M&A wrap: Sterling, Plateau, BC Partners, Presidio, Actis, Equistone
Sterling Construction Co. (Nasdaq: STRL) is buying Plateau Excavation Inc. for $400 million. Plateau serves customers in the e-commerce, data center, distribution center and warehousing, and energy sectors with infrastructure and excavating contracting services. Plateau generated $290 million in 2018. The deal expands Sterling in the Southeast, while it diversifies the company's customer base into other sectors. “The rapid growth in e-commerce, cloud computing, and the continuing rise of internet activities makes Plateau, a company that specializes in data center and warehouse construction, a very attractive addition to Sterling’s portfolio of businesses,” says Sterling CEO Joe Cutillo. "This type of construction commands higher margins than our heavy highway space and enables us to grow alongside an impressive end-customer base including many of the largest and respected e-commerce, social media, logistics providers and big-box enterprises.” Some of Plateau's recent and current construction projects include: An Amazon.com Inc. (Nasdaq: AMZN) fulfullment center in Albama, a Walmart Inc. (NYSE: WMT) distribution center in Florida, and a UPS (NYSE: UPS) warehouse at the Charlie Brown airport in Atlanta. Houlihan Lokey (NYSE: HLI) is advising Platau. BMO Capital Markets is providing financing.
“We know that different people from different walks of life make us a better firm,” said Adam Miller, director of global talent management at the Riverside Co., which employees more than 200 people across four continents, including two female co-fund managers and a female chief operating officer. “We’re creating more opportunities for broader demographics.” Indeed, just about every private equity firm you talk to these days seems intent on becoming attractive to diverse candidates—whether it’s by hiring a chief diversity officer and loosening its dress code (KKR); giving employees flexible hours to spend more time with children (Riverside); offering up to 12 weeks of paid maternity leave and 16 weeks off altogether (ParkerGale); hosting weekly wine-and-cheese gatherings in the summer (Kinzie Capital); or providing on-site professional development and training (Riverside and ParkerGale). Check out: 5 hiring trends in private equity.
BC Partners is buying Presidio Inc. (Nasdaq: PSDO) for $2.1 billion. Presidio is an IT services provider that focuses on digital infrastructure, cloud and security. “Presidio fits squarely with our key investment priorities," says BC partner Raymond Svider. "Its markets benefit from secular growth, as IT systems and networks have become increasingly complex." Advisors to Presidio include: LionTree Advisors and Wachtell, Lipton, Rosen & Katz. Advisors to BC include: Citi, J.P. Morgan Securities LLC (NYSE: JPM), RBC Capital Markets and Kirkland & Ellis.
BC Partners recently sold a minority stake in the firm to Blackstone Group Inc. (NYSE: BX), part of a growing trend. For more, see Why private equity firms sell stakes to other firms.
Actis, an energy infrastructure-focused investment firm has raised $1.23 billion for its first long-term infrastructure fund. The fund is led by Glen Matsumoto, a co-founder of EQT's infrastructure business. Actis' new fund will originate operating infrastructure assets across Latin America, Africa and Asia. The fund has already committed investments to a solar plant in Chile and wind generation assets in Brazil.
Equistone Partners Europe is buying a majority stake in pharmaceutical wholesaler Omnicare. The target distributes finished medicinal products to compounding pharmacies for the patient-specific production of cancer drugs. Advisors to Equistone include: P+P, Alvarez & Marsal, Deloitte, Houlihan Lokey (NYSE: HLI), Dechert, Shearman & Sterling and ETS. Advisors to Omincare include: Hengeler Müller, KPMG, Lincolin International and Honert & Partner.
Graphic Packaging Holding Co. (NYSE: GPK) has acquired paper production and folding carton company Artistic Carton Co. Advisors to the target include: Livingstone, Holland & Knight and Miller Cooper & Co.
Koch-Glitsch, a subsidiary of Koch Industries, has acquired chemical and pharmaceutical process equipment and technology supplier Julius Montz from the Pfaudler Group. Jones Day advised Koch.
Domo Chemicals is buying Solvay's performance polyamides business in Europe. The deal includes the engineering plastics operations in France and Poland; high performance fibers in France; polymer and intermediates operations in France, Spain and Poland.
Genstar Capital has made a growth investment in TA Associates-backed Insightsoftware, a provider of enterprise resource planning and enterprise performance management reporting software.
Challenger banks are hauling in venture capital at a faster pace in 2019, according to a new CB Insights report. In 17 deals globally, challenger banks — generally speaking, digital-first firms that provide basic financial services — raised $649 million in the second quarter; that was up about 8 percent from a year earlier. Venture capitalists invested $1.5 billion in challenger banks in the first half of the year, a 15 percent increase from the same period in 2018. Read the full story: Challenger banks rake in venture capital bucks.
Brian Hecht has joined law firm Katten Muchin Rosenman LLP as a partner. Hecht was previously with Kirkland & Ellis, and focuses on private equity and M&A.
Joe Passaro was hired by financial services firm BTIG as a managing director and head of capital markets. He was most recently with Deutsche Bank Securities.
Looking for a glimpse of what’s to come in the private equity industry? Meet the 10 dealmakers named by Mergers & Acquisitions as the 2019 Rising Stars of Private Equity:
Austin Collier, Branford Castle Partners
Kevin Cunningham, LNC Partners
Shawn Domanic, Sterling Partners
Stephen Jeschke, GTCR
Danielle Lalli, Huron Capital
Jason Mironov, TA Associates
James Oh, Transom Capital Group
Sophia Popova, Summit Partners
Pavan Tripathi, Bregal Sagemount
Christine Wang, Francisco Partners
The Rising Stars share a common set of core values. They are passionate about building companies. They are naturally curious and interested in changing things for the better. They enjoy working with portfolio company managers, investment bankers and other deal team members. They appreciate the responsibility and autonomy their firms have given them. They are grateful for the leaders who have helped shape their careers, and they are generous with their own time when it comes to nurturing the next generation. As the PE industry goes through a generational shift and many firm founders retire, it's well worth getting to know these emerging leaders. They represent the future of private equity. For profiles and video interviews, see Meet Mergers & Acquisitions' 2019 Rising Stars of Private Equity For Q&As, see 10 Rising Stars of Private Equity tell their tales.
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Dealmaking in August began with a bang, as the London Stock Exchange Group Plc agreed to snap up Refinitiv in a $27 billion blockbuster deal. And M&A was hopping in July, with observers predicting the third quarter will be an active one. Meanwhile, here is a table of middle-market deals that closed in the first half of the year, including 3M Co.'s (NYSE: MMM) purchase of MModal's technology business; Apollo Global Management LLC's (NYSE: APO) acquisition of Smart & Final Stores; and KPS Capital Partners' purchase of Brunswick Corp.'s (NYSE: BC) fitness business. For more see, 3M's purchase of MModal's tech business a highlight of H1 dealmaking.
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.
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.
Organizations in industries, ranging from manufacturing to healthcare, are using M&A to add automated technology in their processing systems. Advances in robotic technology are making it possible to complete more complex tasks at higher speeds and with improved control and outcomes. Read the full story: Accelerating automation through M&A.
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.
The Association of Asian American Investment Managers (AAAIM) is holding its annual conference from Sept. 4-5 at Convene at 730 Third Avenue in New York.
The Great Lakes ACG Capital Connection is being held at the Westin Book Cadillac Detroit Hotel in Detroit from Sept. 4-6.
ACG Boston and ACG Connecticut are hosting the 5th Annual ACG New England Fall Conference at Gurney's Newport Resort & Marina in Newport, Rhode Island from Sept. 17-18.
Exponent Women is hosting a fall rooftop networking session at RSM in New York on Oct. 7.
M&A East is taking place at the Pennsylvania Convention Center in Philadelphia from Oct. 22-23.
Third Annual Women in Alternative Investments Career Forum is taking place at the New York Hilton on Nov. 8.