M&A wrap: Soundcore Capital, Atos, Syntel, Expera, KPS, LaSalle, Rising Stars of Private Equity
Soundcore Capital Partners, which invests in lower middle-market companies in the manufacturing, business services and specialty distribution sectors, has raised $350 million for its second fund. The fund will execute Soundcore's buy and build strategy of targeting businesses with recurring revenues and attractive margins. “We look forward to continuing to effectuate our strategy of investing in niche industries throughout North America and seeking to build to scale within them,” says Soundcore managing partner and founder Jarrett Turner. The firm looks to invest up to $70 million of equity in deals. New York-based Soundcore was founded in 2015 by Turner and has since acquired 30 companies. Turner previously held roles at Sun Capital Partners and Cleaview Capital. “Soundcore embraces an entrepreneurial, collaborative approach and we believe our commitment to this culture will enable the firm to excel in creating exceptional long-term value for our investors," adds Soundcore managing partner Feliks Zarotsky, who previously held roles at Sun Capital and Tower Three Partners. Some of Soundcore's portfolio companies include Alloy Wheel Repair Specialists, Pumpman Holdings and Sweeping Corporation of America. UBS Private Funds Group served as Soundcore's placement agent on the fund raise. Kirkland & Ellis provided legal advice.
Mergers & Acquisitions has announced the Rising Stars of Private Equity. These 11 up-and-coming investors are expected to play significant leadership roles in the future. Congratulations to:
Daniel Hopkin, Partner, Kainos Capital
John Kos, Principal, GTCR
Erik Latterell, Director, Stone Arch Capital
Ethan Liebermann, Principal, TA Associates
Jaime McKenzie, Director, Monomoy Capital
Jennifer Roach, Vice President, Yellow Wood Partners
Joseph Rondinelli, Principal, Frontenac
David Shainberg, Vice President, Balmoral
Tom Smithburg, Vice President, Shore Capital Partners
Nicholas Stone, Managing Director, Cyprium Partners
Afaf Ibraheem Warren, Senior Associate, Siris Capital
For profiles of the emerging leaders, see Meet Mergers & Acquisitions' 11 Rising Stars of Private Equity.
French information technology services provider Atos SE has agreed to buy Syntel Inc. in a $3.4 billion cash deal to help it get better access to U.S. financial customers like American Express Co. and State Street Corp. Syntel provides technology and IT services by using a network of software development centers. Read the full story: Atos buys Syntel in U.S. Push for Amex and FedEx.
Ahlstrom-Munksjö Oyj, a Finland-based provider of fiber-based materials, is buying Expera Specialty Solutions LLC, from KPS Capital Partners for $615 million. Expera is a manufacturer of paper products for the industrial and technical, food and pressure-sensitive release liner sectors. Deutsche Bank, Barclays and Paul, Weiss, Rifkind, Wharton and Garrison LLP are advising KPS and Expera.
LaSalle Capital has purchased National Gift Card Corp., a B2B gift card and prepaid card company. The target serves more than 500 brands with digital and physical gift cards.
Synovus Financial in Columbus, Georgia., has agreed to buy FCB Financial Holdings in Weston, Florida. The $31 billion-asset Synovus said in a press release that it will pay $2.9 billion in stock for the $11 billion-asset FCB. Read the full story: Synovus returns to large-scale M&A with FCB acquisition.
PGT Innovations (NYSE: PGTI), a manufacturer and supplier of windows and doors, is buying Western Window Systems from PWP Growth Equity, the middle-market private equity arm of Perella Weinberg Partners, for $360 million. The deal expands PGT's presence outside of Florida. Jones Day and SunTrust Robinson Humphrey are advising PGT, and Duff & Phelps provided a fairness opinion to its board. Jefferies and Latham & Watkins are advising Western Window.
Timken Co. (NYSE: TKR) is buying precision motion control products maker Cone Drive from Clyde Blowers Capital. William Blair and McGuireWoods are advising CBC.
Kojo Appenteng has joined Edgemont Capital Partners as head of healthcare information technology investment banking. Appenteng most recently led HCIT investment banking at Credit Suisse.
Bruno Deschamps was hired by Clayton, Dubilier & Rice as an operating advisor. Deschamps is the chairman of hygiene and sanitation products company Diversey and he previously served as an operating partner for CD&R from 2002 to 2007.
Benoit Lavigne has joined Morrison & Foerster's London office as a partner. Previously with Ropes & Gray, Lavigne focues on financing and lending in cross-border M&A.
Elizabeth Philipp was hired by global asset manager Capital Dynamics as a managing director and head of North American business development. Previously with Angelo, Gordon & Co., Philipp will be leading the expansion of Capital Dynamics' relationships with institutional investors.
High valuations and abundant use of debt continued to mark completed deal activity in the first quarter of 2018, according to GF Data. Two hundred and eight private equity groups and other deal sponsors reported on 52 transactions closed in the quarter. The overall average valuation mark for the quarter was 6.9x valuation multiple, a marked retreat from the torrid 8.0x valuation multiple average in the prior quarter. At first blush, valuations in 2018 seem to have retreated to pre-2017 levels. However, GF Data gravitates to the view that the random fall of completed deals in 4Q 2017 versus 1Q skewed artificially high in the first period and low in the second. Averaged together, the result is a continuation of already unprecedented aggregate valuations attained in the middle quarters of GF Data. Read the full story: Valuations dropped slightly but are still higher than average.
Serena Williams dazzled at Wimbledon. Out of the grand slam game for 16 months as she started a family and suffered post-delivery complications, Williams, seeded 25th, fought her way into the finals. Meghan, Duchess of Sussex and Catherine, Duchess of Cambridge watched from the All England Club's Royal Box, as Williams finished second to Angelique Kerber on July 14. Williams is among many star athletes who have excelled in business as well as in sports. If you’ve had a beer and chicken wings while waiting for a flight at the Raleigh-Durham International Airport, or grabbed a smoothie while shopping at the Federal Plaza in Rockville, Maryland, or enjoyed a steak dinner at New York’s Grand Centralterminal, you’ve got a sports celebrity athlete to thank. Among the athletes investing are Dale Earnhardt Jr.,LeBron James, Michael Jordan and Greg Norman. View our slideshow: Danica Patrick, LeBron James, Serena Williams invest in food & wine.
Summer reading list: From stories of star athletes Arnold Palmer, Keith Hernandez and Tiger Woods to advice from entrepreneurs Bridgewater Associates’ Ray Dalio, KPCB’s John Doerr, Nike’s Phil Knight and Brava Investments’ Nathalie Molina Niño, plus strategies to help business leaders in general, and female dealmakers in particular, the 15 books on Mergers & Acquisitions’ list entertain, instruct and inspire. Check out our listicle: Dealmaker’s guide to summer reading: 15 new books.