M&A wrap: Refinitiv, LSE, Blackstone, BDO, Cheesecake Factory, Huron, FP
Looking for a glimpse of what’s to come in the private equity industry? Meet the 10 dealmakers named by Mergers & Acquisitions as the 2019 Rising Stars of Private Equity:
Austin Collier, Branford Castle Partners
Kevin Cunningham, LNC Partners
Shawn Domanic, Sterling Partners
Stephen Jeschke, GTCR
Danielle Lalli, Huron Capital (pictured)
Jason Mironov, TA Associates
James Oh, Transom Capital Group
Sophia Popova, Summit Partners
Pavan Tripathi, Bregal Sagemount
Christine Wang, Francisco Partners
The Rising Stars share a common set of core values. They are passionate about building companies. They are naturally curious and interested in changing things for the better. They enjoy working with portfolio company managers, investment bankers and other deal team members. They appreciate the responsibility and autonomy their firms have given them. They are grateful for the leaders who have helped shape their careers, and they are generous with their own time when it comes to nurturing the next generation. As the PE industry goes through a generational shift and many firm founders retire, it's well worth getting to know these emerging leaders. They represent the future of private equity. 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.
London Stock Exchange Group Plc has agreed to snap up Refinitiv in a $27 billion blockbuster deal, betting on a future dominated by data as the three-century-old exchange seeks to extend its global reach. The transformational deal promises to create global scale and growth in fast-growing markets such as Asia. It will also make Refinitiv’s owners, including Blackstone Group Inc (NYSE: BX)., some of the biggest LSE shareholders with a combined 37 percent stake. Read the full story by Bloomberg News: LSE's $27 Billion Refinitiv deal creates trading powerhouse.
EssilorLuxottica SA agreed to buy GrandVision NV in a deal that values the smaller Dutch eyecare retailer at as much as 7.3 billion euros ($8.1 billion) and brings the Ray-Ban sunglasses brand and Vision Express prescription centers under the same roof. Read the full story by Bloomberg News: Ray-Ban maker buys GrandVision.
BDO USA has acquired Loughlin Management Partners, a boutique business advisory firm focused on corporate restructuring and turnaround services. The target also offers value creation services for private equity firms.
Baring Private Equity Asia has acquired Acuon Capital, a South Korean consumer finance and leasing company with a $3.9 billion loan portfolio, from J.C. Flowers. Advisors to J.C. Flowers include: Kim & Chang and Reimei Global Advisors. Advisors to Baring include: Citigroup, Arnold & Porter, Two Six Capital, and Kim & Chang.
The Cheesecake Factory Inc. (Nasdaq: CAKE) is buying Fox Restaurant Concepts and the remaining stake it does not already own in Italian restaurant chain North Italia for up to $353 million. Cheesecake is paying $130 million for the stake in North Italia, which it originally invested in 2016. Fox owns 45 restaurants under the Flower Child, Culinary Dropout, Blanco and The Henry brands. Latham & Watkins is advising Cheesecake.
Audax Private Equity has bought Stonewall Kitchen, a manufacturer of food and gift products including jams, olive oils, bottled sauces, crackers and pancake mixes, from Centre Partners. Advisors to the target include: Baird and Greenberg Traurig and Akerman.
Abry Partners is buying a majority stake in Franklin Energy Group, a provider of energy efficiency and demand response program services, from Kohlberg & Co. Advisors to Franklin include: Harris Williams and Paul, Weiss, Rifkind, Wharton & Garrison LLP. Kirkland & Ellis is representing Abry.
RedNest Partners and Admiral Capital Group have bought Tecmotiv, a provider of maintenance and repair services for military vehicles. Philpott Ball & Werner advised Tecmotiv.
Stellex Capital Management-backed Fenix Parts has acquired Cox Truck and Van Inc., which operates a full-service auto recycling facility.
Aquiline Capital Partners-backed ClearCourse Partnership has bought Protech, a customer relationship management software company for the public sector and not-for-profits.
Riata Capital Group-backed Acuity Eyecare Group has acquired 11 eyecare practices in Texas.
Cantel Medical Corp. (NYSE: CMD) is buying Hu-Friedy Mfg. Co.,, a manufacturer of instruments and instrument reprocessing workflow systems for the dental industry, for up to $775 million. Advisors to Cantel include: Perella Weinberg Partners LP and Wachtell, Lipton, Rosen & Katz. Advisors to the target include: Moelis & Co. (NYSE: MC) and Latham & Watkins.
eStruxture Data Centers is buying Shaw Communications Inc.'s Calgary-1 data center.
Bregal Sagemount-backed Steele Compliance Solutions has acquired Osprey Compliance Software.
Bauer Media Group has purchased Camilyo Online Ltd., a provider of digital management services.
American Express (NYSE: AXP) is buying Acompay, a digital automation platform, from Acom Solutions. The target helps business customers make supplier payments easily and securely, manage business spend and improve cash flow.
Most private equity firms are not meeting cheif financial financial officer expectations, according to a survey from Accordion. Almost All CFOs say the reporting demands of their PE firms are unreasonable, and there is a disconnect between the operational guidance CFOs need from their PE firms and the guidance they get particularly around merger strategy and merger integration. Accordion conducted online and e-mail interviews with 200 dealmakers, half of whom are PE investors and half of whom are CFOs at PE-backed companies. Accordion works alongside sponsor management teams and focuses exclusively on the office of the chief financial officer. For more on Accordion, see Dealmaker's guide to service providers: Accordion, Axial, BluWave, Frazier & Deeter, Intralinks.
Two of the three multibillion-dollar payment mergers announced in 2019 closed this week, and these global giants must now fend off the invigorated fintechs eager to nab unhappy merchant and bank clients. Read the full story: As big fintech mergers close, let the customer feeding frenzy begin.
Gerald Connolly has been hired as CEO at Gryphon Investors-backed Potter Electric Signal Co., a provider of fire and life safety products. Connolly was most recently with building infrastructure company Legrand SA. Gryphon invested in Potter in 2017.
DIVERSITY IN DEALMAKING
Women hold just 9.4 percent of senior positions at PE firms globally, according to a recent study by HEC Paris. The low representation underscores the importance of projects that feature successful female dealmakers, such as Mergers & Acquisitions' Most Influential Women in Mid-Market M&A. The special report profiles 36 women M&A pros and includes interviews with them.
“There is this idea in sociology: You've got to see it to be it,” said NBC News correspondent Stephanie Rhule about the importance of building communities of women in the financial services sector, where they are woefully underrepresented. Rhule spoke at the second annual Exponent Exchange, hosted by Exponent Women, a group devoted to nurturing the financial services careers of its female members. Read the full story: Exponent Exchange brings together 200 women dealmakers for second annual event.
Gender-diverse PE investment committees outperformed all-male investment committees substantially, finds a recent study by HEC Paris professor Oliver Gottschalg. The results are compelling: Gender-diverse PE investment committees outperformed all-male investment committees substantially, as measured by several metrics: 7 percent more alpha; .52x more total value to paid-in multiple; and 12 percent higher internal rate of return. Also impressive: the failure rate of gender-diverse investment committees was 8 percent lower. The findings provide concrete evidence showing the value of including women on deal teams and may help to convince skeptics. For more, read Why private equity firms should include more women on deal teams.
A new payment company is attacking the hurdles professional women face when returning to the workforce after time away, a distinct problem borne out of the broader gender gap in financial services. “This is an economic problem, where you have something like a parent who left the workforce and then could not get back in,” said Samantha Ettus, founder and CEO of Park Place Payments. Read the full story: Behind a payment startup's battle to bridge the gender gap.
Alex Rodriguez is best known as the New York Yankees star who hit 696 home runs over the course of his 22-year baseball career, but today he’s making a name for himself as an investor as the founder and CEO of A-Rod Corp. One recent example: While serving as a guest judge on CNBC’s Shark Tank, Rodriguez backed Ice Shaker, an insulated bottle maker founded by former National Football League fullback Chris Gronkowski. Rodriguez talked about his life off the field as a savvy investor since his 20’s as the keynote speaker at EisnerAmper’s 4th annual Alternative Investment Summit at the The Museum of Modern Art on June 19. Among the topics discussed in a conversation led by Charles Weinstein, CEO of EisnerAmper: Rodriguez’ childhood as the son of a single mom; his investment thesis, which shares much with other middle-market investors; how he’s helping singer/dancer/actress Jennifer Lopez (to whom he became engaged in March) transition her business initiatives from licensing her brands to owning them; and how one day he just might buy a baseball team. Read the full story: A-Rod talks Ice Shaker, NRG eSports, J. Lo & maybe buying a baseball team.
Activity and urgency characterize the current dealmaking environment, say investment bankers and other M&A advisors interviewed by Mergers & Acquisitions. After a record-breaking 2018, forecasts for 2019 remain bullish. Advisors point to a lot of cash that must be deployed by strategic buyers and private equity firms alike; a healthy U.S. economy; and low interest rates. Competition for high-quality targets has never been more intense, especially for technology providers, they report, which means sellers are commanding high prices. It all adds up to a seller’s market. A mood of urgency prevails, as dealmakers seek to close deals quickly, while conditions remain favorable. The advisors interviewed for this story say they don’t see signs of a recession this year; however they are closely monitoring bellwethers, including corporate earnings, wage pressure, global supply chains and slowdowns abroad. They are recommending that clients be prepared for an economic slowdown in the next two years. Specialization is the name of the game, and investment bankers advise clients to seek targets with business-model stability, limited cyclical exposure and a recurring revenue business model. Technology, business services, healthcare, consumer and manufacturing are among the most promising sectors. Read the story: 8 M&A advisors urge closing deals now, while economy stays strong.
Organizations in industries, ranging from manufacturing to healthcare, are using M&A to add automated technology in their processing systems. Advances in robotic technology are making it possible to complete more complex tasks at higher speeds and with improved control and outcomes. Read the full story: Accelerating automation through M&A.
Excelled. Innovated. Inspired. That’s what the eight winners of Mergers & Acquisitions’ 12th Annual M&A Mid-Market Awards did in 2018. Our awards honor the leading dealmakers and deals that set the standard for transactions in the middle market. In addition to Nike, award winners include: Fortive, TA Associates, the Riverside Co., Harris Williams, Monroe Capital, Goodwin and Luminate Capital Partners' Hollie Haynes. Read our full coverage: Meet the winners of the M&A Mid-Market Awards: Nike, Fortive, TA, Harris Williams.
ACG New York's summer dealmaking conference takes place at Gurney's Star Island Resort & Marina in Montauk, NY, July 31-Aug.1.
The Great Lakes ACG Capital Connection is being held at the Westin Book Cadillac Detroit Hotel in Detroit Sept. 4-6.
ACG Boston and ACG Connecticut are hosting the 5th Annual ACG New England Fall Conference at Gurney's Newport Resort & Marina in Newport, Rhode Island Sept. 17-18.
M&A East is taking place at the Pennsylvania Convention Center in Philadelphia Oct. 22-23.