Following a fabulous 2018 for M&A, January was an active month in the middle market, with significant deals closed by tech-focused private equity firm Thoma Bravo, Sonic Healthcare and Staples. In January, sectors that saw activity include retail and software. On the strategic buyer side, Cision Ltd. (NYSE: CISN) bought TrendKite Inc. for $225 million. TrendKite uses artificial intelligence to help communications professionals assess the impact of their efforts. Waitr Holdings Inc. (Nasdaq: WTRH) purchased online food delivery company Bite Squad for about $321 million. Among the PE deals: Sycamore Partners-backed Staples acquired office products distributor Essendant Inc., and Thoma Bravo purchased security testing Veracode for $950 million. Records were broken in 2018, including deal activity for the middle market and private equity-backed buyouts.
Related: Thoma Bravo, Sonic Healthcare and Staples closed big deals in January.
For more on 2018, see M&A soared in 2018; companies confident about dealmaking in 2019.
Deal news
Ingersoll-Rand plc (NYSE: IR) is buying Precision Flow Systems from BC Partners and the Carlyle Group (Nasdaq: CG) for $1.45 billion. The target is a provider of fluid management systems under the Milton Roy, LMI, Haskel, BuTech, Dosatron, YZ Systems, Williams and Hartell brands, and serves the agriculture , food and beverage and pharmaceutical sectors. Latham & Watkins is advising Precision Flow.
Francisco Partners has acquired medical data company Qualcomm Life from Qualcomm Inc. The target connects medical devices to clinical information systems allowing healthcare providers to monitor patient health and improve patient care. Centerview Partners and DLA Piper advised Qualcomm. Kirkland & Ellis advised Francisco.
Morgan Stanley (NYSE: MS) is acquiring Solium Capital Inc., a provider of software-as-a-service for equity administration, financial reporting and compliance. Davis Polk & Wardwell LLP and Osler, Hoskin & Harcourt LLP are advising Morgan Stanley.
BDT Capital Partners is buying a majority stake in accounts receivable finance company Commercial Credit Inc. from Lovell Minnick Partners.
Stellex Capital Management has invested in Cisco Equipment, a provider equipment, parts and supplies to the infrastructure, construction, agriculture and industrial sectors, in partnership with the Sibert family. Oppenheimer & Co., Milbank, Tweed, Hadley & McCloy LLP and K&L Gates LLP advised Stellex. Gerald & Cremer represented Cisco. Syntal Capital Partners and Todd, Barron, Thomason, Hudman & Bebout P.C. advised the Sibert family. CIT Bank provided financing.
Weld North Education is buying digital curriculum company Glynlyon Inc. from Linsalata Capital Partners. Ropes & Gray is advising Weld North. Macquarie Capital and Calfee, Halter & Griswold LLP are advising Glynlyon.
Premium Franchise Brands has bought Intelligent Office, a provider of administrators and executive office suites. The McLean Group advised the target.
Ara Partners Group has invested in Priority Power Management LLC, an independent energy management services and consulting firm.
Ardian is buying Italian beverage services company Celli Spa.
D.A. Davidson & Co. is buying wealth management firm Nelson & Associates.
People moves
Alex Ballantine, Brian Cole, Ryan Engelhardt, Jon Fitsimmons, Matt Kessler, Martin Luen, John Sun and James Weck all have been promoted to managing directors at Baird.
Featured content
Technology M&A is thriving, and private equity firms are hot on the trail of innovations that will drive sustainable value to customers and make companies more efficient, more effective and less expensive to run. Among the developments appealing to PE investors are: artificial intelligence, data management, data virtualization, digital marketing, healthcare IT, industrial automation, the Internet of Things, machine-to-machine learning, payment processing and Software-as-a-Service. To gain more insights into what kinds of tech deals will dominate the field in 2019, Mergers & Acquisitions reached out to 10 private equity firms that are active investors in technology: Francisco Partners, Genstar, Great Hill, HGGC, Insight, LLR, Riverside, Silver Lake, TA and Vista.
Related: 10 private equity firms share strategies for tech M&A.
Mergers & Acquisitions asked leading dealmakers about their outlook for the middle market in 2019. Watch the video conversations, shot at ACG Philadelphia's M&A East: It is a seller's market, and deal activity is expected to remain steady, says Ramsey Goodrich of Carter Morse & Goodrich: Outlook 2019: Great time to sell. Private equity firms and strategic buyers will use their excess cash and capital to look for deals, says Bharat Ramprasad of Stifel Nicolaus: Outlook 2019: Excess capital to fuel M&A. Rising interest rates and regulatory changes may increase volatility, cautions Mark Emrich of Murray Devine: Outlook 2019: Keep an eye on rising interest rates.
Bank volume was steady, but deal values would have been the lowest in years if not for one big, and very intriguing, transaction. For more, see: Bank M&A: What January data hints about 2019.
Not only do carve-outs account for 10 percent of all M&A activity, the percentage of carve-outs conducted by buyout firms (as opposed to strategic buyers) is on the rise, and sharply at that. And that’s important, because, at the risk of overextending the curveball analogy, the carve-out is ‘filthy stuff.’ The inherent complexities of the deal can puzzle even serial acquirers, say Accordion's Gary Appelbaum and Eric Salit in this guest article: Carve-out curveball: How to hit a home run.
Consumerization of healthcare, high-deductible health plans, and more self-payment by patients are contributing to the overall increased demand for PT services, write Battery Ventures general partner Chelsea Stoner in this guest article: Rising demand for physical therapy drives deals.
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 and Pelham 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
The SBIA and the AM&AA are hosting a Deal Summit at The Doral in Miami from Feb. 20-22. The gathering offers networking opportunities with senior-level M&A advisors and lower middle-market private equity investors.
ACG New York hosts the 11th Annual Healthcare Conference at the Metropolitan Club in Manhattan on Feb. 28. Dealmakers network with healthcare-focused private equity investors and other industry professionals.
ACG Minnesota and Corvus North are hosting AIM: A Women's Leadership Conference at the Minneapolis Hyatt on March 7. The conference is designed to support and encourage female leaders to grow and achieve success throughout their career journeys.
ACG New York's Women of Leadership is hosting a golf event and reception on March 21 at Konnect Golf in Manhattan. The event brings together female dealmakers from private equity firms, investment banks and lenders.
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