M&A wrap: JD.com, Intel, Tivity Health, Nutrisystem, GI Partners, TA Associates
JD.com, China's largest retailer, and Intel have launched a joint lab that will explore retail applications for the Internet of Things (IoT). The Digitized Retail Joint Lab will develop next-generation vending machines, media and advertising solutions, and technologies to be used in the stores of the future, based on Intel architecture. The new lab marks the extension of the existing partnership between Intel and China’s largest retailer. The companies are jointly developing algorithms that analyze customer traffic and in-store purchasing habits to help store owners provide a more personalized and convenient experience to their customers. “As China’s most influential retailer and a leader in data-driven offline retail innovation, JD is an important partner for us to continue to develop a wide range of use cases for our latest technology developments,” said Wei Chen, vice president of Intel and general manager of Intel IOTG China. In June, JD announced a $550 million investment from Google, owned by Alphabet Inc. (Nasdaq: GOOGL).
In this busy shopping season, retailers are increasingly turning to tech M&A to help them compete with online purveyors, especially Amazon.com Inc. (Nasdaq: AMZN). The ongoing challenges in the sector continue to force some retailers to close, including the June liquidation of Toys R Us, backed by Bain Capital and KKR & Co. Inc. (NYSE: KKR). Technology is driving many of the transactions. Best Buy Co. (NYSE: BBY) recently agreed to spend $800 million to buy GreatCall, a provider of emergency response services for seniors, from Chicago private equity firm GTCR. Meanwhile, GreatCall announced a partnership on-demand transportation provider Lyft to make it easier for seniors to get car service. Also at play in retail M&A is the acknowledgment that consumers are choosing retailers that match their values. For example, Canadian retail giant Empire Company Ltd. (TSE: EMP.A) recently agreed to buy fast-growing farm-to-table grocer Farm Boy for $800 million from Boston private equity firm Berkshire Partners LLC. For more on the transactions in the sector, see: 5 trends driving retail M&A.
Tivity Health Inc. (Nasdaq: TVTY), a provider of fitness and health improvement programs, is buying weight management company Nutrisystem Inc. (Nasdaq: NTRI) for $1.3 billion. "Many of the most common chronic conditions afflicting Americans today are associated with weight management, nutrition and physical fitness, and addressing both calories in and calories out is an important part of alleviating those conditions," Tivity Health CEO Donato Tramuto said in a statement. " Today, Tivity Health manages calories out with our SilverSneakers, Prime Fitness and Flip50 programs; and Nutrisystem manages calories in with its weight loss solutions. We believe combining our two companies will create entirely new value propositions for our health plans, fitness partners, members and consumers.” Credit Suisse acted as exclusive financial advisor to Tivity Health and Bass, Berry & Sims PLC served as legal counsel. Evercore acted as exclusive financial advisor to Nutrisystem and Davis Polk & Wardwell LLP served as legal counsel.
Private equity firms GI Partners and TA Associates have agreed to acquire the stake held in Netsmart Technologies Inc. by Allscripts Healthcare Solutions Inc. (NASDAQ: MDRX). The transaction represents an additional investment for GI Partners over its initial stake acquired in April 2016, and results in majority ownership of Netsmart by GI Partners. The deal is expected to further grow Netsmart as a provider of human services and post-acute technology in healthcare. J.P. Morgan Securities LLC and Evercore acted as financial advisors to Allscripts, and Sidley Austin provided legal counsel. Paul Hastings provided legal counsel to GI Partners. Kirkland & Ellis provided legal counsel to TA.
Dealmaking in November continued apace, with Glanbia's acquisition of Slim-Fast, Grubhub's deal for Tapingo and DSW's purchase of Camuto are among the transactions that closed. The mid-term elections were also top of mind. For more on the month, see Glanbia, DSW and Grubhub closed notable deals in November.
For the latest in deal news, see Weekly wrap: Nexstar, Tribune Media, Thoma Bravo, TPG
For our weekly look at private equity firms seeking LPs, see PE fundraising scorecard: Aberdeen, Abry, Apollo, Caryle, KKR
Private equity firms are giving back - organizing groceries at food pantries, mentoring students in schools, running races for cancer cures and pitching in at animal shelters. In time for the holidays, Mergers & Acquisitions highlights the philanthropic and volunteering initiatives of 5 PE firms: the Carlyle Group LP (Nasdaq: CG), Frontier Capital, Huron Capital, the Riverside Co. and Star Mountain Capital. At Carlyle, charity starts at the top, with CEO David Rubenstein's signing of The Giving Pledge, a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to philanthropy. Community involvement is more important than ever to today’s work force. Millennials, defined as people born between 1981 and 1996 by the Pew Research Center, are “for sustainability, diversity, inclusion and giving back to the community,” says Carlyle managing director Christopher Ullman. “We are finding this more and more. Yes, we are here to make money, secure retirement for pensioners, but the firm wants to support people’s efforts to make the world a better place.” Frontier Capital supports several causes, including The Miracle League, a baseball organization for people who are mentally and physically challenged. “There’s more to life than work and material things, and our people understand that,” says Frontier managing partner Andrew Lindner. At Detroit-based Huron Capital, the firm’s philanthropic efforts are focused on local groups. “We want to leave our footprint in this community where we live and work while being as helpful as possible,” says partner Gretchen Perkins. “The charitable activities we do as a group, the ability for each employee to influence where Huron’s donations go, and the ability to perform community service during work hours, or receive matching funds for an employee’s personal non-profit passion, all contribute to a portion of an employee’s sense of purpose and contributing to the greater good.” Read the full story, The Big Give.
We asked dealmakers at ACG Philadelphia's M&A East to share their thoughts on Giving Back. Check out our video interview with Baker Tilly Capital's Judit Nagy-Eichelber: Volunteer work brings teams together. Also watch our conversation with Reed Smith's Jonathan Moyer: For millennial dealmakers, giving back is part of who they are.
The Minneosta Vikings face the Seattle Seahawks Monday night, following the Chicago Bears' defeat of the Los Angeles Rams and the Dallas Cowboys' victory over the Philadelphia Eagles in NFL Week 14. Off the field, many players build companies. Off the field, many football players invest in companies. New England Patriots quarterback Tom Brady recently teamed with former Giants defensive end Michael Strahan, who is the co-host of ABC’s Good Morning America, to launch a sports media startup called Religion of Sports Media, which has raised $3 million in venture capital funding from CourtsideVC and Advancit Capital. Muhsin Muhammad, who played wide receiver for the Carolina Panthersand the Chicago Bears, is a managing director of private equity firm Axum Capital Partners. Steve Young, former San Francisco 49ers quarterback, is a co-founder of private equity firm HGGC. View our slideshow, NFL stars Tom Brady, Michael Strahan, Steve Young go PE.
ACG New York Women of Leadership Summit brings together women in the middle-market dealmaking community for a day focused on networking and knowledge sharing on Jan. 17 at the Intercontinental Barclay Hotel. Alexa Von Tobel, chief innovation officer of Northwestern Mutual, keynotes.
Exponent Women kicks off the new year with an evening of networking on Jan. 24 at The Campbell, at New York's Grand Central Terminal. Jazz Age financier John W. Campbellconverted the space to his private office and reception hall in 1923, and it has recently been restored by design firm Ingrao Inc.
ACG Boston, ACG Connecticut, ACG New Jersey, ACG New York & ACG Philadelphia host ACG Northeast Dealmaking at the Mountain at Stowe Mountain Resort in Stowe, Vermont Jan. 27-29. The event provides a chance for middle-market M&A professionals from across the northeast to come together for two days of close knit networking, shared conversations and valuable time spent to deepen your relationships within the deal community.