M&A wrap: Houlihan Lokey, MVP Capital, CEC, Chuck E. Cheese, Ally, Great Hill, Clearlake, KeyBanc
Houlihan Lokey Inc. (NYSE:HLI) is buying MVP Capital, an investment bank that focuses on the technology, media and telecom sector. “The transformation in the telecom and Internet infrastructure industries, driven by the advent of 5G, cloud computing, and video streaming, will create meaningful and complex opportunities for our clients," says MVP managing partner Jason Hill. "These opportunities will require both deep sector expertise and a broad range of solutions." MVP has advised on more than 300 M&A and private placement transactions in the TMT sector since it was founded in 1987. Hill will be joining Houlihan as co-head of the firm's TMT group. Rob Louv and Roy Kabla will also join Houlihan. The acquisition will add 25 financial professionals to Houlihan's TMT group, including MVP’s seven managing directors. Houlihan has been expanding its services, sector expertise and geographic reach in recent years through acquisitions. In 2019, Houlihan agreed to buy Freeman & Co., a New York-based independent firm advising financial institution clients on mergers and acquisitions and capital raising. Houlihan also made its fifth European acquisition in four years, acquiring Madrid-based Fidentiis Capital to grow its European corporate finance business. In 2018, the bank acquired BearTooth Advisors, a firm that provides strategic advisory and placement agency services to alternative investment managers. In that same year, the firm formed HL Finance LLC to arrange senior secured leveraged loans for financial sponsor-backed, privately held and public corporate entities. Keefe, Bruyette & Woods and Mayer Brown LLP are advising MVP. Proskauer Rose LLP is advising Houlihan.
Under normal circumstances, M&A demands a robust set of tools and services to be successful. In today’s environment in which the stakes have been raised by the coronavirus crisis, professional help from service providers is more important than ever. Private equity firms and their portfolio companies want to know what actions they can or should take, and what their peers are considering, to make the best decisions possible in response to the Covid-19 pandemic. Through talking with many different affected parties, service providers have streams of data and information that can help investors make informed decisions and minimize negative economic impacts on their investments. Mergers & Acquisitions examines offerings from EHE Health, Norgay Partners, Cepres, Valuation Research Corp. and Axial. “The stakes are high today,” says Greg Mansur, chief client officer at EHE Health, which provides a playbook on getting companies back to work safely. “We want to be part of the solution for our clients. We want to help them through this and help America get back to work.” Read our full coverage: 5 service providers guide dealmakers through the next phase of the pandemic.
CEC Entertainment Inc., the parent of Chuck E. Cheese and Peter Piper Pizza, filed for bankruptcy protection after the coronavirus pandemic shuttered its locations and kept families at home. CEC, acquired by Apollo Global Management Inc. in a 2014 leveraged buyout, has more than 600 Chuck E. Cheese outlets and over 120 Peter Piper Pizza venues. Entertainment and leisure have been among industries hardest hit by state and federal guidelines to stay at home. Read the full story by Bloomberg News: Chuck E. Cheese parent files for bankruptcy due to pandemic.
Ally Financial and CardWorks have agreed to terminate Ally's $2.7 billion deal to buy the lender. The companies said in a press release that they considered “the meaningful impacts of Covid-19 on global markets and the economy” when they made the decision. There will be no termination fees. Read the full story: Ally's deal to acquire CardWorks called off.
Keysight Technologies Inc. (NYSE: KEYS) has acquired digital automation company Eggplant from Carlyle for $330 million. "Businesses must accelerate their digital transformation to remain competitive and relevant, while continuing to support legacy platforms," according Keysight.
Great Hill Partners is buying stock media company Storyblocks. "The creative industry has hit an inflection point, with the recent pandemic only accelerating growth," according to Great Hill. Lightning Partners is advising the target and GCA Advisors is advising Great Hill.
Aquiline Capital Partners-backed Elm Street Technology has acquired real estate technology company IDX Broker. The latter is a provider of provider of real estate search applications. Vaquero Capital advised IDX.
Clearlake Capital Group has acquired a majority stake WhiteStar Asset Management from Pine Brook Capital Partners. The combined assets will have $24 billion under management.
KeyBanc Capital Markets and Clearwater International have formed a strategic alliance to increase their cross-border M&A services across Europe and China. “Partnering with Clearwater is an important next step in broadening KBCM’s M&A platform, providing enhanced access to corporate and private equity firms across Europe and Asia,” says Randy Paine, president of Key Institutional Bank at KeyCorp.
Roebling Capital Partners has launched a new lower-middle-market private equity fund based in Ft. Wright, Kentucky. The fund, led by Keith Carlson, Brian Malthouse and Daniel Magarian, will invest up to $4 million per deal.
Ashutosh Rathore was hired by Raymond James as a managing director where he is focusing on the insurance sector. He was most recently with Guggenheim Securities.
Megan Alexander and Vineet D’Souza were hired by William Blair as directors. They were both previously with Lazard.
Derek Fournier has been promoted from president to CEO at Shamrock Capital-backed DeCurtis Corp.
Adam Stormoen was hired by investment bank Cascadia Capital as a managing director where he is concentrating on the healthcare sector. He was previously with Duff & Phelps.
David King has joined Pritzker Private Capital's healthcare team as an operating partner. He was previously the CEO of LabCorp (NYSE: LH).
Katie Kornel was hired by private equity firm Linden Capital Partners as a partner of investor relations. She was most recently with Credit Suisse.
James Stammer was hired by private equity firm Yellow Wood Partners as an operating partner. He was previously the CEO of PDC Beauty & Wellness Co.
Portfolia Rising America Fund "invests directly in early and growth-stage companies in the U.S. led by people of color and/or LGBTQ founders, or products and services that cater to these markets," says investment partner Lorine Pendleton in a Q&A with Mergers & Acquisitions. "These are founders, ecosystems, products and services historically overlooked by traditional venture capitalists but positioned for significant growth and profitability." The firm is led by five women of color. In addition to Pendleton, the firm's leaders are: Noramay Cadena, co-founder and managing partner of MiLA Capital; Daphne Dufresne, a managing partner of GenNx 360 Capital Partners; Juliana Garaizar, an angel investor; and Karen Kerr, executive managing director at GE Ventures. "We believe that strength lies in differences and seek out entrepreneurs and startups who are using shifting demographics and their own diversity of experience and thought to create innovation that offers outsized opportunities for returns and impact." The fund had its first close earlier in 2020 and has made two investments to date: The first investment is in MoCaFi, a fintech startup founded by Wole Coaxum, a former JPMorgan Chase commercial banking executive and entrepreneur, who is African American. "MoCaFi offers a mobile-first banking platform that brings digital banking products to underbanked or unbanked communities (an 88 million U.S. market), allowing them to build credit and financial mobility," Pendleton explains. The second investment is in a women’s tele-medicine network. For more, read the full interview: Led by 5 women of color, Portfolia Rising America Fund backs mobile banking and women's telemedicine startups.
"As stewards of capital we have an outsized role in determining which businesses to support," says Mina Pacheco Nazemi of Barings Alternative Investments. "As asset allocators, we need to hold ourselves accountable. I can do more. Will you join me?" Dealmakers begin to weigh in, as Gerge Floyd's death sparked two weeks of Black Lives Matter protests against police brutality and racial injustice. Read the story: "Justice doesn’t just happen. It requires action, dedication and accountability," says one private equity investor.
In the challenging times we face now, it’s more important than ever to come together as a community and recognize the people and companies that excel and lead. We invite you to join us in honoring the 2019 winners of Mergers & Acquisitions’ M&A Mid-Market Awards. In contrast with the volatile coronavirus-driven conditions unfolding in 2020, the dealmaking environment of 2019 was remarkably stable. Among the PE firms benefitting from the auspicious fundraising climate was Vista Private Equity, which raised a $16 billion fund – the largest technology-focused PE fund ever raised. Mergers & Acquisitions is honoring Vista founder and CEO Robert F. Smith with our 2019 Dealmaker of the Year award. In addition to leading his firm’s unprecedented fundraising, Smith excelled in philanthropy. When he spoke at the commencement of Morehouse College, he announced he would pay off all the student loans of the HBCU’s 2019 graduates, providing a helping hand in the student debt crisis facing many U.S. families. The financial services sector saw a lot of consolidation in 2019. Piper Jaffray wins our 2019 Deal of the Year for buying Sandler O’Neill to form Piper Sandler, which instantly became a leading investment bank in the financial services sector. And Stifel wins our 2019 Investment Bank of the Year for growing dramatically and making several acquisitions. Read our full awards coverage: Meet the winners of Mergers & Acquisitions’ M&A Mid-Market Awards.
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 Influenital Women in Mid-Market M&A. For an overview of what we're looking for in each project, including timelines, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.
Editor's Note: M&A wrap is a bi-weekly column, published on Mondays and Thursdays