M&A wrap: Odyssey, Citizens Financial, TA, Platinum, Google, Roche, Manufacturing M&A


Middle-market private equity firm Odyssey Investment Partners has closed its sixth fund at $3.25 billion. The PE firm focuses on the aerospace and defense, automated equipment, energy, insurance, industrials and packaging sectors, targeting businesses that have up to $100 million in Ebitda. "Our successful fundraising effort reflects our investors’ considerable confidence in our team, which will continue to be focused on building value on their behalf in the coming years," says Odyssey CEO Brian Kwait. PE fundraising is expected to remain healthy in 2020. About three-quarters of PE managers raising fund in 2020 expect it to be larger than the prior money pool, according to an EY survey. In 2019, the average fund size increased by 32 percent to $846 million, according to EY's PE Pulse report. Other recent fundraises include: GoldPoint Parners, the private equity affiliate of New York Life Investment Management LLC, closing its fourth fund-of-funds at $678 million; Incline Equity Partners raising its fifth fund at $1.165 billion; Platinum Equity closing its fifth fund at $10 billion; and Vestar Capital Partners raising its seventh fund at $1.1 billion. Debevoise & Plimpton LLP advised Odyssey.

Manufacturing in the U.S. has contracted to its lowest level in more than a decade. The Institute for Supply Management said that its manufacturing index fell in December 2019 to 47.2. That’s its lowest level since June 2009, when it hit 46.3. This, in addition to a tight labor market, China’s retaliatory tariffs and the upcoming presidential election, has made manufacturing a tricky sector to do business in these days. Still, despite some of the headwinds facing the manufacturing industry, the M&A deal market remains active. Interest rates are low, and companies as well as investors have cash to invest. Additional factors come into play, including the need for consolidation and globalization in the manufacturing industry. Robots are playing a role as well, and manufacturing automation has become appealing. “The tight labor market and increasing wages have led us to pursue a number of different initiatives at our companies to counteract the resulting pressures created,” says Brad Roberts, a partner with the Riverside Co. “Where economical, we are investing in increased automation to enable us to meet growing sales volume amidst this difficult hiring environment.” Read our full coverage: 5 trends driving manufacturing M&A.

DEAL NEWS
Citizens Financial Group Inc. (NYSE: CFG) is buying Trinity Capital. Trinity focuses on providing financial advice to middle-market businesses on debt restructuring, leveraged and management buyouts. The firm has closed more than 500 transactions since 2000. “Trinity adds deep expertise in the restaurant, retail, food and beverage, and agricultural sectors while strengthening our overall coverage nationally," says Ted Swimmer, head of corporate finance and capital markets for Citizens Commercial Banking.

TA Associates has bought Auction Technology Group, an online platform for auctions, from ECI Partners. TA also bought Proxibid, an online marketplace for connecting buyers and sellers across, from Primus Capital. Squire Patton Boggs and GCA Altium advised ATG and ECI. Travers Smith and Alvarez & Marsal advised TA. Wilson Sonsini and Vaquero Capital advised Proxibid.

Platinum equity has acquired Biscuit International, a European manufacturer of private label sweet biscuits. Rothschild and Latham & Watkins advised Platinum.

Roche has completed its acquisition of biotechnology company Promedior in a deal valued up to $1.4 billion. Promedior develops treatments for fibrosis.

Domino’s Pizza Group plc divested a majority stake of its Norwegian business to a group of minority shareholders. Fried, Frank, Harris, Shriver & Jacobson advised Domino's.

Mondee Inc. has bought Cosmopolitan Travel Service. Union Square Advisors advised Mondee.

For more deal announcements, see Weekly wrap: Apax, Salesforce, Sun Capital.

For more on fundraising, see PE fundraising scorecard: Carlyle, Intrepid, Searchlight.

DEAL TRENDS
M&A deals in the lower to middle market of the business-to-business services sector consistently reflect seller-friendly terms, according to a new study of such transactions between 2016-19 conducted by Seward & Kissel LLP. The average deal size was $115 million, while two-thirds of transactions were valued below $100 million. Less than 20 percent of the transactions reached $250 million or more.

The U.S. Federal Trade Commission just ordered major technology companies to fork over details on waves of small acquisitions made during the last decade. A more sizable deal is also seen as a target for the regulator: Google’s (Nasdaq: GOOG) $1.1 billion purchase of mapping app Waze. The FTC quickly approved the 2013 transaction, but antitrust experts say the regulator will take a second look because it combined two popular digital mapping services under the same corporate roof, eliminated a fast-growing Google rival and solidified the internet giant’s grip on valuable data. Read the full story by Bloomberg News: Google’s Waze deal Is a likely target in FTC antitrust sweep.

Elon Musk dreams big dreams. Tesla Inc. (Nasdaq: TSLA) taps Wall Street for funds to turn them into reality. Banks pocket millions in fees. And rather than punish the company for diluting its shareholders, the market applauds. The virtuous circle has enabled Tesla to raise about $14 billion over the last decade, supporting the electric-car maker through countless ups and downs. News of the latest offering -- which priced at $767 a share, according to a regulatory filing -- boosted Tesla’s market capitalization to almost $146 billion, behind only Toyota Motor Corp. among the world’s most valuable auto manufacturers. Read the full story by Bloomberg: Tesla capital raise keeps $14 Billion virtuous circle rolling.

FEATURED CONTENT
Artificial intelligence in healthcare saw about $4 billion in funding across 367 deals in 2019, according to data and research firm CB Insights. Amazon.com Inc. (Nasdaq; AMZN) is no exception. The tech conglomerate is using its recent deals for Health Navigator and PillPack to launch new software services in healthcare. Health Navigator works with companies like Microsoft Corp. (Nasdaq: MSFT) in offering services such as remote diagnoses, and with triage to help patients figure out whether to stay at home, see a doctor or go straight to the emergency room. Read our full coverage: How Amazon is using M&A to revolutionize healthcare.

Pushed by a groundbreaking California law mandating it, more companies are putting women on their public corporate boards. The law faces pressure in court and may not stand, but its rippling effect has already started to increase the visibility and awareness of the important benefits of board diversity. Investors are taking notice and trying to get ahead of the curve. According to a study published by MSCI in March 2018, having three or more women on a company’s board of directors translates to a 1.2 percent median productivity above competitors. Read the full guest article by Venable's Belinda Martinez Vega: Why businesses are adding women to their boards.

If there’s anything M&A professionals dislike, it’s uncertainty. And heading into 2020, there’s more than enough uncertainty to go around, including questions about the economy, international trade, impeachment, domestic politics and more. The funny thing is, the lack of clarity may actually make the first half of the year a great time for M&A, as dealmakers push to close transactions before the looming uncertainty of Election Day and its outcome. We conducted interviews with 8 investment bankers and other M&A advisors. Some said the first half of the year will be robust, while others said the uncertainty may have a negative impact throughout 2020. Read the full story, What’s ahead for M&A in 2020? We ask 8 advisors.

Mergers & Acquisitions has named the 2020 Most Influential Women in Mid-Market M&A. This marks the fifth year we have produced the list, which recognizes female leaders with significant influence inside their companies and in the wider dealmaking world. It’s been gratifying to watch the project evolve over the years – and become more influential itself. This year, we received more nominations than ever before. As a result, we expanded the number honored to 42 in 2020, up from 36 in 2019. Many dealmakers are new to our list, including Rockwood Equity Partners' Kate Faust, William Blair's Shay Brokemond and Avante Capital Partners' Ivelisse Simon. Read our full coverage of all the champions of change on our list, including Q&As with each individual.

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 Influenital Women in Mid-Market M&A. For an overview of what we're looking for in each project, including timelines, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.

EVENTS
ACG New York is hosting the 12th annual healthcare conference and bourbon tasting at the Metropolitan Club in New York on Feb. 27.

ACG Raleigh Durham's 18th annual capital conference is being from March 31-April 1 at the Raleigh Marriott Crabtree Hotel in Raleigh, North Carolina.

InterGrowth 2020 is taking place at the Aria Resort & Casino in Las Vegas from April 20-22.

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