M&A wrap: Sun Capital, Regal, Euromoney, TheStreet, KKR
Sun Capital Partners is buying industrial machine parts maker Regal Beloit Corp.'s (NYSE: RBC) drive technologies business. The target designs and manufactures engineered controls, voltage starters and drives that are used in motor control systems, and is estimated to generate $131 million in revenue in 2018. “The acquired motor control solutions platform is a great fit in our portfolio, and in line with Sun Capital’s experience investing in both corporate carve-outs and industrial companies,” says Sun Capital co-CEO Marc Leder. “We see enormous potential in these businesses, and will provide the support and resources needed to grow them into a successful, stand-alone company.” The divestiture is part of Regal's strategy to focus on core businesses. Baird and Foley & Lardner are advising Regal.
Euromoney Institutional Investor, a business news provider, is buying The Deal, a financial news service, and BoardEx, a relationship mapping service of corporate directors and officers, from TheSteet Inc. (Nasdaq: TST) for $87 million. The transaction will allow TheStreet to focus on its consumer subscription business, according to the company. Moelis & Co. (NYSE: MC) and Orrick Herrington & Sutcliffe are advising TheStreet.
KKR (NYSE: KKR) has invested $75 million in Cross River Bank, a provider of banking services for financial technology companies. KKR is joined in the round by new investors, CreditEase and LionTree Partners, and by returning investors Battery Ventures, Andreessen Horowitz and Ribbit Capital.
Sagewind Capital and Berenson Holdings LLC have acquired The Athene Group, a software company that serves the wealth management industry. Insight Venture Partners and Salesforce Ventures also invested in the deal.
Salveo Capital has acquired a minority stake in cannabis company Ascend Wellness. For more on M&A in the cannabis sector, read the full guest article by Salveo's Jeffrey Howard: How to seize M&A opportunities in marijuana’s gray market.
There were 585 PE-backed healthcare deals worth around $56 billion announced through November, compared to 619 deals worth $57 billions for all of 2017, according to Preqin. In 2018, 84 healthcare-focused PE funds have raised $22 billion.
General partners that submit standardized reporting templates show IRRs 10.2 percent higher than their peers, according to eFront's report: Mind the Gap: a global survey of private equity reporting practices. North American funds are by 34 percent more conformant to template requests than European funds.
Recruiting women has become a priority at private equity firms. Within the past decade, 83 percent of private equity managers based in North America, Asia and Europe said they focused on increasing gender diversity in their front-office roles, according to new research from EY. Sixty-three percent of the firms say they want more women in middle- and back-office roles as well. Check back next month when Mergers & Acquisitions will announce the 2019 Most Influential Women in Mid-Market M&A. For last year's list, click here. And read the full story on EY's data from Bloomberg: Private equity firms say recruiting women is a top priority.
Private equity firms are giving back - organizing groceries at food pantries, mentoring students in schools, running races for cancer cures and pitching in at animal shelters. In time for the holidays, Mergers & Acquisitions highlights the philanthropic and volunteering initiatives of 5 PE firms: the Carlyle Group LP (Nasdaq: CG), Frontier Capital, Huron Capital, the Riverside Co. and Star Mountain Capital. At Carlyle, charity starts at the top, with CEO David Rubenstein's signing of The Giving Pledge, a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to philanthropy. Community involvement is more important than ever to today’s work force. Millennials, defined as people born between 1981 and 1996 by the Pew Research Center, are “for sustainability, diversity, inclusion and giving back to the community,” says Carlyle managing director Christopher Ullman. “We are finding this more and more. Yes, we are here to make money, secure retirement for pensioners, but the firm wants to support people’s efforts to make the world a better place.” Frontier Capital supports several causes, including The Miracle League, a baseball organization for people who are mentally and physically challenged. “There’s more to life than work and material things, and our people understand that,” says Frontier managing partner Andrew Lindner. At Detroit-based Huron Capital, the firm’s philanthropic efforts are focused on local groups. “We want to leave our footprint in this community where we live and work while being as helpful as possible,” says partner Gretchen Perkins. “The charitable activities we do as a group, the ability for each employee to influence where Huron’s donations go, and the ability to perform community service during work hours, or receive matching funds for an employee’s personal non-profit passion, all contribute to a portion of an employee’s sense of purpose and contributing to the greater good.” Read the full story, The Big Give.
We asked dealmakers at ACG Philadelphia's M&A East to share their thoughts on Giving Back. Check out our video interview with Baker Tilly Capital's Judit Nagy-Eichelber: Volunteer work brings teams together. Also watch our conversation with Reed Smith's Jonathan Moyer: For millennial dealmakers, giving back is part of who they are.
Holiday shopping is in full swing, and the the pressure on retailers is more intense than ever. Consumers are choosing retailers that match their values. For example, Canadian retail giant Empire Company Ltd. (TSE: EMP.A) has agreed to buy fast-growing farm-to-table grocer Farm Boy for $800 million from Boston private equity firm Berkshire Partners LLC. Farm Boy offers fresh, ready-to-eat and private label offerings are particularly appealing to urban and suburban consumers. Technology is driving many of the transactions. Best Buy Co. (NYSE: BBY) recently agreed to spend $800 million to buy GreatCall, a provider of emergency response services for seniors, from Chicago private equity firm GTCR. Meanwhile, GreatCall announced a partnership with on-demand transportation provider Lyft to make it easier for seniors to get car service. “Many of the challenges that retailers are currently facing are due more to a lack of innovation and investment in technology, and that they are not able to compete with Amazon,” said Alex Monahan, a consumer products senior analyst at tax and consulting firm RSM US LLP. “Investors want to see that retailers are adjusting to consumer’s changing preferences and striving to provide seamless multi-channel experiences, while also investing in technology to address the tight labor markets.” Amazon, Walmart, Ikea, Bed, Bath & Beyond and Farm Boy are among the retailers turning to M&A. For more, see 5 trends driving retail M&A.
The Jacksonville Jaguars take on the Tennessee Titans Thursday night. Off the field, many players build companies. Off the field, many football players invest in companies. New England Patriots quarterback Tom Brady recently teamed with former Giants defensive end Michael Strahan, who is the co-host of ABC’s Good Morning America, to launch a sports media startup called Religion of Sports Media, which has raised $3 million in venture capital funding from CourtsideVC and Advancit Capital. Muhsin Muhammad, who played wide receiver for the Carolina Panthersand the Chicago Bears, is a managing director of private equity firm Axum Capital Partners. Steve Young, former San Francisco 49ers quarterback, is a co-founder of private equity firm HGGC. View our slideshow, NFL stars Tom Brady, Michael Strahan, Steve Young go PE.
ACG New York Women of Leadership Summit brings together women in the middle-market dealmaking community for a day focused on networking and knowledge sharing on Jan. 17 at the Intercontinental Barclay Hotel. Alexa Von Tobel, chief innovation officer of Northwestern Mutual, keynotes.
Exponent Women kicks off the new year with an evening of networking on Jan. 24 at The Campbell, at New York's Grand Central Terminal. Jazz Age financier John W. Campbellconverted the space to his private office and reception hall in 1923, and it has recently been restored by design firm Ingrao Inc.
ACG Boston, ACG Connecticut, ACG New Jersey, ACG New York & ACG Philadelphia host ACG Northeast Dealmaking at the Mountain at Stowe Mountain Resort in Stowe, Vermont Jan. 27-29. The event provides a chance for middle-market M&A professionals from across the northeast to come together for two days of close knit networking, shared conversations and valuable time spent to deepen your relationships within the deal community.