M&A wrap: Uber, VMware, William Blair, Stifel, NewSpring, Northern Private, Most Influential Women, Giving Back

If there’s anything M&A professionals dislike, it’s uncertainty. And heading into 2020, there’s more than enough uncertainty to go around, including questions about the economy, international trade, impeachment, domestic politics and more. The funny thing is, the lack of clarity may actually make the first half of the year a great time for M&A, as dealmakers push to close transactions before the looming uncertainty of Election Day and its outcome. “Many companies will insulate themselves from this uncertainty by seeking to complete deals in the first half of 2020, before the Democratic National Convention in July,” explains Andrew Jessen, head of M&A, William Blair. “The biggest source of uncertainty is driven by who will win the Democratic nomination. If a more moderate candidate wins the nomination, volatility headed into November’s election should be relatively muted. But if a more progressive candidate wins the nomination, investors and business owners will be monitoring the campaigns very closely to see how the Democratic and Republican candidates’ proposed policies could affect specific sectors.” Read the full story, What’s ahead for M&A in 2020? We ask 8 advisors.

Mergers & Acquisitions has named the 2020 Most Influential Women in Mid-Market M&A. This marks the fifth year we have produced the list, which recognizes female leaders with significant influence inside their companies and in the wider dealmaking world. It’s been gratifying to watch the project evolve over the years – and become more influential itself. This year, we received more nominations than ever before. As a result, we expanded the number honored to 42 in 2020, up from 36 in 2019. The project includes many dealmakers who are new to our list, including Chen Na managing director, technology, in investment bank Stifel. "I am taking a more global view of the dealmaking landscape, and encouraging my colleagues to do the same," says Na. Read our full coverage of all the champions of change on our list, including Q&As with each individual.

DEAL NEWS
Northern Private Capital is buying MDA from Maxar Technologies (NYSE: MAXR) for $765 million. The deal includes all of all of MDA’s Canadian businesses such as ground stations, radar satellite products, robotics, defense and satellite parts. PJT Partners, RBC Capital Markets, Bank of America Merrill Lynch, Wachtell, Lipton, Rosen & Katz and Stikeman Elliott LLP are advising Maxar.

Franchise Group Inc. (Nasdaq: FRG) is buying furniture retailer American Freight Group from the Jordan Co. for $450 million. The target sells home furniture, mattresses and accessories at discount prices. B. Riley FBR Inc. and Kayne are advising the buyer. Harris Williams is advising the sellers.

Uber Technologies Inc. (NYSE: UBER) has received approval from Egyptian regulators for its pending $3.1 billion deal for Middle Eastern ride-hailing competitor Careem Networks FZ. Egypt is the biggest region in the Middle East for ride-hailing services.

VMware Inc. (NYSE: VMW) has completed its $2.7 billion purchase of cloud software company Pivotal Software.

For recent deal announcements, see Weekly wrap: DraftKings, IAC, Thompson Street.

For more on fundraising, see PE fundraising scorecard: Incline Equity, Parthenon, SSC Partners.

DEAL TRENDS
Arizona’s $41 billion State Retirement System is looking to dedicate one out of every six dollars it manages to direct lending -- more than five times the industry average -- in a move some see as a harbinger of what’s to come for the booming asset class. Investors have plowed hundreds of billions of dollars into private-credit funds in recent years, lured by premiums that are more than five percentage points higher than competing public debt. Y et less than 3 percent of pension portfolios were dedicated to the sector as of December, according to London-based research firm Preqin. Read the full story by Bloomberg News: A $41 Billion pension fund is betting big on private credit.

FEATURED CONTENT
Mergers & Acquisitions examines the impact of 7 technologies on M&A in the retail sector. Read the whole series:

Overview: Retail Tech M&A: 7 Technologies Driving Change
Retail Tech M&A #1: Nike, McDonald's, PayPal, add customization, IoT
Retail Tech M&A #2: Why Walmart and other retailers are buying artificial intelligence startups
Retail Tech M&A #3: Amazon leads race to build fulfillment centers
Retail Tech M&A #4: Do robots fill orders faster?
Retail Tech M&A #5: Voice recognition gives retailers more ways to communicate
Retail Tech M&A #6: Data improves customer service
Retail Tech M&A #7: Demand for convenience drives growth in mobile ordering

Albertsons, Kroger Co. (NYSE: KR), Stop & Shop and Walmart (NYSE: WMT) are building automated mini-warehouses and "dark stores" to make deliveries and prepare pickup orders. Mini-warehouses are usually attached to existing stores, and in most cases, "dark stores" are completely separate. Both formats are closed off to customers, and are mostly automated. They use the assistance of robots for speed, save on labor, and get orders out faster. Kroger bought a five percent stake in robotics firm Ocado. Read our full coverage: Smart supermarkets become popular, as Kroger, Walmart add them.

It’s a milestone year for the Blackstone Group Inc. (NYSE: BX), which transitioned from a publicly traded partnership to a corporation on July 1. The New York firm announced the final close of its latest global real estate fund recently. With $20.5 billion of total capital commitments, Blackstone Real Estate Partners IX is the largest real estate fund ever raised. Mergers & Acquisitions spoke with Stephen A. Schwarzman, the firm’s co-founder, chairman and CEO. Read the full story: "Complete control" is the beauty of private equity, says Blackstone's Stephen A. Schwarzman.

The private equity model has held up very well over the decades, continuing to outperform the public markets, even as economic cycles come and go. But the rate of growth has slowed, leading PE firms to seek adjacent areas of business to expand. As PE firms face increased pressure to produce higher returns on their investments, many of them are turning to a familiar area of business: lending. Adams Street Partners, Balance Point Capital, Carlyle and VSS are all actively engaged in lending. Read the full story: Private equity firms are becoming lenders. Here’s why.

To celebrate deals, dealmakers and dealmaking firms, Mergers & Acquisitions produces three special reports every year: the M&A Mid-Market Awards; the Rising Stars of Private Equity; and the Most Influential Women in Mid-Market M&A. For more on the timeline and nomination process for each, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.

During the holiday season, Mergers & Acquisitions is covering the philanthropic and volunteer initiatives underway in the private equity industry. At Mergers & Acquisitions, we're covering the philanthropic and volunteer initiatives underway in the private equity industry. Last year, we published The Big Give, an in-depth look at how private equity firms are contributing. Efforts have continued to flourish, fueled by younger Millennials seeking to build a better future and by mature partners considering the legacy they will leave behind. Read our full coverage: Private equity gives back: Vista's Robert F. Smith, Clearlake's José E. Feliciano, Riverside employees.

EVENTS
The Annual AM&AA Winter Conference is taking place in Scottsdale, Arizona Jan. 8-10.

Deal Wave is being hosted by ACG Orange Country at the Ritz-Carlton-Laguna Niguel in Dana Point, California on Jan. 9.

ACG New York is hosting the 12th annual healthcare conference and bourbon tasting at the Metropolitan Club in New York on Feb. 27.

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