M&A wrap: Nike, McDonald's, Internet of Things, Middle Market Week, KKR, Walgreens, TGI Fridays

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Mergers & Acquisitions has launched a new weekly 7-part series on retail technology M&A. We’re kicking it off with an in-depth look at how the Internet of Things is transforming retail and how the trend is playing out in dealmaking. Nike (NYSE: NKE) is making acquisitions to enhance its customer experiences. Nike bought Zodiac and Invertex Ltd., a pair of innovative digital startups helping the athletic apparel maker get closer to customers. McDonald’s Corp. (NYSE: MCD), the world’s largest restaurant chain, is gobbling up digital startups to improve customer experiences by capitalizing on IoT innovations- a strategy new CEO Chris Kempczinski supports. The company is buying personalization company Dynamic Yield for a reported $300 million in its largest deal in more than 20 years, and will use the software to customize drive-thru menus. Check back every Friday throughout the holiday shopping season for a new installment.

In New York, it’s Middle Market Week. The 17th Annual Private Equity Wine Tasting Gala takes place on Nov. 13 at Gotham Hall. The PE roundtable series is being held on Nov. 14, and the breakfast program takes place on the same date at the Winston & Strawn offices.

DEAL NEWS
KKR & Co. (NYSE: KKR) has formally approached drugstore giant Walgreens Boots Alliance Inc. (Nasdaq: WBA) about a deal to take the company private, in what could be the biggest-ever leveraged buyout, according to Bloomberg News. Walgreens Boots, led by Chief Executive Officer Stefano Pessina, has been reviewing a potential deal with a financial adviser to take the company private amid buyout interest. Read the full by Bloomberg News: KKR makes formal approach to Walgreens Boots on buyout.

Information management provider OpenText (Nasdaq: OTEX) is buying cybersecurity firm Carbonite Inc. (Nasdaq: CARB) for $1.4 billion. Carbonite offers data backup and disaster recovery to people and businesses. OpenText makes software used for searching corporate intranets and managing documents. “Following expressions of interest from multiple parties, the Carbonite Board conducted a thorough and comprehensive process, which included contact with a number of strategic and financial parties, to identify the best way to maximize shareholder value,” says Carbonite CEO Stever Munford. J.P. Morgan Securities LLC (NYSE: JPM) and Skadden, Arps, Slate, Meagher & Flom LLP are advising Carbonite.

Special purpose acquisition company Allegro Merger Corp. (Nasdaq: ALGR) is merging with TriArtisan Capital Advisors LLC-backed casual dining restaurant chain TGI Fridays in a deal valued at $350 million. TGIF's shareholders will receive $30 million in stock and Allegro will assume approximately $350 million in debt. TGIF operates about 840 restaurants. Piper Jaffray (NYSE: PJC), Canto Fitzgerald and Graubard Miller are advising Allegro. Ropes & Gray is representing TGIF.

Fortiv Corp. (NYSE: FTV) has bought Censis Technologies Inc. from the Riverside Co. Censis provides Software-as-a-Service surgical instrument tracking and workflow services to hospitals and surgical centers. Censis and Riverside were advised by Piper Jaffray & Co (NYSE: PJC), Software Equity Group, Jones Day and Deloitte.

Main Post Partners has invested in Sugared + Bronzed, which offers hair removal and sunless tanning services out of 10 locations. The target was advised by Piper Jaffray (NYSE: PJC) and Offit Kurman. Main Post was advised by Morrsion Foerster.

For more on fundraising, see PE fundraising scorecard: Acon, Engaged Capital, Neuberger Berman.

For more deal news see , Weekly wrap: Google, Harvest Partners, Olympus.

FEATURED CONTENT
Esteemed M&A attorney Martin (“Marty”) Lipton was honored at a black-tie event hosted by the Institute of International Education at The Pierre in New York on Oct. 30. Called the “the king of M&A,” the co-founder of New York law firm Wachtell, Lipton, Rosen & Katz, is well known to dealmakers as the architect of the anti-takeover defense strategy known as the “poison pill.” Lipton was awarded the IIE Stephen P. Duggan Award for Mutual Understanding “in recognition of his lifetime of extraordinary achievement and his lasting contribution to international higher education. Read the full story: Martin Lipton, inventor of the “poison pill” anti-takeover defense honored by IIE.

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. Adams Street Partners, Balance Point Capital, Carlyle and VSS are all actively engaged in lending. Read the full story: Private equity firms are becoming lenders. Here’s why.

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
Gridiron Capital is partnering with Housatonic Habitat for Humanity, the local housing nonprofit, to build homes for Veterans and their families.

Exponent Women is hosting a Family Office Event with Owens Group at LX Gallery in New York on Nov. 21. Mergers & Acquisitions editor-in-chief Mary Kathleen Flynn is moderating a panel.

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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