M&A wrap: Houlihan Lokey, HL Finance, HPS, Rising Stars of Private Equity
Houlihan Lokey (NYSE: HLI) has formed HL Finance LLC to arrange senior secured leveraged loans for financial sponsor-backed, privately-held, and public corporate entities. The move expands the capabilities of the New York investment bank's growing capital markets group. “The creation of a syndicated leveraged finance platform leverages our core advisory capabilities and relationships and combines them with the credit underwriting and portfolio management strengths of market-leading asset managers," says Houlihan Lokey CEO Scott Beiser. "Importantly, this initiative is driven by significant client demand and is consistent with our advisory business model.” Houlihan Lokey, through this platform, will participate in both committed and best efforts transactions across a broad range of financings, including leveraged buyouts, acquisitions, dividend recapitalizations, and refinancings, primarily for borrowers with Ebitda and capital needs in excess of $50 million and $250 million, respectively. HPS Investment Partners is HL Finance's initial strategic investor and will provide underwriting commitments of up to $1 billion. HPS is an investment firm that invests in syndicated leveraged loans, secured and mezzanine debt, asset-based leasing and private equity. As of June, HPS manages around $46 billion in assets. Syndicated leveraged finance will operate as part of Houlihan Lokey’s capital markets group, led by global co-heads Chris Dunlop, Anthony Martino, and Gregg Newman. In anticipation of launching the initiative, the group has added senior talent over the past year, including Matthew Lyness and Ed Ribaudo, who were formerly managing directors with GE Antares in New York. As an asset class, private debt has performed consistently well over the last 15 years, attracting a wide range of investors.
Mergers & Acquisitions has announced the Rising Stars of Private Equity. These 11 up-and-coming investors are expected to play significant leadership in the future. Congratulations to:
Daniel Hopkin, Partner, Kainos Capital
John Kos, Principal, GTCR
Erik Latterell, Director, Stone Arch Capital
Ethan Liebermann, Principal, TA Associates
Jaime McKenzie, Director, Monomoy Capital
Jennifer Roach, Vice President, Yellow Wood Partners
Joseph Rondinelli, Principal, Frontenac
David Shainberg, Vice President, Balmoral
Tom Smithburg, Vice President, Shore Capital Partners
Nicholas Stone, Managing Director, Cyprium Partners
Afaf Ibraheem Warren, Senior Associate, Siris Capital
For profiles of the emerging leaders, see Meet Mergers & Acquisitions' 11 Rising Stars of Private Equity.
Middle-market PE firm ICV Partners has raised its fourth fund at $585 million. Founded in 1998, ICV invests across the manufacturing, businesses services, food and beverage and healthcare sectors. The firm typically seeks businesses that have up to $250 million in revenue and $30 million in Ebitda. Some of ICV's portfolio companies include: LeadingResponse, OIA Outpatient Imaging Affiliates and Universal Turbine Parts. Acalyx Advisors served as ICV's placement agent on the fund raise and Willkie Farr & Gallagher LLP provided legal advice.
Alvarez & Marsal Taxand LLC, an affiliate of Alvarez & Marsal has formed a strategic partnership with tax technology provider Tax Technologies Inc. The partnership bolsters A&M Taxand tax data management services it offers to clients. The partnership also furthers the firm's ability to advise companies on managing risk and increasing efficiencies, while administering to their complex international taxation needs.
CoolSys, an operator of HVAC companies, has acquired Energy Squared LLC. The target is an engineering consulting firm that offers mechanical, electrical, plumbing and refrigeration analysis for residential and commercial buildings.
The Riverside Co. has acquired a majority stake in Abracon, a provider of electromechanical timing, synchronization, power, connectivity and radio frequency services, from Evergreen Pacific Partners. Jones Day and KPMG advised the Riverside Co. Antares and Bain Capital provided financing.
TransDigm Group Inc. (NYSE: TDG) has bought Skandia Inc. from Graycliff Partners for $84 million. Skandia supplies seating foam and other interior products for business jets. Houlihan Lokey advised Skandia.
For more deal announcements see The weekly wrap: Asahi Kasei, Genstar, NCI Building, Salesforce.
For more on PE fundraising, see PE Fundraising scorecard: Accel-KKR and Sun Capital.
Michael Gottschalk has joined investment PJ Solomon as a partner and managing director. Most recently with Rothschild, Gottschalk focuses on M&A in the food and beverage, personal care and household products sectors.
Christopher Utz was hired by investment bank Ziegler as a director. Previously with Pinta Capital Partners, Utz concentrates on M&A in the senior housing industry.
Parker Weil has joined Cowen Inc. (Nasdaq: COWN) as vice chairman of investment banking. Weil was most recently the head of industrials and natural resources investment banking at Stifel Financial Group.
High valuations and abundant use of debt continued to mark completed deal activity in the first quarter of 2018, according to GF Data. Two hundred and eight private equity groups and other deal sponsors reported on 52 transactions closed in the quarter. The overall average valuation mark for the quarter was 6.9x valuation multiple, a marked retreat from the torrid 8.0x valuation multiple average in the prior quarter. At first blush, valuations in 2018 seem to have retreated to pre-2017 levels. However, GF Data gravitates to the view that the random fall of completed deals in 4Q 2017 versus 1Q skewed artificially high in the first period and low in the second. Averaged together, the result is a continuation of already unprecedented aggregate valuations attained in the middle quarters of GF Data. Read the full story: Valuations dropped slightly but are still higher than average.
Serena Williams dazzled at Wimbledon. Out of the grand slam game for 16 months as she started a family and suffered post-delivery complications, Williams, seeded 25th, fought her way into the finals. Meghan, Duchess of Sussex and Catherine, Duchess of Cambridge watched from the All England Club's Royal Box, as Williams finished second to Angelique Kerber on July 14. Williams is among many star athletes who have excelled in business as well as in sports. 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 Centralterminal, you’ve got a sports celebrity athlete to thank. Among the athletes investing are Dale Earnhardt Jr.,LeBron James, Michael Jordan and Greg Norman. View our slideshow: Danica Patrick, LeBron James, Serena Williams invest in food & wine.
Summer reading list: From stories of star athletes Arnold Palmer, Keith Hernandez and Tiger Woods to advice from entrepreneurs Bridgewater Associates’ Ray Dalio, KPCB’s John Doerr, Nike’s Phil Knight and Brava Investments’ Nathalie Molina Niño, plus strategies to help business leaders in general, and female dealmakers in particular, the 15 books on Mergers & Acquisitions’ list entertain, instruct and inspire. Check out our listicle: Dealmaker’s guide to summer reading: 15 new books.