M&A wrap: Mastercard, Movista, Natural Insight, Houlihan Lokey, Freeman, WeWork, Softbank

mastercard

Mastercard (NYSE: MA) is buying customer loyalty technology company SessionM. Airlines, retailers and restaurants use SessionM's software to create stronger customer relationships. The addition of SessionM will increase Mastercard’s ability to help brands deliver personalized, real-time offers based on data. Businesses are seeking to reinvent their loyalty programs to better serve consumers who have high demands such as personalization, and are using acquisitions to help. “Consumers' expectations about their experiences with brands are changing,” says Francis Hondal, president, loyalty and engagement at Mastercard. “We believe that the future of loyalty needs to be re-imagined to enable seamless digital experiences, and SessionM’s consumer-centric capabilities will help us broaden our value to marketers across sectors in exciting new ways.” In another retail technology-related deal, Movista has acquired competitor Natural Insight in a deal backed by Level Equity. The two companies offer retailers software that provides information such as scheduling, project management, ordering, training and logisitics to help companies improve in-store experiences. “In today’s rapidly evolving retail environment, customer experience is critical," says Movista CEO Stan Zylowski. "Physical stores have to look great and products have to be where expected.”

Houlihan Lokey Inc. (NYSE: HLI) is buying Freeman & Co. to expand its investment banking services to the broker-dealer, asset management and wealth management sectors. Freeman, founded in 1991 by Jim Freeman, focuses on the financial services sector. Some of the firm's recent deals include advising the targets on Peak6's purchase of ETC; Canccord Genuity's acquisition of Petsky Prunier and advised Janney on its acquisition of FIG Partners. As a result of Freeman deal, Gagan Sawhney and Eric Weber will be joining Houlihan as managing directors, while Freeman will stay on as a senior advisor.

MORE DEAL NEWS
WeWork has secured a $9.5 billion rescue package from SoftBank Group Corp., a deal that hands 80 percent of the company to the Japanese conglomerate while capping one of the more dramatic business debacles in recent memory. The transaction marks the end of an era for the troubled co-working giant, which raised money at a $47 billion valuation in January, pulled out of a botched initial public offering in September and is now valued at less than $8 billion in the bailout. Read the full story by Bloomberg News:SoftBank unveils $9.5 Billion WeWork rescue, gets 80 percent stake.

Roku Inc. (Nasdaq: ROKU) is buying advertising technology company Dataxu for $150 million. Dataxu offers marketers automated bidding and self-serve software services to manage ad campaigns programmatically across digital platforms. As viewers continue to migrate to streaming content, services that automate media buying are expected to unlock more advertising opportunities, according to Roku.

LaSalle Capital has acquired Joseph's Frozen Foods from Brynwood Partners. The target produces frozen stuffed pasta and sauces for restaurants and retailers. Piper Jaffray (NYSE: PJC) and Holland & Knight advised Joseph's.

Lee Equity Partners has bought Cosmetic Solutions, an outsourced skincare products maker. The Sage Group advised the target.

Ad Practitioners LLC has acquired the Money brand from Meredith Corp. (NYSE: MDP). Cooley advised Meredith.

Cerberus Capital Management is buying Kellermeyer Bergensons Services, a provider of facility management services, from GI Partners. KBS serves companies in the industrial, logistics, retail and grocery sectors.

Arlington Capital Partners is buying a majority stake in Aegis Technologies. The latter provides engineering and technology services to the national security sector.

Anacapa Partners has invested in I4PRO Informática Ltda., a workflow software provider for the insurance sector in Brazil.

DEAL TRENDS
The growth rate for middle-market companies is declining, according to the 3Q Middle Market Indicator from the National Center for the Middle Market. At 5.8 percent, it fell nearly three points from the Q2 report. The number of middle-market executives who feel positive about overall performance fell to 60 percent from 68 percent from the previous quarter. The survey interviewd more than 1,000 middle-market executives on business performance, growth drivers and economic outlook.

PEOPLE MOVES
John Donaleski has joined law firm Orrick as a partner. Previously with White & Case, Donaleski focuses on M&A in the energy and infrastructure sectors.

Steve Callis was hired by GTCR-backed RevSpring as president of payments where he is leading the company's growth efforts in the payments sector. Callis previously held roles with Elavon, EVO Payments International and Global Payments.

Sandy Feldman has joined law firm Reed Smith as a partner. He was most recently with K&L Gates, and focuses on cross-border M&A.

John Roller was hired by Prostar Capital-backed GTI Statia as CEO, while Karen Vazquez joined as CFO and Jim Calvert as chief commercial offer. GTI operates a storage facility for energy products.

Juan Carlos Raposo has joined FTI Consulting Inc. (NYSE: FCN) where he is leading the firm's new office in Madrid. Raposo was most recently with Arcano.

FEATURED CONTENT
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. Read the full story: Private equity firms are becoming lenders. Here’s why.

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.

Bank M&A has been soaring, creating the perfect backdrop for Piper Jaffray’s announced acquisition of Sandler O’Neill & Partners LP. “There has been a lot of consolidation in the bank space,” Piper Jaffray CEO Chad Abraham told Mergers & Acquisitions. “But there are still 5,000 banks, and we expect the pace of consolidation to continue.” For analysis of the deal, see Counting on bank M&A: Why Piper Jaffray bought Sandler O'Neill.

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
More than 1,300 strategic and financial dealmakers are networking at ACG Philadelphia's M&A East at the Pennsylvania Convention Center on Oct. 23.

ACG Charlotte is hosting Deal Crawl at the Mint Museum in Charlotte, North Carolina, Nov. 6-7.

The Third Annual Women in Alternative Investments Career Forum is taking place at the New York Hilton on Nov. 8.

ACG New York is hosting Middle Market Week in New York from Nov. 11-15. The 17th Annual Private Equity Wine Tasting Gala takes place on Nov. 13 at Gotham Hall.

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