M&A wrap: JAB, Krispy Kreme, Insomnia Cookies, Rising Stars of Private Equity
Krispy Kreme Doughnut Corp., a subsidiary of JAB Holding Co. (owner of beauty giant Coty and beverage producers Keurig Dr. Pepper and Peet's Coffee & Tea), is buying a majority stake in Insomnia Cookies, to expand delivery services. Insomnia was founded in 2003 by Seth Berkowitz in his dorm room at the University of Pennsylvania. The company specializes in delivering fresh, warm cookies to the customer's door until 3:00 a.m. Popular flavors include Sugar, Triple Chocolate Chunk and S'mores. With offices in New York and Philadelphia, Insomnia operates 135 shops and bakeries. "While our companies will continue to operate independently, these two great brands can learn a great deal from each other as we each continue to expand and grow," said Mike Tatersfield, the CEO of Krispy Kreme, which JAB bought for $1.35 billion in 2016. Headquartered in Winston-Salem, North Carolina, Krispy Kreme boasts 1,400 stores in 32 countries. Headquartered in Luxembourg, JAB is a privately-held group focused on long-term investments in companies with premium brands, attractive growth and strong margin dynamics, according to the company website. Au Bon Pain, Panera Bread and Pret A Manger are among JAB's holdings. The firm is owned by Wolfgang Reimann (whose real-time net worth is currently $4.1 billion) and three of his siblings, according to Forbes. They are the grandchildren of chemist Ludwig Reimann, who, in 1828, joined with Johann Adam Benckiser and his namesake chemical company. Today, JAB holds a minority stake in consumer products maker Reckitt Benckiser. JAB's investments are overseen by CEO Olivier Goudet (who also serves as the chairman Anheuser-Busch InBev), chairman Bart Becht and senior partner Peter Harf. Skadden Arps is representing Krispy Kreme. Consumer demand for convenience is driving M&A activity among food delivery companies.
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.
Thoma Bravo-backed Riskonnect is buying Marsh ClearSight LLC, a provider of risk, safety, and claims software. "Today’s organizations face intensified and increasing risks from internal and external sources and need a visionary partner to help them tackle this challenge strategically and cost-effectively,” says Riskonnect CEO Jim Wetekamp. Riskonnect is a risk management technology provider for small and large businesses that Thoma Bravo bought in 2017. Kirkland & Ellis is representing Thoma Bravo and Riskonnect on the Marsh ClearSight Deal.
Bossa Nova Robotics has purchased HawXeye, which uses artificial intelligence technology to recognize products instead of faces and eyes. Bossa Nova, backed by Innovation Works, makes robots that scan shelves for data on out-of-stock, misplaced and mislabeled products and check for incorrect pricing. Read our Q&A: Robotics developers are ripe for investment, says Innovation Works CEO Rich Lunak.
Esko, a division of packaging design software provider Danaher Co. has acquired Blue Software from Diversis Capital. Blue Software is a label and artwork management software company.
Family office McNally Capital has invested in Federal Data Systems, which offers critical infrastructure, counterintelligence and threat reduction services to the Department of Defense and major corporations. Profile Capital Management and Pine Crest Capital co-invested alongside McNally. Ropes & Gray and Venable represented McNally.
NewSpring Mezzanine has invested in Radius Global Market Research. The target focuses on quantitative market research for over 150 companies.
Robert Fleishman has joined Kirkland & Ellis' Washington, D.C. office as a partner. Most recently with Morrison & Foerster, Fleishman advises on energy regulatory and compliance aspects of transactions.
Edward Poletti has joined private equity fund administrator Gen II Fund Services as a senior advisor. Poletti was most recently with Credit Suisse, where helped build the firm's global alternative fund operations business.
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 enjoyed a dazzling week 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 Central terminal, 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: Serena Williams, heading to Wimbledon finals, and other athletes bet on restaurants, wineries, juice bars.
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.