M&A wrap: Merck, Amgen, Silver Lake, GIC, Ancestry.com, Vista
Merck & Co. (NYSE: MRK) is among the active buyers snatching up cancer drug developers. The company is buying Tilos Therapeutics, a biopharmaceutical company that focuses on developing therapeutics for potential cancer treatments, fibrosis and autoimmune diseases, for up to $773 million. “At Merck we continue to enhance our robust pipeline through active execution of our business development strategy,” says Dean Li, senior vice president, discovery and translational medicine, Merck Research Laboratories. Research and development is expensive for pharmaceutical developers and often produces unpredictable results. Instead of spending a lot of time and money on internal research for cancer treatments with no guarantees of approval, pharmaceutical companies are making acquisitions to gain access to therapeutics that are already in development, while replacing expired patents. Amgen (Nasdaq: AMGN) is also making deals in the cancer space. The company acquired Copenhagen-based biopharma company Nuevolution for 1.61 billion Swedish krona ($167 million). Nuevolution has a patent-protected drug research platform to identify small-molecule drug candidates to be taken as pills to potentially treat cancer. Read the full story: Strategic buyers snatch up cancer drug developers.
“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 employees 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.
The owners of Ancestry.com Inc., the DNA analysis and family tree company, are turning to a well-tested private equity play for taking cash out of a company: topping up on debt. An investor group led by Singapore’s sovereign wealth fund GIC and private equity firm Silver Lake Management LLC is looking to pull out more than $900 million from the company through a special dividend mostly funded by new borrowings. The dividend would be one of the largest funded by the issuance of junk debt this year. Read the full story by Bloomberg News: Silver Lake, GIC, extract $900 million from Ancestry.com.
Star Insurance Holdings LLC, which is owned by GoldenTree Asset Management, is buying insurance firm Syncora Guarantee Inc. from Syncora Holdings Ltd. for $392.5 million. Advisors to Goldentree include: Sidley Austin, Sheppard, Mullin, Richter & Hampton LLP and Goldin Associates. Advisors to Syncora include: Moelis & Co. (NYSE: MC) and Deveboise & Plimpton.
J.F. Lehman & Co. has acquired Lone Star Disposal L.P., Delta Waste Services L.P. and Tanner Road Facility L.P., a provider of construction and demolition, along with environmental services. Advisors to Lone Star include: Stifel and Hunton Andrews Kurth LLP. The advisor to J.F. Lehman is Jones Day. Financing was provided Monroe Capital.
Vista Equity-backed Quick Base has acquired cloud-based workflow automation software company Cloudpipes.
Accenture (NYSE: ACN) is buying Analytics8, an Australian big data and analytics firm.
Rick Taketa has joined the strategic advisory board at private equity firm Genstar Capital. Taketa is the founder of family office Taketa Capital.
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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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 seller’s 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.
Alex Rodriguez is best known as the New York Yankees star who hit 696 home runs over the course of his 22-year baseball career, but today he’s making a name for himself as an investor as the founder and CEO of A-Rod Corp. One recent example: While serving as a guest judge on CNBC’s Shark Tank, Rodriguez backed Ice Shaker, an insulated bottle maker founded by former National Football League fullback Chris Gronkowski. Rodriguez talked about his life off the field as a savvy investor since his 20’s as the keynote speaker at EisnerAmper’s 4th annual Alternative Investment Summit at the The Museum of Modern Art on June 19. Among the topics discussed in a conversation led by Charles Weinstein, CEO of EisnerAmper: Rodriguez’ childhood as the son of a single mom; his investment thesis, which shares much with other middle-market investors; how he’s helping singer/dancer/actress Jennifer Lopez (to whom he became engaged in March) transition her business initiatives from licensing her brands to owning them; and how one day he just might buy a baseball team. Read the full story: A-Rod talks Ice Shaker, NRG eSports, J. Lo & maybe buying a baseball team.
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.