M&A wrap: TA Associates, Starbucks, Valor, Wind Point, Ares, Clearlake

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TA Associates has won Mergers & Acquisitions' 2018 M&A Mid-Market Award for Private Equity Firm of the Year. In 2018, TA invested a record $2.8 billion in new portfolio companies (more than double the $1.3 billion the firm invested the previous year), celebrated its 50th anniversary and completed its 500th investment. Based in Boston and Menlo Park, California, TA is currently investing out of its 12th flagship fund, which closed on a reported $5.3 billion in 2015. New investments were made in 17 companies across the globe, compared with 14 the previous year. The firm achieved $3.1 billion in liquidity through numerous exits (both full and partial), initial public offerings and recapitalizations. Internally, TA was active on the hiring front, and a significant number of staff achieved promotions. TA's Ethan Liebermann, who was promoted to director in 2018, was recently honored in Mergers & Acquisitions' 11 Rising Stars of Private Equity. Other initiatives TA launched include a strategic partnership with Athena Alliance, a non-profit organization dedicated to helping more women attain board seats.

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 TA Associates, award winners include: Nike, Fortive, the Riverside Co., Harris Williams, Luminate Capital's Hollie Haynes and more. Read our full coverage: Meet the winners of the M&A Mid-Market Awards: Nike, Fortive, TA, Harris Williams.

Related: Read more about Mergers & Acquisitions' three annual special reports, including the M&A Mid-Market Awards, the Rising Stars of Private Equity, and the Most Influential Women in Mid-Market M&A.

Deal news
Starbucks Corp. (Nasdaq: SBUX) is investing $100 million in a fund from investment firm Valor Equity Partners, Valor Siren Ventures I LP. Starbucks stated said in a release that the fund "will identify and invest in companies who are developing technologies, products, and solutions relating to food or retail." “We believe that innovative ideas are fuel for the future, and we continue to build on this heritage inside our company across beverage, experiential retail, and our digital flywheel,” says Starbucks CEO Kevin Johnson. "This new partnership with Valor presents exciting opportunities, not only for these startups, but also for Starbucks, as we build an enduring company for decades to come.” Valor is looking to raise an additional $300 million from other investors.

Wind Point Partners-backed Evans Food Group has acquired pork rinds producer Turkey Creek. Evans was represented by White & Case. Financing is being provided by BMO Harris Bank and Antares Capital.

Ares Management has bought refrigeration and HVAC services company CoolSys. Advisors to the target include: Lincoln International and Kirkland & Ellis. Ares was advised by Proskauer Rose.

Clearlake Capital-backed Gravity Oilfield Services has acquired certain water disposal infrastructure from MBI Oil & Gas LLC.

La Caisse de dépôt et placement du Québec has acquired a 27 percent stake in financial services company Hilco Global. “Hilco Global, whose role is to transition existing and often undervalued assets into profitable use, helps businesses to adopt new technologies and adjust to changing consumer habits," says Stéphane Etroy, head of private equity at CDPQ.

It took several years and multiple efforts, but Mechanics Bank finally had a chance to buy Rabobank Group’s U.S. bank. The $6 billion-asset Mechanics agreed last week to buy the $13.9 billion-asset Rabobank in from its Dutch parent for $2.1 billion. The acquisition, one of the biggest bank deals in recent years, will nearly triple Mechanics’ asset size. Read the full story: A 'transformational' merger, three years in the making.

JMP Group said it had sold a majority interest in its CLO management business, JMP Credit Advisors (JPMCA), a move designed to reduce the San Francisco-based boutique investment bank's debt and smooth out its earnings. Medalist Partners, a specialist in structured credit investments and asset-backed lending based in New York, is acquiring a 50.1 percent stake. Read the full story: JMP Group sells majority interest in CLO unit to Medalist Partners.

Featured content
The 2019 NCAA Tournament begins with 16 games played on March 21. The top four seeds are: Duke University Blue Devils (with forward Zion Williamson, pictured), the University of North Carolina Tar Heels, the University of Virginia Cavaliers and the Gonzaga University Bulldogs. This year, March Madness offers fans unprecedented access to online betting, thanks to a May 2018 U.S. Supreme Court ruling. More Americans are expected to place bets on the college basketball tournament than the Super Bowl, with the American Gaming Association's predicting that about $8.5 billion in wagers will be placed on the tournament. Online betting and data companies, including sportsbooks from DraftKings, FanDuel and Caesars, are drawing basketball fans and interest from investors.

Related: March Madness: DraftKings, FanDuel, Action Network draw fans, dealmakers.

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.

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.”

Related: 7 reasons why smart companies Amazon, Nike, Target are doing M&A.

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 investment banks in private equity-backed deals. The list is based on volume of completed PE-backed 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.

Related: Top investment banks in PE-backed deals: KPMG, Houlihan, GS, William Blair
Related: M&A soared in 2018; companies confident about dealmaking in 2019.

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
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.

Exponent Women LLC is hosting an evening of networking and conversation with leading economists at the New York office of Alliance Bernstein on April 4. Speakers include Lindsey Piegza, chief economist, Stifel Fixed Income, and Kathleen Fisher, head of wealth and investment strategies, Alliance Bernstein.

Innovation Works is holding its second annual AI/Robotics Venture Fair in Pittsburgh from on May 15 and 16.

ACG New York, ACG Boston and ACG Philadlephia are holding the Industrial Conference with Value Creation at the Infor in New York on June 6. The event is part of the Northeast Industry Tour.

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