M&A wrap: Rothschild & Co., Five Arrows, Medtronic, Adobe, Marketo, Most Influential Women

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Rothschild & Co., based in Paris, is entering the U.S. private equity market. The debut $655 million fund, called Five Arrows Capital Partners, is investing up to $70 million in businesses that are valued between $75 million to $500 million. "The middle market holds the greatest pool of businesses that meet our risk appetite and yet have significant headroom for further growth," says the company on its website. Family-owned Rothschild & Co. has "been at the centre of the world's financial markets for over 200 years." The firm provides M&A, strategy and financing advice, as well as investment and wealth management services to large institutions, families, individuals and governments. It has three business lines, Global Advisory, Private Wealth & Asset Management and Merchant Banking. Five Arrows Capital Partners is the 13th fund raised by Rothschild Merchant Banking over the last 10 years, and brings the firm's total assets under management to more than $10 billion across private equity, senior and junior credit, primary and secondary fund of funds and co-investments. Five Arrows Capital is focused on the healthcare, data and software, and business services sectors and has already invested about 15 percent of capital across two investments. In 2018, the fund invested in patient safety software provider Datix and in 2017, the fund acquired the Stepping Stones Group, which offers therapy and education services to children with special needs, including autism, in educational settings. Five Arrows Capital is based in New York, and is led by Ari Benacerraf and Adam Lehrhoff, the co-founding partners and members of the fund's investment committee.

For more on the fundraising efforts of PE firms, see: 10 PE firms armed with fresh capital and PE fundraising scorecard: Lincoln Peak and Opengate.

Mergers & Acquisitions has opened up the nomination process for the fourth edition of The Most Influential Women in Mid-Market M&A. Efforts to recruit and retain women in the financial services industry have increased in recent years; nevertheless, women still make up only about 14 percent of dealmakers in the middle market. By identifying and featuring dozens of influential women, Mergers & Acquisitions nurtures the community of female leaders and provides role models for women who are at earlier stages of their careers. To be considered, candidates must be women who are outstanding dealmakers both inside and outside of their firms. Evidence of influence in the broader M&A industry is essential. When nominating a candidate, please explain how she outperforms her colleagues at her firm and in the industry. Please provide examples of deals she has led, initiatives she has launched and other instances that show evidence of her influence in the middle market. While considering the merits of candidates, it’s helpful to read about women who have met our criteria in the past, such as Sarah Bradley, who co-founded private equity firm Kainos Capital and graced our 2018 cover. See the profiles of 35 women in our previous edition. Nominations must be received by Monday, October 15, 2018. Click here to learn more about the criteria and to submit a nomination.

Deal news
Medtronic plc (NYSE: MDT) agreed to buy the shares it doesn’t already own in Mazor Robotics Ltd., as the medical equipment giant expands its leadership in the market for spinal surgery. The deal, which values the target at $1.6 billion, is an effort by Medtronic to hasten the move toward guided, robotic procedures. It builds on an earlier agreement between the two companies, which included Medtronic's taking a stake in Mazor and serving as the sole distributor of the robotic company’s Mazor X system. Read the full story: Medtronic buys Mazor Robotics in $1.6 Billion Deal.

American International Group Inc. (NYSE: AIG) is acquiring Glatfelter Insurance Group, a full-service broker and insurance company providing services for specialty programs and retail operations. BofA Merrill Lynch and Willkie Farr & Gallagher LLP are advising Glatfelter. Evercore Inc. (NYSE: EVR) and Skadden, Arps, Slate, Meagher & Flom LLP are advising AIG.

Adobe Systems Inc. (Nasdaq: ADBE) agreed to acquire software maker Marketo Inc. for $4.75 billion, bolstering the software company's offerings for marketers in a bid to compete against Salesforce.com Inc. (NYSE: CRM) and Oracle Corp. (NYSE: ORCL). Read the full story: Adobe acquires Marketo in marketing push.

Harbour Group-backed Lindstrom LLC has acquired fasteners distributor Stelfast Inc.

For more deal announcements see The weekly wrap: Drillinginfo, Marc Benioff, Western & Southern.

Featured content
"Data and artificial intelligence are necessary conditions for private equity today,” says J. Taylor Crandall, a managing partner and a founding member of Oak Hill Capital Partners,which began investing in 1986 as the family office for Robert Bass, one of four brothers who founded Bass Brothers Enterprises, based in Fort Worth, Texas. “Historically, the data wasn’t available. Businesses were run on visceral intuitions. Now, the data is readily available and exponentially created. Every time you click on the Internet, it’s creating data for somebody to analyze how to run their businesses better. Data analytics is the low-hanging fruit to create value in every portfolio company we own.” For more, read the full story: Due diligence meets big data: Two Six Capital, Oak Hill, Clarion among pioneers.

Food & beverage M&A offers plenty of mouth-watering deals. Giants Coca-Cola Co. (NYSE: KO) and PepsiCo Inc. (Nasdaq: PEP) update their product lines with healthy offerings, while private equity firms, such as Brynwood Partners, breathe new life into tried and true brands, like Pillsbury. And lots of buyers experiment with meal kits and delivery methods, fueling M&A. Read the full story: 9 food & beverage companies loved by consumers and dealmakers alike.

Strategic buyers leverage data, sell more snacks and cater to seniors. Mergers & Acquisitions outlines the M&A strategies of 8 corporations, including Best Buy, Energizer, Fortune Brands, Hershey, Nike, P&G, Stanley Black & Decker and Tyson Foods. See the full story: Best Buy, Hershey, Nike, P&G and more wield M&A to grow.

Tyson Foods Inc. (NYSE: TSN), the owner of Hillshire Farm, wants to “feed the world” with its protein brands and will seek acquisitions to help. How Tyson is focusing on what it does best through M&A.

Between 70 and 80 percent of all M&A integration projects fall short of delivering anticipated value. This isn't because the acquisition target is somehow subpar, it's because the acquiring firm lacks a strong integration strategy. Read the full story: How to accelerate value in the first 100 days after an acquisition.

Why investors like diversity. "Companies that are inclusive and also diverse tend to outperform companies that aren't," says investor Lorine Pendleton of Pipeline Angels and Portfolia in this video interview shot at Exponent Exchange, a gathering of 200 female dealmakers. Watch the full video: M&A Insights: Inclusion investing.

Meet Mergers & Acquisitions 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. See: Meet Mergers & Acquisitions' 11 Rising Stars of Private Equity.

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