M&A wrap: PepsiCo, SodaStream, Indra Nooyi, TA Associates, Luminate Capital, Hollie Haynes, Fintech

Sparkling water.jpeg
Sparkling water with mint, raspberries and blueberries

PepsiCo Inc. (Nasdaq: PEP) has agreed to buy fizzy-drinks dispenser maker SodaStream International Ltd. (Nasdaq: SODA) for $3.2 billion, sending the company synonymous with sugary sodas into the homes of more health-conscious consumers. In one of her final acts as CEO of PepsiCo, Indra Nooyi is betting on a razors-and-blades kind of business model to reanimate revenue growth, which has been waning due to weak demand for traditional soft drinks, reports Bloomberg News. SodaStream sells machines that turn tap water into sparkling water, using carbonation cylinders that run out after 60 litres. The company also sells the cylinders and other accessories, such as plastic bottles and flavored syrups. Read the full story: Pepsi enters homemade market with SodaStream deal.

Venture capital dealmaking and fundraising activity in the first half of 2018 were up a bit from the previous year, according to Preqin. In terms of deal volume, 2,415 deals worth $43 billon closed in H1, slightly higher levels than in 2017. Software was the most active industry for U.S.-based venture capital investment, and the healthcare sector accounted for the most capital. Fundraising was also successful. In the first half of the year, 152 VC funds secured $18 billion, more than half of the total raised in all of 2017. General Catalyst Partners raised the largest VC fund in the H1. At $1.4 billion, General Catalyst Group IX invests in U.S. technology, software and Internet companies. The fundraising activity is expected to continue. In July, a record 833 U.S.-based venture capital funds targeting $74 billon were in market, a significant increase from 626 funds with an aggregate target of $55 billion at the same time the previous year.

Deal news
Financial Information Technologies, known as Fintech, a provider of invoicing, electronic payment and analytics products and services to the beverage alcohol industry, has received a strategic investment for an undisclosed amount from TA Associates and Luminate Capital Partners, building on an initial 2016 investment by Luminate. Fintech created the first electronic payment solution for regulated beverage alcohol and has expanded its products to offer proprietary analytics tools to help its customers improve their business operations, according to the company. Fintech’s products are used daily by more than 120,000 retail locations and over 3,500 beverage alcohol distributors throughout the U.S. “Fintech has continued to extend its leadership position in the two years since we initially invested in the company,” said Hollie Haynes, the former Silver Lake partner who founded Luminate. Haynes serves on Fintech's board. “The beverage alcohol market has many unmet needs that we believe Fintech is well-positioned to address,” said Clara Jackson, a senior vice president at TA, who joins the Fintech board of directors. The announcement of the deal completion coincides with National Fintech Day on Aug. 20. The day recognizes the ongoing collaboration between financial institutions and technology providers to launch innovative services and products aimed at meeting the shifting demands of consumers, while developing offerings for the next-generation of account holders. Goodwin Procter provided legal counsel to TA Associates, and Kirkland & Ellis provided legal counsel to Luminate, and Holland & Knight provided legal counsel to Fintech.

Tyson Foods Inc. (NYSE: TSN) has confirmed it has agreed to buy protein supplier Keystone Foods from Marfrig Global Foods for $2.16 billion. Keystone distributes chicken, beef, fish and pork to some of the world's largest restaurant chains including McDonald's Corp. (NYSE: MCD). The deal is part of Tyson's M&A strategy to focus on its core proteins business. The company is selling its pizza crust division to Peak Rock Capital. Morgan Stanley and Davis Polk & Wardwell are advising Tyson on the Keystone acquisition.

For more deal announcements, see the Weekly wrap: Best Buy, Peak Rock, Thoma Bravo.

Featured content
Middle-market companies are hiring and promoting, with recent developments coming from AEI, Cowen, Keefe Bruyette & Woods and PJ Solomon. See: People moves: Rajib Sarkar joins Keefe Bruyette & Woods' insurance group as an MD.

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.

Procter & Gamble Co. (NYSE: PG) is focusing on growing its top 25 brands, including Bounty paper towels, Charmin toilet paper, Crest toothpaste, Pampers diapers, Nyquil cough and cold medicine, and Tide laundry detergent, while seeking acquisitions. In April, P&G announced plans to buy Merck KGaA’s consumer-health business for $4.2 billion. The deal includes the Femibion and Neurobion over-the-counter healthcare brands. P&G is also purchasing skincare brand First Aid Beauty. “What you have to have is the brand consumers prefer, because then retailers want to carry it, because it builds the basket,” P&G CEO David Taylor explains. Read the full story: Why P&G is changing its M&A strategy.

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.

See Mergers & Acquisitions' look at 10 PE firms that have succeeded in raising new funds recently despite an overall slowdown in PE fundraising, including the Carlyle Group (Nasdaq: CG), PPC Partners, Soundcore Capital Partners and Sycamore Partners. For the latest on PE fundraising, see PE fundraising scorecard: Ridgemont Equity and Yellow Wood.

Summer reading list: From stories of star athletes Arnold Palmer, Keith Hernandez and Tiger Woods to advice from entrepreneurs Bridgewater AssociatesRay Dalio, KPCB’s John Doerr, Nike’s Phil Knight and Brava Investments’ Nathalie Molina Niño, plus strategies to help business leaders in general, and female dealmakers in particular, the 15 books on Mergers & Acquisitions’ list entertain, instruct and inspire. Check out our listicle: Dealmaker’s guide to summer reading: 15 new books.

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