Mergers & Acquisitions profiles the top 28 investment banks of 2018, with KPMG, Houlihan Lokey, Goldman Sachs (NYSE: GS), William Blair and Lincoln International ranking as the five most active in M&A. The list is based on volume of completed deals, with PitchBook as the data provider. It was a good year for dealmaking, with activity in the U.S. middle market exceeding $400 billion, the first year to achieve the milestone.
Consumer financial services firm Synchrony (NYSE: SYF) has acquired pet health insurance company Pets Best. The target offers health, wellness and personal care credit products that can be used to pay for a variety of healthcare expenses including veterinary care. As the cost of pet care increases, pet owners are increasingly seeking better access to care. According to Synchrony, the pet health insurance market is expected to double by 2022. The acquisition will expand Synchrony’s CareCredit platform, and will allow CareCredit to offer more payment options for veterinarians and pet owners. “More people are including pets as part of their family,” says CareCredit CEO Beto Casellas. “With Pets Best, we now have unique insight into the fast-growing pet health insurance market and can offer pet owners more choices for their pet’s care.” Advisors to Synchrony include: Guggenheim Securities and Sidley Austin. Pets Best was advised by Stoel Rives.
In Mergers & Acquisitions’ annual look at strategic buyers, we see significant deals aimed at enhancing the customer relationship, including Amazon.com Inc.’s (AMZN) purchase of PillPack, Nike Inc.’s (NYSE: NKE) acquisitions of Invertex Ltd. and Zodiac Inc. and Target Corp.s’ (NYSE: TGT) acquisition of Shipt. Technology plays a key role in many transactions. But while technology is enabling developments, it’s not an end unto itself for many corporations. Instead, strategic buyers are using innovations as a means to achieve goals. Based on analyzing hundreds of recent deals, Mergers & Acquisitions has identified seven goals corporate dealmakers hope to accomplish through M&A transactions today: Integrate data with software; improve the customer experience and relationship; expand and improve distribution; process payments more efficiently; leverage tech trends, like autonomous vehicles; make manufacturing processes more efficient; and achieve better outcomes and efficiencies in healthcare. “Strategics have been really active,” says John Neuner, managing director, Harris Williams. “They are aggressive in pursuing the assets they want, as long as it fits within their strategy. Scale is critical to them, and they have to meet consumer demands by adding new capabilities.”
Travel, expense, and invoice management software companies Certify and Chrome River are merging in a deal valued at over $1 billion. K1 Investment Management will own a majority stake in the combined company, with Bain Capital Ventures taking a minority stake. Cooley is advising Chrome River.
Wellspring Capital Management is buying Paragon Films, a manufacturer of transit packaging films, from Wind Point Partners. Advisors to the sellers include: Baird, Rothschild & Co. and Kirkland & Ellis. McDermott Will & Emery is representing Wellspring. Financing is being provided by: Antares Holdings, NXT Capital, Newstone Capital and Blackrock Kelso.
One Rock Capital Partners-backed FXI and Bain Capital Private Equity-backed Innocor, both foam product producers, are merging. The two PE firms will remain investors in the combined company. Advisors to FXI include: Jefferies and Latham & Watkins. Advisors to Innocor include: Barclays and Ropes & Gray.
Audax-backed Protective Industrial Products has acquired West Chester Protective Gear, a provider of personal protective equipment. Lincoln International advised West Chester.
One Equity Partners is acquiring Walterscheid Powertrain Group from GKN Limited. The target manufactures, distributes and services shafts, gearboxes, attachment systems, clutches and other parts for off-highway applications.
Weld North Education has bought education technology company Assessment Technology Inc.
BancorpSouth Bank has agreed to buy two banks. The $18 billion-asset company said that it will pay up to $86.7 million for Van Alstyne Financial in Texas and up to $107.5 million for Summit Financial Enterprises in Panama City, Florida. Read the full story: BancorpSouth announces acquisitions in Florida, Texas.
Fabienne Beuzit has joined Jones Day as a partner, while Elodie Fabre joined the law firm as a counsel, and Rodolphe Carriere was hired as an associate. They focus on bankruptcy and restructurings, and were previously with Weil Gotshal & Manges.
Marc Hauser was hired by Reed Smith as co-vice chair of the law firm’s cannabis team. He was previously in-house deal counsel to Sam Zell.
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.
Independent sponsors must rely on others for the capital to close deals. Having a working relationship with a PE firm provides the independent sponsor with an ally and leverage while negotiating the best deal possible. Read the full guest article by Boyne Capital Partners’ Derek McDowell: How to structure a winning PE-independent sponsor partnership.
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.
Mergers & Acquisitions has closed the nomination process for the 2018 M&A Mid-Market Awards. We look forward to announcing the winners in March. The Awards are one of three special reports we produce each year to celebrate deals, dealmakers and dealmaking firms. The other two are The Rising Stars of Private Equity and The Most Influential Women in Mid-Market M&A.
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 Philadelphia is hosting its 2nd annual Industry Tour focused on SaaS & Tech-Enabled Services on March 12 at the Union League of Philadelphia. Last year’s event brought together 200 PE investors, investment bankers, operating companies and industry advisors from around the country.
The Women’s Private Equity Summit will be held at the Monarch Beach Resort in Dana Point, California, March 13-15. The Summit will bring together more than 550 female professionals in private equity and venture capital.
The ACG Chicago Women’s Network is hosting a lunchtime conversation with Dorri McWhorter, the CEO of YWCA Metropolitan Chicago, on March 19 at the University Club in Chicago.
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.