M&A wrap: KKR, Bay Club, Exponent, Sallie Krawcheck, Ellevest, Rising Stars
KKR & Co. (NYSE: KKR) is acquiring country and health club operator Bay Club from York Capital Management along with minority investors JMA Ventures and Roxborough Group. San Francisco-based Bay Club, founded in 1977, offers high-end amenities such as golf and tennis, and private corporate events. The company has more than 50,000 members and operates seven facilities throughout San Diego, San Francisco, San Jose and Los Angeles. "In partnering with KKR, we are excited to build even further on what we’ve accomplished thus far and bring our unique offering to even more communities across the country," says Bay Club CEO Matthew Stevens. Morgan Stanley (NYSE: MS), North Point Advisors, Skadden, Arps, Slate, Meagher & Flom and Brownstein Hyatt Farber Schreck LLP are advising Bay Club. Simpson Thacher & Bartlett is representing KKR.
Exponent, a new group of women dealmakers, brought together 200 women from private equity funds, investment banks, entrepreneurs and advisors for the Exponent Exchange, featuring Sallie Krawcheck as the keynote speaker. Previously the CEO of Wall Streetbanks, including Merrill Lynch Wealth Management and Citi Private Bank, Krawcheck serves as the CEO of Ellevest, an online investing platform for women. Mergers & Acquisitions participated in the event as an in-kind sponsor, and editor-in-chief Mary Kathleen Flynn moderated Spotlight Panel, From Startups to Showtime: Investment Case Studies. Check out our slideshow, Exponent drew 200 women dealmakers to event featuring Sallie Krawcheck.
Mergers & Acquisitions has announced the Rising Stars of Private Equity. These 11 up-and-coming investors are expected to play significant leadership roles 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.
Cybersecurity company Imperva Inc. (Nasdaq: IMPV) is buying Prevoty for $140 million. Prevoty is a provider of security-as-a-service technology for web applications, and serves the finance, medial and retail sectors. “Prevoty complements current Imperva application and data security offerings," says Imperva CEO Chris Hylen. "When combined with our on-premises and cloud products, it will help businesses better protect themselves from attacks, prevent breaches and monitor security across their digital business."
Pamlico Capital is investing in Personify Inc. a technology provider for non-profit organizations. Personify's software helps organizations manage their finances and also provides data to help them attract new donors and members.
Trinity Hunt Partners has acquired Improving, which offers technology training and consulting services for businesses.
For more deal announcements, see The weekly wrap: Grubhub, Krispy Kreme, LaSalle Capital.
For more on PE fundraising, see PE fundraising scorecard: Argonaut and Luminate Capital.
The newly enacted tax act presents asset buyers, both large and small, with a new opportunity to increase post-transaction cash flow via tax savings. This opportunity results from the very generous expansion of an old rule with no prior significant relevance to asset acquisitions: bonus depreciation. Read the full guest article by Frank Vari of FJV Tax: Tax reform: how buyers and sellers can benefit from expanded bonus depreciation.
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.