M&A wrap: Leonard Green, May River, Merck, Sony, Harvest Partners, Clearlake


Leonard Green & Partners, or LGP, has raised two new funds totaling $14.75 billion. The PE firm raised $12 billion for Green Equity Investors VIII and $2.75 billion for its first middle-market fund, Jade Equity Investors. LGP partners have committed a total of $750 million across the two funds. LGP is led by 15 partners with average tenure of over 15 years, including managing partners John Danhakl and Jonathan Sokoloff along with senior partners John Baumer and Jonathan Seiffer. "We are sincerely grateful to our longtime investors for their continued support and are pleased to welcome our new investors into the LGP community," says LGP partner Erika Spitzer. "Our investor base represents a diverse group of institutions and their constituents globally, with limited partners in GEI VIII and Jade spanning over 20 countries." LGP has invested in over 90 companies since it was founded in 1989. The firm focuses on the consumer, business services, healthcare and industrials sectors. Some of LGP's recent investments include: clincial trial services company WCG; patient survey provider Press Ganey; and custom windows treatment company the Shade Store. Gibson, Dunn & Crutcher LLP advised LGP on the fundraise.

Mergers & Acquisitions editor-in-chief Mary Kathleen Flynn is conducting fireside chats today with Lance Barton, head of corporate development for dating site developer Match Group, and Lawrence Lee, a partner with law firm Baker McKenzie, at CB Insights' The Collective, an event featuring 30-plus live interviews, at New World Stages in New York.

Note: Due to event coverage and special projects, this week our M&A wrap column will run only on Tues., Dec. 10 and Thurs. Dec.12. Look for our announcement of the 2020 Most Influential Women in Mid-Market M&A coming up later this month.

MORE FUNDRAISING NEWS
Private equity firm May River Capital has closed its second fundraise at $300 million, which focuses on the lower middle market. May River was founded in 2012 and has since formed seven investment platforms and 10 add-ons. M2O Private Fund Advisors and Winston & Strawn provided legal advice.

Asset manager GCM Grosvenor has raised its second fund at $983 million, Multi-Asset Class Fund II. The fund will pursue alternative investments across private equity, hedge funds, debt, infrastructure and real estate.

DEAL NEWS
Merck (NYSE: MRK) is buying ArQule Inc. (Nasdaq: ARQL) for $2.7 billion. ArQule develops biopharmaceutical products that are designed to treat cancer. BofA Securities and Covington & Burling are advising Merck. Centerview Partners and Skadden, Arps, Slate, Meagher & Flom LLP are advising ArQule.

Sony Pictures Television has acquired Silvergate Media from Shamrock Capital for $195 million. Silvergate focuses on developing, producing and licensing children’s animation. Alvarium and Foot Anstey advised Silvergate. Latham & Watkins advised Sony.

Dragoneer Investment Group, Neuberger Berman, Insight Partners and Temasek have invested $120 million in Apax Partners-backed Duck Creek Technologies, a software provider to the insurance sector. J.P. Morgan (NYSE: JPM) advised Duck Creek.

Harvest Partners has bought Lazer Spot from Greenbriar Equity Group. Lazer Spot offers spotting services of full and empty trailers across manufacturing faciltities and distribution centers. Harris Williams and Kirkland & Ellis advised the sellers. Ropes & Gray represented Harvest.

Sterling Partners' Education Opportunity Fund has become Avathon Capital, which focuses on the education and workforce management sectors. Avathon invests up to $50 million in equity in deals, also said it has doubled its assets to $404 million since the firm launched in 2015.

Blue Point Capital Partners has acquired Mattco Forge, a manufacturer of metal products for the aerospace and defense sector. Lazard advised Mattco.

Clearlake Capital-backed Gravity has purchased On Point Oilfield Holdings, a commercial water disposal company in the Midland Basin.

Genstar Capital and Oak Hill Capital-backed Mercer Global Advisors has acquired Republic Wealth Advisors, a wealth management firm in Houston.

MAI Capital Management has bought financial planning firm Rodman Capital Management.

Harvest Partners and HGCC-backed Integrity Marketing Group are giving all 750 employees ownership stakes in Integrity along with a $50 million payout bonus.

PEOPLE MOVES
OMERS Ventures, the venture capital wing of the Canadian pension plan, has hired former Uber Technologies Inc. executive Jambu Palaniappan to become a managing partner in its London office. Palaniappan spent nearly six years at Uber, most recently leading the expansion of Uber Eats in Europe, the Middle East and Africa. Read the full story by Bloomberg News: Uber Eats veteran joins Omers venture capital team in Europe.

FEATURED CONTENT
The holiday shopping season is well under way, the biggest period of the year for the retail industry. Mergers & Acquisitions is covering many M&A trends in the sector. This week we're featuring the fourth installment of a weekly series on the 7 technologies retailers are investing in: Retail Tech M&A #1: Nike, McDonald's, PayPal, add customization, IoT. Retail Tech M&A #2: Why Walmart and other retailers are buying artificial intelligence startups. Retail Tech M&A #3: Amazon leads race to build fulfillment centers. Retail Tech M&A #4: Do robots fill orders faster? Retail Tech M&A #5: Voice recognition gives retailers more ways to communicate. Analytics give retailers a better understanding of consumer behavior and habits. Mobile payment processing provides consumers with on-the-go convenience. Check back every week for a new installment. Check out, Retail Tech M&A: 7 Technologies Driving Change.

At Mergers & Acquisitions, we're covering the philanthropic and volunteer initiatives underway in the private equity industry. Last year, we published The Big Give, an in-depth look at how private equity firms are contributing. Efforts have continued to flourish, fueled by younger Millennials seeking to build a better future and by mature partners considering the legacy they will leave behind. Read our full coverage: Private equity gives back: Vista's Robert F. Smith, Clearlake's José E. Feliciano, Riverside employees.

Albertsons, Kroger Co. (NYSE: KR), Stop & Shop and Walmart (NYSE: WMT) are building automated mini-warehouses and "dark stores" to make deliveries and prepare pickup orders. Mini-warehouses are usually attached to existing stores, and in most cases, "dark stores" are completely separate. Both formats are closed off to customers, and are mostly automated. They use the assistance of robots for speed, save on labor, and get orders out faster. Kroger bought a five percent stake in robotics firm Ocado. Read our full coverage: Smart supermarkets become popular, as Kroger, Walmart add them.

It’s a milestone year for the Blackstone Group Inc. (NYSE: BX), which transitioned from a publicly traded partnership to a corporation on July 1. The New York firm announced the final close of its latest global real estate fund recently. With $20.5 billion of total capital commitments, Blackstone Real Estate Partners IX is the largest real estate fund ever raised. Mergers & Acquisitions spoke with Stephen A. Schwarzman, the firm’s co-founder, chairman and CEO. Read the full story: "Complete control" is the beauty of private equity, says Blackstone's Stephen A. Schwarzman.

The private equity model has held up very well over the decades, continuing to outperform the public markets, even as economic cycles come and go. But the rate of growth has slowed, leading PE firms to seek adjacent areas of business to expand. As PE firms face increased pressure to produce higher returns on their investments, many of them are turning to a familiar area of business: lending. Adams Street Partners, Balance Point Capital, Carlyle and VSS are all actively engaged in lending. Read the full story: Private equity firms are becoming lenders. Here’s why.

Prokanga is a unique recruiting firm that offers full-time and flexible recruiting services. Prokanga is managed by co-founders Jamie Cheney and Lesley Finer (pictured). Mergers & Acquisitions spoke with Finer, who has more than 10 years of recruiting for the finance industry and leads the finance practice at Prokanga. For more, see Why financial services pros need flexibility.

Looking for a glimpse of what’s to come in the private equity industry? Meet Mergers & Acquisitions' 2019 Rising Stars of Private Equity. As the PE industry undergoes a generational shift, and many firm founders retire, it’s well worth getting to know these emerging leaders, including Branford's Austin Collier, Sterling Partners' Shawn Domanic and Summit Partners' Sophia Popova. For profiles and video interviews, see Meet Mergers & Acquisitions' 2019 Rising Stars of Private Equity. For Q&As, see 10 Rising Stars of Private Equity tell their tales.

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 Influential Women in Mid-Market M&A. For more on the timeline and nomination process for each, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.

EVENTS
CB Insights hosts The Collective, featuring 30-plus fireside chats, at New World Stages Dec. 10-11. Mergers & Acquisitions editor-in-chief Mary Kathleen Flynn is slated to conduct interviews with Lance Barton, head of corporate development for dating site developer Match Group, and Lawrence Lee, a partner with law firm Baker McKenzie.

The Annual AM&AA Winter Conference is taking place in Scottsdale, Arizon fron Jan. 8-10.

Deal Wave is being hosted by ACG Orange Country at the Ritz-Carlton-Laguna Niguel in Dana Point, California on Jan. 9.

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