M&A wrap: Lovell Minnick, Inside Real Estate, Elanco, Bayer, General Atlantic, Arsenal
Lovell Minnick Partners is buying a majority stake in Inside Real Estate. The targets offers software services to over 200,000 real estate agents and helps them manage home sale processes and commission payments. "As we’ve seen in other areas of financial services, new technologies are transforming the way in which existing business processes are managed in real estate," Lovell Minnick partner John Cochran tells Mergers & Acquisitions. “Today’s real estate technology environment is very fragmented, a dynamic we typically see lead to additional industry consolidation as businesses grow and evolve," adds Lovell Minnick partner Jason Barg. Demand for real estate software is rising, as firms rely on more on technology to assist them in managing their deals and properties. Earlier in 2019, Lovell Minnick bought Attom Data Solutions from Renovo Capital and Rosewood Private Investments. Attom is a provider of real estate and and analytics that offers tax, deed, mortgage information, along with neighborhood demographics. In 2017, Luminate Capital Partners invested in AMTdirect, which provides contract management services for real estate professionals. Lovell Minnick is a business and financial services-focused private equity firm that has raised $3.2 billion since it was founded in 1999. Advisors to Inside Real Estate include: GCA and Parr Brown Gee & Loveless. The advisor to Lovell Minnick is Morgan, Lewis and Bockius.
Elanco Animal Health Inc. clinched the purchase of Bayer AG’s animal-health unit in a deal valued at $7.6 billion, creating one of the biggest stand-alone veterinary-medicine companies in the world. Buying the Bayer division will significantly bulk up its pet business at a time when the agricultural sector has turned more volatile. Read the full story by Bloomberg News: Elanco buys Bayer's animal health unit.
General Atlantic is buying a majority stake in Morphe Holdings, a direct-to-consumer beauty brand company. General Atlantic is investing alongside existing investor Summit Partners. Advisors to Morphe are: Jefferies and Kirkland & Ellis. The advisor to General Atlantic is Paul, Weiss, Rifkind, Wharton & Garrison LLP. Financing is being providing by Jefferies.
Arsenal Capital Partners-backed Polytek has acquired Stone Coat Countertops, a coatings supplier for surfaces. Genesis Capital advised Polytek.
Lightview Capital has acquired Buchanan Technologies. The target offers IT support to businesses. Martinwolf advised Buchanan.
New Water Capital-backed Sea Link International has acquired Hicks Plastics Co., a provider of injection molded automotive lighting parts. MBS Advisors advised Hicks.
Katherine Kost was hired by consulting firm TriVista as a managing director and head of the firm's new IT and operations technology group. Kost was previously with Meggitt Plc.
Looking for a glimpse of what’s to come in the private equity industry? Meet the 10 dealmakers named by Mergers & Acquisitions as the 2019 Rising Stars of Private Equity:
Austin Collier, Branford Castle Partners
Kevin Cunningham, LNC Partners
Shawn Domanic, Sterling Partners
Stephen Jeschke, GTCR
Danielle Lalli, Huron Capital
Jason Mironov, TA Associates
James Oh, Transom Capital Group
Sophia Popova, Summit Partners
Pavan Tripathi, Bregal Sagemount
Christine Wang, Francisco Partners
The Rising Stars share a common set of core values. They are passionate about building companies. They are naturally curious and interested in changing things for the better. They enjoy working with portfolio company managers, investment bankers and other deal team members. They appreciate the responsibility and autonomy their firms have given them. They are grateful for the leaders who have helped shape their careers, and they are generous with their own time when it comes to nurturing the next generation. As the PE industry goes through a generational shift and many firm founders retire, it's well worth getting to know these emerging leaders. They represent the future of private equity. 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.
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“We know that different people from different walks of life make us a better firm,” said Adam Miller, director of global talent management at the Riverside Co., which employs more than 200 people across four continents, including two female co-fund managers and a female chief operating officer. “We’re creating more opportunities for broader demographics.” Indeed, just about every private equity firm you talk to these days seems intent on becoming attractive to diverse candidates—whether it’s by hiring a chief diversity officer and loosening its dress code (KKR); giving employees flexible hours to spend more time with children (Riverside); offering up to 12 weeks of paid maternity leave and 16 weeks off altogether (ParkerGale); hosting weekly wine-and-cheese gatherings in the summer (Kinzie Capital); or providing on-site professional development and training (Riverside and ParkerGale). Check out: 5 hiring trends in private equity.
BC Partners has joined the growing group of private equity firms selling a minority stake to another PE firm to fuel expansion plans. Earlier in August, the firm, which is headquartered in London with additional offices in New York, Paris and Hamburg, announced it had sold an interest in the firm to New York’s Blackstone Alternative Asset Management for undisclosed terms. PE firms increasingly are selling minority stakes to fund expansion plans. For more see, Why private equity firms sell stakes to other firms.
Dealmaking in August began with a bang, as the London Stock Exchange Group Plc agreed to snap up Refinitiv in a $27 billion blockbuster deal. And M&A was hopping in July, with observers predicting the third quarter will be an active one. Meanwhile, here is a table of middle-market deals that closed in the first half of the year, including 3M Co.'s (NYSE: MMM) purchase of MModal's technology business; Apollo Global Management LLC's (NYSE: APO) acquisition of Smart & Final Stores; and KPS Capital Partners' purchase of Brunswick Corp.'s (NYSE: BC) fitness business. For more see, 3M's purchase of MModal's tech business a highlight of H1 dealmaking.
Activity and urgency characterize the current dealmaking environment, say investment bankers and other M&A advisors interviewed by Mergers & Acquisitions. After a record-breaking 2018, forecasts for 2019 remain bullish. Advisors point to a lot of cash that must be deployed by strategic buyers and private equity firms alike; a healthy U.S. economy; and low interest rates. Competition for high-quality targets has never been more intense, especially for technology providers, they report, which means sellers are commanding high prices. It all adds up to a sellers' market. A mood of urgency prevails, as dealmakers seek to close deals quickly, while conditions remain favorable. The advisors interviewed for this story say they don’t see signs of a recession this year; however they are closely monitoring bellwethers, including corporate earnings, wage pressure, global supply chains and slowdowns abroad. They are recommending that clients be prepared for an economic slowdown in the next two years. Specialization is the name of the game, and investment bankers advise clients to seek targets with business-model stability, limited cyclical exposure and a recurring revenue business model. Technology, business services, healthcare, consumer and manufacturing are among the most promising sectors. Read the story: 8 M&A advisors urge closing deals now, while economy stays strong.
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.
The Association of Asian American Investment Managers (AAAIM) is holding its annual conference from Sept. 4-5 at Convene at 730 Third Avenue in New York.
The Great Lakes ACG Capital Connection is being held at the Westin Book Cadillac Detroit Hotel in Detroit from Sept. 4-6.
ACG Boston and ACG Connecticut are hosting the 5th Annual ACG New England Fall Conference at Gurney's Newport Resort & Marina in Newport, Rhode Island from Sept. 17-18.
Exponent Women is hosting a fall rooftop networking session at RSM in New York on Oct. 7.
M&A East is taking place at the Pennsylvania Convention Center in Philadelphia from Oct. 22-23.
Third Annual Women in Alternative Investments Career Forum is taking place at the New York Hilton on Nov. 8.