M&A wrap: Highlander, Evans Food, Wind Point, Mill Rock, TA, Apax
Highlander Partners has formed Benestar Brands to acquire Evans Food Group from Wind Point Partners. Evans is a producer of pork rinds. The target owns the Mac's, Turkey Creek, Don Rudy, Cazo de Oro and Domingo's brands. "Pork rinds are one of the fastest growing snack items, bolstered by the emerging interest of consumers to add these products to their diets as a nutritional option," according to Highlander. The firm adds that consumers find that pork rinds "are a snack that is rich in protein, gluten-free and contains no carbohydrates, which appeals to a variety of consumers, particularly millennials." Highlander CEO Jeff Hull says: "We have developed a team to focus in this area and to identify outstanding opportunities to grow our presence in the food sector." Benestar is being led by former Snyder's-Lance CEO Carl E. Lee. Jr. Advisors to Evans include: William Blair and White & Case. Financing is being provided by: Antares and Norwest Mezzanine Partners.
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 (pictured)
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.
Mill Rock Capital Management, an affiliate of Stellex Capital Management, has invested in Venture Metals. In connection with the investment, Venture has acquired metal recycling services company Versatile Processing Group. Advisors to Mill Rock include: Houlihan Lokey (NYSE: HLI), Credit Suisse Securities, Octant Partners and Milbank LLP. Advisors to Venture include: Deloitte Corporate Finance LLC and Locke Lord LLP. Advisors to Versatile Processing include: KeyBanc Capital Markets and Hunton Andrews Kurth LLP.
Apax Partners is buying a majority stake in Adco Group, a provider of portable toilet and sanitation equipment rental services. Advisors to Adco include: Citigroup, KWM Europe Rechtsanwaltsgesellschaft mbH and Ernst & Young. Advisors to Apax include: Houlihan Lokey (NYSE: HLI) and Kirkland & Ellis.
Aurelius Equity Opportunities SE is buying fleet management operator BT Fleet Solutions from BT Group SE. The target offers fleet management services to parking garages and mobile technicians. Advisors to Aurelius include: Deloitte, Mayer Brown and KPMG. Advisors to BT include: Lazard and Bryan Cave Leighton Paisner.
KKR & Co. (NYSE: KKR) is buying a majority stake in Heidelpay Group from AnaCap Financial Partners. Heidelpay offers payment processing services to online and physical retailers across Europe.
Gryphon Investors-backed Shermco Industries has purchased Southwest Energy Systems, a provider of third-party electrical testing and engineering services for commercial electrical systems.
Pamplona Capital Management has completed the acquisition of Loparex from Intermediate Capital Group. Loparex is a manufacturer of release liners for the medical, industrials and graphics sectors.
For more deal news, see Weekly wrap: Pfizer, HGGC, Thoma Bravo.
For more on fundraising, see PE fundraising scorecard: Arsenal, Blackstone, Golden Gate, Wind Point.
While the Federal Reserve is doing what it can to extend the economy’s growth streak, some banks are preparing for the inevitable downturn — including letting loans in riskier segments run off without rushing to replace them. Bank executives used second-quarter conference calls to highlight specific business lines that are raising concerns. Read the full story: Anticipating recession, banks start scrubbing loan books.
Investors are making bets on checkout-free retail, a category that is just as challenging as it is innovative. But it's payment technology's race to the moon, a chance to seize a favorable position in the struggle to save retail. Read the full story: It's not easy to eliminate checkout—but investors want to make it happen.
DIVERSITY IN DEALMAKING
Women hold just 9.4 percent of senior positions at PE firms globally, according to a recent study by HEC Paris. 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. The special report profiles 36 women M&A pros and includes interviews with them.
“There is this idea in sociology: You've got to see it to be it,” said NBC News correspondent Stephanie Rhule about the importance of building communities of women in the financial services sector, where they are woefully underrepresented. Rhule spoke at the second annual Exponent Exchange, hosted by Exponent Women, a group devoted to nurturing the financial services careers of its female members. Read the full story: Exponent Exchange brings together 200 women dealmakers for second annual event.
Gender-diverse PE investment committees outperformed all-male investment committees substantially, finds a recent study by HEC Paris professor Oliver Gottschalg. 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. For more, read Why private equity firms should include more women on deal teams.
A new payment company is attacking the hurdles professional women face when returning to the workforce after time away, a distinct problem borne out of the broader gender gap in financial services. “This is an economic problem, where you have something like a parent who left the workforce and then could not get back in,” said Samantha Ettus, founder and CEO of Park Place Payments. Read the full story: Behind a payment startup's battle to bridge the gender gap.
Dealmaking in August began with a bang, as the London Stock Exchange Group Plc agreed to snap up Refinitiv in a $27 billion blockbuster deal. And 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 the first half of the year, including 3M Co.'s (NYSE: MMM) purchase of MModal's technology business; Apollo Global Management LLC's (NYSE: APO) acquisition of Smart & Final Stores; and KPS Capital Partners' purchase of Brunswick Corp.'s (NYSE: BC) fitness business. For more see, 3M's purchase of MModal's tech business a highlight of H1 dealmaking.
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.
Organizations in industries, ranging from manufacturing to healthcare, are using M&A to add automated technology in their processing systems. Advances in robotic technology are making it possible to complete more complex tasks at higher speeds and with improved control and outcomes. Read the full story: Accelerating automation through M&A.
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.
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.
M&A East is taking place at the Pennsylvania Convention Center in Philadelphia from Oct. 22-23.