M&A wrap: P.F. Chang's, Paulson, TriArtisan, Centerbridge, KPMG, William Blair, KKR
Mergers & Acquisitions profiles the top 28 investment banks of 2018, with KPMG, Houlihan Lokey, Goldman Sachs (NYSE: GS), William Blair and Lincoln International ranking as the five most active in M&A. The list is based on volume of completed deals, with PitchBook as the data provider. It was a good year for dealmaking, with activity in the U.S. middle market exceeding $400 billion, the first year to achieve the milestone.
Paulson & Co. and TriArtisan Capital Advisors LLC have bought restaurant chain P.F. Chang’s China Bistro Inc. from Centerbridge Partners. The latter put P.F. Chang's on the auction block in 2018. P.F. Chang's owns and franchises more than 300 Asian restaurants globally. Its menu features items such as wok-fired filet mignon and miso glazed salmon. Centerbridge bought P.F. Chang's in 2012 for $1.1 billion, and separated the main brand and Pei Wei Asian Diner into two businesses. "We are fortunate to have a partnership with Paulson and TriArtisan which will allow us to implement a collaborative growth strategy," says P.F. Chang's CEO Jim Bell. "Paulson and TriArtisan bring financial strength and expertise that will allow us to grow our dine-in and off-premises channels both domestically and internationally.” Restaurant chains and PE firms find it beneficial to partner with each other. Restaurants get help funding growth, while generating cash for PE firms. The latter has also provided investment for large-scale brands. In 2018, Fat Brands Inc. (Nasdaq: FAT) acquired Yalla Mediterranean, a restaurant chain that offers authentic, Mediterranean cuisine. Advisors to P.F. Chang's include: Bank of America, Barclays and Weil, Gotshal & Manges LLP. Advisors to the buyers include: Credit Suisse, Ropes & Gray LLP and Kleinberg, Kaplan, Wolff & Cohen P.C. For more on restaurant M&A trends, read: What's attracting hungry buyers to restaurants? Here are 7 trends.
KKR & Co. (NYSE: KKR) has made a minority investment in cybersecurity company KnowBe4. Ten Eleven Ventures also participated in the round. The deal values the company at more than $800 million, or approximately three times what it was worth when it raised $30 million at a valuation of $283 million in 2017.
Liberty Hall Capital Partners has purchased Onboard Systems Inc. The target offers external cargo handling equipment for civil and military helicopters. Advisors to Onboard include: Houlihan Lokey (NYSE: HLI) and Perkins Coie. Gibson Dunn & Crutcher advised Liberty Capital. Ally Finance provided financing.
TA Associates has made an investment in ARI Network Services Inc., a software provider that offers lead-generation, e-commerce, digital marketing, electronic catalog and dealer management services to o dealers, equipment manufacturers and distributors. True Wind Capital will remian the largest shareholder in the target.
Altus Capital Partners has acquired Thermal Solutions Manufacturing Inc., a manufacturer and distributor of heat exchange and thermal management products, from Resilience Capital Partners.
For more deal announcements, see The weekly wrap: Marlin Equity, Rhone Capital, Thoma Bravo.
For ongoing coverage of private equity firms that are raising new funds, see our weekly columns: PE fundraising scorecard: Amulet Capital, Bowmark Investment, Trilantic Capital.
Technology M&A is thriving, and private equity firms are hot on the trail of innovations that will drive sustainable value to customers and make companies more efficient, more effective and less expensive to run. Among the developments appealing to PE investors are: artificial intelligence, data management, data virtualization, digital marketing, healthcare IT, industrial automation, the Internet of Things, machine-to-machine learning, payment processing and Software-as-a-Service. To gain more insights into what kinds of tech deals will dominate the field in 2019, Mergers & Acquisitions reached out to 10 private equity firms that are active investors in technology: Francisco Partners, Genstar, Great Hill, HGGC, Insight, LLR, Riverside, Silver Lake, TA and Vista.
In Mergers & Acquisitions' annual look at strategic buyers, we see significant deals aimed at enhancing the customer relationship, including Amazon.com Inc.'s (AMZN) purchase of PillPack, Nike Inc.'s (NYSE: NKE) acquisitions ofInvertex Ltd. and Zodiac Inc. and Target Corp.s' (NYSE: TGT) acquisition of Shipt. Technology plays a key role in many transactions. But while technology is enabling developments, it’s not an end unto itself for many corporations. Instead, strategic buyers are using innovations as a means to achieve goals. Based on analyzing hundreds of recent deals, Mergers & Acquisitions has identified seven goals corporate dealmakers hope to accomplish through M&A transactions today: Integrate data with software; improve the customer experience and relationship; expand and improve distribution; process payments more efficiently; leverage tech trends, like autonomous vehicles; make manufacturing processes more efficient; and achieve better outcomes and efficiencies in healthcare. “Strategics have been really active,” says John Neuner, managing director, Harris Williams. “They are aggressive in pursuing the assets they want, as long as it fits within their strategy. Scale is critical to them, and they have to meet consumer demands by adding new capabilities.”
Independent sponsors must rely on others for the capital to close deals. Having a working relationship with a PE firm provides the independent sponsor with an ally and leverage while negotiating the best deal possible. Read the full guest article by Boyne Capital Partners' Derek McDowell: How to structure a winning PE-independent sponsor partnership.
"There's a lot of capital chasing deals, both from the private equity community and strategic buyers across sectors," says Delance Street Partners' David Allebach, in this video shot at ACG Philadelphia's M&A East conference. Watch the video: Why buyers have to pay more for quality targets.
Related: M&A Insights: Inclusion investing, a video interview with Lorine Pendleton.
Mergers & Acquisitions has named 36 leaders the 2019 Most Influential Women in Mid-Market M&A, including Kainos Capital's Sarah Bradley, Kayne Anderson Capital Advisors' Nishita Cummings and Pelham S2K Managers' Venita Fields. All 36 are outstanding dealmakers both inside and outside of their firms. This year, we asked the featured dealmakers to tell their own stories through Q&As, including their advice for women.
Mergers & Acquisitions has closed the nomination process for the 2018 M&A Mid-Market Awards. We look forward to announcing the winners in March. The Awards are one of three special reports we produce each year to celebrate deals, dealmakers and dealmaking firms. The other two are The Rising Stars of Private Equity and The Most Influential Women in Mid-Market M&A.
ACG Minnesota and Corvus North are hosting AIM: A Women's Leadership Conference at the Minneapolis Hyatt on March 7. The conference is designed to support and encourage female leaders to grow and achieve success throughout their career journeys.
ACG Philadelphia is hosting its 2nd annual Industry Tour focused on SaaS & Tech-Enabled Services on March 12 at the Union League of Philadelphia. Last year's event brought together 200 PE investors, investment bankers, operating companies and industry advisors from around the country.
The Women's Private Equity Summit will be held at the Monarch Beach Resort in Dana Point, California, March 13-15. The Summit will bring together more than 550 female professionals in private equity and venture capital.
ACG New York's Women of Leadership is hosting a golf event and reception on March 21 at Konnect Golf in Manhattan. The event brings together female dealmakers from private equity firms, investment banks and lenders.