M&A wrap: Nike, Celect, Bonaccord, Wafra, AEI, Genstar, Hackman Capital

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Nike Inc. (NYSE: NKE) has acquired predictive analytics and demand sensing firm Celect. The deal is part of Nike's consumer direct strategy that is aimed at improving its personal customer service. Celect, founded in 2013, offers cloud-based analytics that helps retailers manage their inventory based on local demand predictions. "As demand for our product grows, we must be insight-driven, data optimized and hyper-focused on consumer behavior," says Nike chief operating officer Eric Sprunk. "This is how we serve consumers more personally at scale.” In 2018, Nike acquired two innovative companies in order to help speed up the athletic apparel maker’s digital strategy. Nike bought Zodiac Inc., a consumer data analytics firm based in New York and Philadelphia. Nike also bought Invertex Ltd., a Tel Aviv, Israel-based pioneer in the use of 3D scanning technology to customize shoes. Consumers are more demanding and specific with the products they buy. Retailers of all kinds are under pressure to get a better grasp of shopper behavior, so they can tailor their marketing strategies and inventories to meet evolving consumer needs. In order to do this, companies are investing in technology, including data and analytics providers, snatching targets in those fields through M&A. Nike Inc. (NYSE: NKE) earned Mergers & Acquisitions' 2018 M&A Mid-Market Award for Strategic Buyer of the Year for acquiring Zodiac and Invertex.

DEAL NEWS
Bonaccord Capital Partners, a division of Aberdeen Standard Investments, and Wafra Inc. have acquired a minority stake in aerospace and defense-focused private equity firm AE Industrial Partners. “Our industry focus and proprietary origination networks present us with interesting acquisition opportunities, as evidenced by our completion of 34 acquisitions since 2015," says AEI managing partner David Rowe. "The partnership with Wafra and Bonaccord will assist in funding our growth as a firm.” Advisors to AEI include: Colchester Partners LLC and Kirkland & Ellis. The legal advisor to Bonaccord is Fried, Frank, Harris, Shriver & Jacobson LLP.

Genstar Capital is buying wholesale insurance brokerage firm Worldwide Facilities from Lovell Minnick Partners. Advisors to the sellers include: Morgan Stanley and Waller Helms Advisors. The legal advisor to Lovell Minnick is McGuireWoods LLP. Advisors to Genstar include: Mash, Berry & Co. and Ropes & Gray.

Hackman Capital Partners is buying The MBS Group, a film and TV studio real estate and production services platform, from the Carlyle Group (Nasdaq: CG) for $650 million. MBS owns MBS Media Campus, which operates Manhattan Beach Studios in Manhattan Beach, California. MBS also operates MBS Services, an operator of studio-based production and infrastructure services.

Arcline Investment Management has acquired Pride Engineering, a manufacturer of precision-engineered tooling and equipment, from May River Capital. Lincoln International advised Arcline.

Granite Creek Capital Partners has made a $15 million investment in Morrow Sodali, a provider of strategic advisory and shareholder services to corporate clients.

DEAL TRENDS
Fundraising was strong in the first half of 2019, according to EY's PE Pulse. There was a total of $732 billion funds raised as of June. Buyouts accounted for more than 42 percent of funds raised in the last 6 months. PE assets targeting Asia-Pac have increased by 21 percent over the last 10 years compared to 7 percent for Europe and 7 percent for North America. Complex carve-outs and credit opportunities in Asia are becoming increasingly sought after by PE firms.

Bank consolidation has heated up in recent weeks. Eighteen deals, with a total value of more than $2.4 billion, have been announced since mid-July. Half of the year’s 10 biggest agreements ranked by deal value were announced in June and July. Read the full story: A scorching summer for bank M&A.

Mastercard has spent more than $4 billion on investments so far in 2019 to thread a needle between several must-haves in the digital payments market. The card brand has agreed to buy a majority of Denmark-based Nets' corporate services business for about $3.19 billion, Mastercard's largest acquisition in this or any year. For more, see Why Nets deal is a bargain for Mastercard at $3 billion.

RISING STARS
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.

MORE FEATURED CONTENT
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.

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.

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.

Organizations in industries, ranging from manufacturing to healthcare, are using M&A to add automated technology in their processing systems. Advances in robotic technology are making it possible to complete more complex tasks at higher speeds and with improved control and outcomes. Read the full story: Accelerating automation through M&A.

Excelled. Innovated. Inspired. That’s what the eight winners of Mergers & Acquisitions’ 12th Annual M&A Mid-Market Awards did in 2018. Our awards honor the leading dealmakers and deals that set the standard for transactions in the middle market. In addition to Nike, award winners include: Fortive, TA Associates, the Riverside Co., Harris Williams, Monroe Capital, Goodwin and Luminate Capital Partners' Hollie Haynes. Read our full coverage: Meet the winners of the M&A Mid-Market Awards: Nike, Fortive, TA, Harris Williams.

EVENTS
The Association of Asian American Investment Managers (AAAIM) is holding its annual conference from Sept. 4-5 at Convene 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.

M&A East is taking place at the Pennsylvania Convention Center in Philadelphia from Oct. 22-23.

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