manufacturer of fresh and frozen Asian-flavored appetizers. The target sell its items under the Sum-m! brand.
Park National in Newark, Ohio, has agreed to buy CAB Financial in Spartanburg, S.C. The $7.5 billion-asset Park said it will pay $141.8 million in cash and stock for the parent of the $730 million-asset Carolina Alliance Bank. The deal, which is expected to close in the first half of 2019, priced CAB at 186 percent of its tangible book value. CAB has seven branches in North Carolina and South Carolina and a loan production office in Charlotte, N.C. Read the full story: Park in Ohio doubles down in the Carolinas with latest acquisition.
Ryan Horstman was hired by Trinity Hunt Partners as chief operating officer and chief compliance officer. Horstman was previously the chief financial officer at PE firm Kildare Partners.
Alex Rohan has joined B. Riley FBR's corporate restructuring group as a senior managing director. Rohan was previously with Guggenheim Securities and Jefferies.
Food & beverage M&A offers plenty of mouth-watering deals. Giants Coca-Cola Co. (NYSE: KO) and PepsiCo Inc. (Nasdaq: PEP) update their product lines with healthy offerings, while private equity firms, such as Brynwood Partners, breathe new life into tried and true brands, like Pillsbury. And lots of buyers experiment with meal kits and delivery methods, fueling M&A. Read the full story: 9 food & beverage companies loved by consumers and dealmakers alike.
Why investors like diversity. "Companies that are inclusive and also diverse tend to outperform companies that aren't," says investor Lorine Pendleton of Pipeline Angels and Portfolia in this video interview shot at Exponent Exchange, a gathering of 200 female dealmakers. Pendleton looks to invest in companies led by diverse entrepreneurs, which she defines as entrepreneurs of color, LGBT entrepreneurs, women, veterans, and disabled entrepreneurs. She also backs companies that have products and services that cater to those markets. "People think that they are niche markets, but they're actually growing in terms of spending dollars and market size." Pendleton spoke on a panel moderated by Mergers & Acquisitions editor-in-chief Mary Kathleen Flynn at Exponent Exchange. For more, see Exponent drew 200 women dealmakers to event featuring Sallie Krawcheck.Watch the full video: M&A Insights: Inclusion investing.
The energy industry is teeming with M&A activity, as companies seek to improve operations. Hubbell and Ingersoll Rand are among the strategic buyers. Private equity firms acquiring include AE Industrial Partners, Clayton, Dubilier & Rice and Genstar Capital. Companies in the energy industry are focused on improving operational efficiencies and analytical capabilities. The issues are urgent for oil and gas companies, because depressed prices mean profits are hard to come by, says Caroline Blitzer Phillips, who advises clients on energy deals as a partner at law firm Vinson & Elkins. They are also essential for renewable energy, which “has been quite expensive in some cases, because the infrastructure is not in place.” From providers of “smart grids” to developers of energy management software, Mergers & Acquisitions looks at recently acquired targets. Read the full story: 14 smart energy deals.
Athletes back healthy eating, juice joints, steak houses, wineries and more. If you’ve had a beer and chicken wings while waiting for a flight at the Raleigh-Durham International Airport, or grabbed a smoothie while shopping at the Federal Plaza in Rockville, Maryland, or enjoyed a steak dinner at New York’s Grand Central terminal, you’ve got a sports celebrity athlete to thank. Among those investing are Dale Earnhardt Jr.,LeBron James, Michael Jordanand Greg Norman. View our slideshow: Danica Patrick, LeBron James, Serena Williams invest in food & wine.
Meet Mergers & Acquisitions 11 Rising Stars of Private Equity, including John Kos, GTCR; Ethan Liebermann, TA Associates; Jennifer Roach, Yellow Wood Partners; and Afaf Ibraheem Warren, Siris Capital . The up-and-coming investors are expected to play significant leadership roles in the future. See: Meet Mergers & Acquisitions' 11 Rising Stars of Private Equity.