M&A wrap: Penn National, Greektown Casino, Dan Gilbert, Best Buy, GreatCall, Lyft, SVB, Leerink
Casino operator Penn National Gaming Inc. (Nasdaq: Penn) is buying the operating assets of Greektown Casino-Hotel located in Detroit from Dan Gilbert's Jack Entertainment for $300 million. Separately, VICI Properties is acquiring the land and real estate assets of Greektown for about $700 million. Gilbert is the founder of lending and financial services company Quicken Loans Inc. He is also the majority owner of the NBA's Cleveland Cavaliers. Jack Entertainment is a gaming and hospitality company that owns properties in Cincinnati, Cleveland and Detroit under the Jack brand, along with the Horseshoe Baltimore and Kentucky Turfway Park. “Our purchase of Greektown Casino-Hotel five and a half years ago, soon after its bankruptcy, allowed us to work with the great team at the property to create a winning culture and a vibrant business,” says Gilbert. “The sale to Penn National and VICI Properties will allow that strong trajectory to continue and provide additional capital to continue our strategic investments in our Detroit real estate and business initiatives.” Penn National owns 40 casinos under the Ameristar, Boomtown Casino and Hollywood Casino brands. Paul, Weiss, Rifkind, Wharton & Harrison LLP is representing Jack. Kramer Levin Naftalis & Frankel is representing VICI. In another gaming deal, industry veterans Ron Winchell and Marc Falcone are buying horse racing and betting track Kentucky Downs. Falcone is the former CFO of Red Rock Resorts, and he previously focused on the gaming and hospitality sectors at Goldman Sachs & Co. (NYSE: GS) and Deutsche Bank Securities. Winchell overees his family's horse racing and breeding operations in Kentucky.
As the holiday shopping season gets underway, the pressure on retailers is more intense than ever, with Sears’ recent bankruptcy filing serving as a cautionary tale. It's been a year since Amazon bought Whole Foods, a game-changer in the retail industry. Technology is driving many of the transactions in the retail industry. Best Buy Co. (NYSE: BBY) recently agreed to spend $800 million to buy GreatCall, a provider of emergency response services for seniors, from Chicago private equity firm GTCR. Meanwhile, GreatCall announced a partnership with on-demand transportation provider Lyft to make it easier for seniors to get car service. “Many of the challenges that retailers are currently facing are due more to a lack of innovation and investment in technology, and that they are not able to compete with Amazon,” said Alex Monahan, a consumer products senior analyst at tax and consulting firm RSM US LLP. “Investors want to see that retailers are adjusting to consumer’s changing preferences and striving to provide seamless multi-channel experiences, while also investing in technology to address the tight labor markets.” Amazon, Walmart, Ikea, Bed, Bath & Beyond and Farm Boy are among the retailers turning to M&A. For full coverage, see 5 trends driving retail M&A deals.
SVB Financial Group (Nasdaq: SIVB) is acquiring investment bank Leerink Partners for $280 million. The business will be rebranded as SVB Leerink. SVB said that the acquisition will complement its commercial banking and lending products by adding a full range of investment banking services focused on healthcare and life science companies. Keefe, Bruyette & Woods and Sullivan & Cromwell are advising SVB. Sandler O'Neill and Skadden, Arps, Slate, Meagher & Flom are advising Leerink. Read the full story: SVB Financial to buy Boston investment bank.
Sabre Corp. (Nasdaq: SABR) is buying airline technology company Farelogix for $360 million. The target provides software that allows airlines to create personalized offers for customers. Paul, Weiss, Rifkind, Wharton & Garrison LLP is advising Farelogix. Axinn Veltrop & Harkrider and Hogan Lovells US LLP are advising Sabre.
Wind Point Partners-backed Vee Park has acquired Cosmetic Essence Innovations, a manufacturer of bed, bath hair and skin care products. Lazard Middle Market, WInston & Strawn and Kirkland Ellis advised Vee Pak and Wind Point. Houlihan Lokey Inc. (NYSE: HLI) and Morrison Cohen advised Cosmetic Essence.
AEA Investors has acquired Numotion, a maker of mobile technology products for the healthcare sector, from Audax Private Equity and LLR Partners. Harris Williams advised Numotion.
WindRose Health Investors has invested in Traditions Behavorial Health, a provider of permanent outsourced physician psychiatric services. McDermott Will & Emery advised WindRose and Foley & Lardner advised the target. Hancock Whitney Bank provided financing.
Angeles Equity Partners and Clearlake Capital-backed American Construction Source has purchased building products distributor Arrow Building Center.
PPC Partners-backed LBP Manufacturing has bought Dominion Packaging’s quick-service restaurant business, a producer of folding cartons.
The private equity industry will focus on educating lawmakers newly elected in the mid-terms. “As an industry, we will work to educate the nearly 100 new members of Congress about private equity’s positive impact in their communities and their constituents’ lives,” Pam Hendrickson, the chief operating officer of middle-market private equity firm the Riverside Co., tells Mergers & Acquisitions in a Q&A. “We will be talking with them about jobs, investment, and retirement security. We need to make the personal case to each of the new members as well as top leadership in both the House and the Senate. As an example, the incoming chair of the Ways and Means committee Richie Neal is from the State of Massachusetts which had a 15.4 percent annualized return from its PE portfolio over 10 years.” Hendrickson is currently a member of the board of the American Investment Council and a member of the advisory board of the Kenan Institute for Ethics at Duke University. In the past, she has testified before Congress on behalf of the private equity industry. Read the full interview: Post-election priority for private equity: educating 100 new members of Congress. For more on how the mid-term election results are playing out in the middle market, including how former PE professionals Mitt Romney, Bruce Rauner and J.B. Pritzker fared Tuesday night, see Dealmaker’s post-election guide: Mitt Romney, J.B. Pritzker, Dodd-Frank, Pam Hendrickson, Gretchen Perkins.
Across the spectrum of middle-market mergers and acquisitions, there’s a great big middle ground that specialist investment banking firms handle very well. The investment banking business model works when the market itself is working. In this context, a working market means that there are multiple sellers of relatively similar “goods” — professionally run middle-market companies with continuing management teams being traded by professional investors — as well as multiple viable buyers interested in competing with each other to complete a deal. Read the full guest article written by Oaklyn Consulting's Frank Williamson: How mid-market companies can manage crossroads situations.
U.S. middle-market dealmaking in the first three quarters of 2018 surpassed the same period in 2017, according to PitchBook. If the pace continues in the fourth quarter, middle-market deal value may surpass $400 billion for the first time ever. One important question: Will the momentum continue now that the power has shifted in Congress? Mergers & Acquisitions asked Matthew O’Loughlin, partner and co-chair of the mergers and acquisitions practice with Manatt, Phelps & Phillips LLP, to share his thoughts on how the mid-term elections will affect M&A. Read the full story: It's been a good year for M&A. Will momentum continue post election?
Mergers & Acquisitions asked Dan Shea, a managing director at BDO Capital Advisors, to share his thoughts on the election results. Read the full story: Infrastructure investment is an area of potential agreement in Washington.
Mergers & Acquisitions asked Michael Gruber, managing partner at Salveo Capital, to share his thoughts on how the mid-term elections will affect M&A and the cannabis sector. Read the full story: Cannabis investments will likely benefit from new House leadership, Jeff Sessions' departure.'
Mergers & Acquisitions identifies 15 cities as fertile communities for dealmaking. We look at metropolitan areas from Austin (where Michael Dell launched a PC business out of his dorm room back in the day and where thousands gather every year for SXSW) to St. Louis (home of private equity firm Thompson Street Capital Partners). Be sure to check out Milwaukee (with private equity firm Robert W. Baird & Co. and investment bank Clearly Gull) and Minneapolis (home of strategic buyers 3M, Best Buy, General Mills, Hormel and Target). And don’t forget Boston, Chicago, New York, San Franciscoand Los Angeles and more. See our list, Dealmaker's guide to 15 cities where M&A thrives.
The New York Giants defeated the San Francisco 49ers 27-23 on Monday night to wrap up NFL Week 10. Off the field, football stars team to build companies. New England Patriots quarterback Tom Brady recently teamed with former Giants defensive end Michael Strahan, who is the co-host of ABC’s Good Morning America, to launch a sports media startup called Religion of Sports Media, which has raised $3 million in venture capital funding from CourtsideVCand Advancit Capital. Many NFL players invest in companies. Muhsin Muhammad, who played wide receiver for the Carolina Panthers and the Chicago Bears, is a managing director of private equity firm Axum Capital Partners. Steve Young, former San Francisco 49ers quarterback, is a co-founder of private equity firm HGGC. Mergers & Acquisitions takes a look at star players who invest in companies through private equity, venture capital and other investment vehicles.
ACG Florida Capital Connection, held Nov. 12-14, at the Vinoy Renaissance St. Petersburg Resort & Golf Club, puts “sun and fun” into dealmaking for the middle market, bringing together hundreds of dealmakers. The keynote speaker is Forbes Media CEO Steve Forbes, and the featured speaker for the Women’s Forum is Valerie Crites Fowler, who served as a diplomat in the U.S. Foreign Service for over 29 years, reaching the rank of Minister Counselor in the Senior Foreign Service.
Middle Market Week, hosted by ACG New York and held Nov. 26-30 at various locations throughout New York, brings together leading global middle-market dealmaking professionals to develop and enhance their dealmaking activities, strengthen their long-term relationships, and provide numerous opportunities for networking all week long. Mark your calendar for the Private Equity Annual Wine Tasting Gala on Nov. 28 at Gotham Hall. The building was constructed in the 1920s as the headquarters of the Greenwich Savings Bank. The gala brings together the leading middle market private equity firms for an evening of fine wines and networking.