M&A wrap: Newell, Rawlings, Coca-Cola, Costa, Hubbell
Over the last five years, consumer enthusiasm for outdoor activities has increased dramatically, resulting in an outdoor products market that reached $887 billion in 2017, according to the Outdoor Industry Association. Shifting lifestyle preferences which favor recreational activities along with elevated consumer awareness of the physical and mental benefits of athletic activity have driven category growth. A prosperous economic climate and growing desire among consumers to follow active and healthy lifestyles may lead to M&A activity and premium transaction multiples in the outdoor products space. The outdoor products M&A market has been dominated by hyper-acquisitive strategic buyers motivated to expand category offerings, fill product gaps and bolster e-commerce capabilities. Strategic buyers have an abundance of cash, in conjunction with attractive financing options, and are under increased pressure to generate topline growth, both organically and through acquisitions. In addition to the growth within certain categories, several large strategics in the segment have divested assets to rebalance their portfolios and focus capital allocation on higher-growth subsegments within the outdoor products space. For example, Newell Brands Inc. (NYSE: NWL) is selling the Rawlings sports equipment brand. Read the full story: Why outdoor products M&A will rise.
The energy industry is teeming with M&A activity, as companies seek to improve operations. Hubbell and Ingersoll Rand are among the strategic buyers. Private equity firms acquiring include AE Industrial Partners, Clayton, Dubilier & Rice and Genstar Capital. Companies in the energy industry are focused on improving operational efficiencies and analytical capabilities. The issues are urgent for oil and gas companies, because depressed prices mean profits are hard to come by, says Caroline Blitzer Phillips, who advises clients on energy deals as a partner at law firm Vinson & Elkins. They are also essential for renewable energy, which “has been quite expensive in some cases, because the infrastructure is not in place.” From providers of “smart grids” to developers of energy management software, Mergers & Acquisitions looks at recently acquired targets. Read the full story: 14 smart energy deals.
Coca-Cola Co. (NYSE: KO) is making an audacious move into coffee and retail outlets with the 3.9 billion-pound ($5.1 billion) purchase of U.K. chain Costa, its biggest acquisition in eight years that pushes the soda pioneer into a fiercely competitive java market. The transaction gives Coca-Cola instant heft in a business from which it was all but absent, with 3,800 stores in 32 countries and a foothold in China. The Costa deal opens a new business line for a company synonymous with fizzy, sugary beverages like Coca-Cola, Sprite, or Fanta, underscoring the pressure to find new areas of growth as consumer tastes change. Read the full story: Coke makes bet on coffee market with Costa purchase.
Financial services company Markel Corp. (NYSE: MKL) is buying Nephila Holdings Ltd. Nephila offers a broad range of investment products focusing on instruments such as insurance-linked securities, catastrophe bonds, insurance swaps, and weather derivatives. Skadden, Arps, Slate, Meagher & Flom LLP is advising Markel. Willkie Farr & Gallagher LLP is advising Nephila.
Golfzon Newdin is acquiring Leadbetter Golf Academies, a golf instruction institute founded by professional golf coach David Leadbetter. Leadbetter Golf Academies consists of a network of approximately 37 academies across the world, each with a team of instructors trained by Leadbetter. Paul Hastings is advising Golfzon.
PPC Partners-backed sightseeing cruise company Entertainment Cruises has purchased Mariposa Cruises. The target offers cruises, sightseeing and private charters mostly across Lake Ontario.
For more deal announcements, see The weekly wrap: Allstate, Stryker, Yellow Wood.
For more on PE fundraising, see PE fundraising scorecard: Lee Equity and Vista Equity.
Mergers & Acquisitions has announced 11 Rising Stars of Private Equity, including John Kos, GTCR; Ethan Liebermann, TA Associates; Jennifer Roach, Yellow Wood Partners; and Afaf Ibraheem Warren, Siris Capital . The up-and-coming investors are expected to play significant leadership roles in the future. See: Meet Mergers & Acquisitions' 11 Rising Stars of Private Equity.
PepsiCo’s announced $3.2 billion acquisition of SodaStream is the latest in a wave of deal activity in the packaged food sector. This robust M&A environment should continue over the next 12 to 18 months as companies look to become more agile and tap into consumer trends like “better for you” foods and snacking, while also looking to improve capabilities such as digital marketing. Read the full story: PepsiCo's SodaStream deal augurs more food & beverage M&A.
As Indra Nooyi ends her 12-year run in the top job at PepsiCo Inc. (Nasdaq: PEP), the number of women CEOs in the S&P 500 drops to 24. But in the middle market, a growing movement is nurturing women-led companies.For example, Lorine Pendleton, a member of Pipeline Angels, focuses on inclusion investing, backing companies led by diverse entrepreneurs. Read the full story: Inclusion investing nurtures companies led by women and minorities.
Exponent, a new group of women dealmakers, brought together 200 women from private equity funds, investment banks, startups and M&A advisory firms for the Exponent Exchange, featuring Sallie Krawcheck as the keynote speaker. Previously the CEO of Wall Street banks, 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 as an in-kind sponsor, and editor-in-chief Mary Kathleen Flynn moderated a panel. Check out our slideshow, Exponent drew 200 women dealmakers to event featuring Sallie Krawcheck.
While some of the firms that were instrumental in launching the middle market back in the 1980s and 1990s have long since been shuttered, their legacy lives on. They proved to be excellent training grounds for many successful dealmakers. Heller Financial certainly belongs in this category, and Mergers & Acquisitions featured its alumni a few years ago. Another firm with a far reach is Holleb & Coff, a Chicago law firm that closed in 2000, after a nearly 50-year run. Founded by Marshall Holleb and Morris Coff in 1951, the firm advised prestigious clients, such as American National Bank, Hollinger International Inc.and LaSalle Bank. Revenue topped $40 million in 1997. In its heyday, Holleb & Coff employed 130-plus attorneys; it was the law firm to work for in the Midwest. Drawn to the supportive culture, new associates and seasoned partners alike enjoyed working at the venerated firm. Many of the lawyers who worked at Holleb & Coff back in the day are making a significant impact on M&A today, including: John Corvino, general counsel to the Chicago White Sox; · Brian Kerwin, chair of Duane Morris’ global corporate practice; Theodore (Ted) Koenig, the founder and CEO of Monroe Capital; Kenneth Serota, president of Hu-Friedy Manufacturing Co., and Michelle Warner, general counsel, USG Corp. (NYSE: US). Read the full story: Holleb & Coff alumni: Where are they now?