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
Xerox Holdings Corp. (NYSE: XRX) increased its offer price for HP Inc. (NYSE: HPQ) to $24 a share, boosting the bid by $2 a share in an effort to win control of the computer hardware maker, which has previously refused to engage in takeover talks because it said the offer was too low. Read the full story by Bloomberg News: Xerox increases offer for HP.

Silver Lake has invested in gym operator Equinox, the majority owner of SoulCycle. Equinox will use the capital to expand its digital platform and add more locations, as it tries to compete against Peloton.

Simon Property Group Inc. (NYSE: SPG) is buying a majority stake in Taubman Centers Inc. (NYSE: TCO) for $3.6 billion. Taubman owns, manages or leases 26 shopping centers across the U.S. and Asia. “By joining together, we will enhance the ability of TRG to invest in innovative retail environments that create exciting shopping and entertainment experiences for consumers, immersive opportunities for retailers, and substantial new job prospects for local communities,” says Simon CEO David Simon. BofA Securities, Paul, Weiss, Rifkind, Wharton & Garrison LLP and Latham & Watkins LLP are advising Simon. Goldman Sachs (NYSE: GS) and Honigman LLP are advising Taubman. Kirkland & Ellis represented Taubman’s special committee.

Square Inc. (NYSE: SQ) has bought machine learning company Dessa. Latham & Watkins advised Square.

American Industrial Partners-backed Rand Logistics is buying American Steamship Co. from GATX Corp. The target offers dry bulk transportation services.

Harvest Partners has completed its investment in MRI Software, joining existing investors TA Associates and GI Partners.

Huron Capital-backed Ronnoco Beverage Solutions has bought Trident Beverage, a provider of beverage and dispensing products for the foodservice sector.

Align Capital Partners-backed Alliance Source Testing has acquired Metco Environmental, an emissions testing services company, from Eurofins Scientific’s TestAmerica.

Varsity Healthcare Partners-backed Probo Medical has acquired Elite Medical Technologies and Future Medical Equipment.

Inflexion-backed Ocorian has acquired Estera, a provider of funds, coporate and trust services. Bridgepoint advised the target.

For more deal news, see Weekly wrap: Advent, Crosspoint, Science Applications, Westrock Coffee.

For more on fundraising, see PE fundraising scorecard: Declaration Partners, KKR, Magnum, RC Advisors.

DEAL TRENDS
Global debt fundraising is on the rise, as funds look for alternative investments to park their excess capital. Middle-market loans aim to provide returns on investments in the high single-digit to low double-digit range. The average private debt fund size reached over $1.4 billion in 2019, the largest number on record, according to PitchBook’s H2 2019 Global Private Debt Report, while dry powder rose above $240 billion. Global private debt fundraising reached almost $126 billion across 89 funds in 2019. Direct lending accounted for about $72 billion, or nearly 57 percent of global capital raised in 2019.

PEOPLE MOVES
Dean Nordlinger has joined law firm Blank Rome as a partner. He was previously with Miles & Stockbridge, and focuses on private equity and M&A.

Margery Fischbein and Deborah Aghib were hired by investment bank Cassel Salpeter & Co. as managing directors where they are focusing on the healthcare sector. Fischbein was most recently with Seaport Global, while Aghib comes from CRG.

Michael Breit, Christopher Loiacono and Jay Weinstein have been promoted to vice chairs at EisnerAmper.

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 examines the impact of 7 technologies on M&A in the retail sector. Read the whole series:

Overview: Retail Tech M&A: 7 Technologies Driving Change
Retail Tech M&A #1: Nike, McDonald’s, PayPal, add customization, IoT
Retail Tech M&A #2: Why Walmart and other retailers are buying artificial intelligence startups
Retail Tech M&A #3: Amazon leads race to build fulfillment centers
Retail Tech M&A #4: Do robots fill orders faster?
Retail Tech M&A #5: Voice recognition gives retailers more ways to communicate
Retail Tech M&A #6: Data improves customer service
Retail Tech M&A #7: Demand for convenience drives growth in mobile ordering

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 each, 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.