M&A wrap: Sheryl Schwartz, A-Rod, HEC Paris, MVision, Thomson Reuters, Falfurrias

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Private equity investment committees that include women produce higher returns and lower risk of failure than all-male counterparts, finds new research led by HEC Paris professor Oliver Gottschalg and MVision Private Equity Advisers. The body of data demonstrating that diversity improves performance has been growing in recent years, but this is the first study to consider performance at the PE deal level. Gottschalg analyzed gender balance on the deal teams of nearly 2,500 PE transactions in North America and Europe. The results were dramatic: Gender-diverse 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, points out PE investor Sheryl Schwartz, who spoke on a panel to discuss the report. “With better performance and lower loss rates, why wouldn’t PE firms put women on deal teams?,” says Schwartz, who serves on the board of the Women’s Association of Venture and Equity (WAVE) and is one of Mergers & Acquisitions Most Influential Women in Mid-Market M&A.

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.

DEAL NEWS
Thomson Reuters is buying Confirmation, a provider of digital confirmation services to more than 16,000 audit firms and 4,000 banks, from Great Hill Partners. "The audit industry is changing rapidly, with confirmations being a critical, yet previously challenging part of the process," says Charlotte Rushton, president, tax and accounting professionals, Thomson Reuters.

Pamlico Capital is making a growth investment in Digitech Computer, a provider of billing technology services to the emergency medical services transportation sector. Advisors to Digitech incude: Baird and Denton US LLP. The legal advisor to Pamlico is Alston & Bird.

Falfurrias Capital Partners is buying condiments maker the C.F. Sauer Co. The target produces spices and seasons under the Duke’s Mayonnaise, the Spice Hunter, Sauer’s, Gold Medal and Bama brands. Advisors to C.F. Sauer include: RBC Capital Markets and Williams Mullen. The legal advisor to Falfurrias is McGuireWoods.

For more deal announcements, see Weekly wrap: Pfizer, BidFair, Sekisui.

For more on PE fundraising, see PE fundraising scorecard: Aquiline, Brightstar Capital, Centre Lane, Jade Equity.

FEATURED CONTENT
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.

Healthcare companies are spending more on information technology than ever before. Private equity firms including: Bain Capital, GTCR, Great Hill Partners, The Riverside Co. and New Heritage Capital, are investing in the innovations most in demand, including big data, SaaS and artificial intelligence, as we explore in depth in Mergers & Acquisitions' feature, Healthcare's must-have technologies. “Healthcare IT is the largest cottage industry in the world,” says Sam Hendler, who leads healthcare IT deals at Harris Williams.“Healthcare IT is a highly fragmented, multi-billion-dollar market with thousands of companies focused on different $250 million to $500 million sub-markets. Savvy investors see there is an opportunity to aggregate assets and build platforms of scale. It’s an incredibly exciting time in healthcare IT.” For recent transactions that showcase the trends, see 5 private equity-backed healthcare IT deals.

Recent deals from Bain Capital, KKR and TPG Capital suggest that big funds are waking up to the unlocked potential in the education sector, both in the U.S. and globally. Read the full guest article by MHT Partners' Alex Hicks: Why impact investors love the education sector.

Tech dominates dealmaking. The technology, media and telecom, or TMT, sector accounted for about 40 percent of total private equity deal volume and one-third of total capital invested by PE firms over the last five years, according to EY Private Equity. Looking forward, the next five years of M&A activity will be fueled by a whole new set of developments. As one wave of technological innovation crests, another is forming. “With themes such as cloud computing and mobility now mainstream, PE firms are focusing on the next wave of disruption — technologies such as artificial intelligence and machine learning, robotic process automation (RPA), Internet of Things (IoT), robotics, drones, blockchain, augmented reality and virtual reality,” finds the April edition of EY’s quarterly PE Pulse report. Read our full coverage: Smart cities, IoT, AI, robots, edge computing will fuel next wave of tech M&A.

Big data, Artificial Intelligence (AI), the Internet of Things (IoT) and 5G are transforming the business world. By embracing these technologies, organizations across the globe are realizing untapped potential in efficiency, customer experience, talent and profitability, and have been able to make better, more streamlined mergers and acquisitions, writes Bank of America Merrill Lynch's Robert Arth in a guest article. Read the full story: Why the middle market needs big data.

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.

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 andPelham 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. Related: Meet the 2019 Most Influential Women in Mid-Market M&A.

EVENTS
ACG Tennessee hosts the Mid-South ACG Capital Connection at the Omni Louisville Hotel in Louisville, Kentucky from June 20-21.

Exponent Women hosts the Annual Exchange, which brings a trusted network of women dealmakers together for a focused day of robust content and networking, at Second in New York, on July 11. The Exchange provides attendees with opportunities to establish new connections, reinforce existing ones and absorb timely and relevant knowledge from industry leaders.

The Women's Connection Golf Clinic & Networking event is taking place on July 17 at the Granite Links Golf Club in Quincy, Massachussets. The event is being hosted by ACG Boston.

ACG Seattle hosts the Northwest Middle Market Growth Conference at the Fairmont Olympic Hotel in Seattle on July 25.

The Great Lakes ACG Capital Connection is taking place at theWestin Book Cadillac Detroit Hotel in Detroit from Sept. 4-6.

ACG New York's summer dealmaking conference is being held from July 31-Aug.1 at Gurney's Star Island Resort & Marina in Montauk, NY.

M&A East is taking place at the Pennsylvania Convention Center in Philadelphia from Oct. 21-23.

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