M&A wrap: TA, Clearlake, Toigo, SKW, Bain, Carlyle, Bregal, Summit

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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 (pictured)
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

As the private equity industry matures, many firm leaders are thinking about their legacies and focusing on philanthropy. Clearlake Capital co-founder José E. Feliciano is donating $500,000 to the Toigo Foundation, a non-profit organization that supports education and diversity in financial leadership. Toigo was formed in 1989, and works with more than 250 organizations that are committed to inclusion. “Toigo has had a significant impact in my career trajectory and in the careers of many others," says Feliciano. "This donation will serve to accelerate and expand those efforts to reach a larger group of talented individuals that can benefit from the organization’s leadership skills training as well as Toigo’s unparalleled mentor and alumni network." Feliciano is making the donation through the Kwanza Jones & José E. Feliciano Supercharged Initiative, which is also donating $1 million to Bennett College, a women's historically black college or university, or HCBU, in Greensboro, North Carolina. Related: The Big Give. Mergers & Acquisitions highlights the philanthropy and volunteering initiatives of 5 PE firms: the Carlyle Group LP (Nasdaq: CG), Frontier Capital, Huron Capital, the Riverside Co. and Star Mountain Capital. (For more on diversity in the middle market, see below.)

NEWS: DEALS, PEOPLE
Private lending and distressed debt firm SKW Funding, and Bain Capital Credit, have a formed a joint venture to target sub and non-performing notes. The JV will seek $500 million of acquisitions over the next two and a half years. The joint venture recently acquired a $27 million portfolio of four non-performing notes secured by 652 garden-style apartment units in San Antonio, Texas.

The Carlyle Group (Nasdaq: CG) and Vico Infrastructure Co. have formed a partnership to invest in water infrastructure projects across the U.S. The two firms will acquire and develop water, wastewater and water reuse facilities.

Equistone Partners Europe Ltd. has agreed to purchase Moody's Analytics Knowledge Services from Moody's Corp. (NYSE: MCO). The target offers research, analytics and automation technology to the financial services sector.

Gryphon Investors-backed Cora Health Services has acquired Orthopedic and Sports Therapy Institute. The target operates six clinics in the Midwest.

Genstar Capital-backed backed Mercer Global Advisors has bought Physicians Financial Advisors in Newport Beach, California.

The Middleby Corp. (Nasdaq: MIDD) has acquired Packaging Progressions, a maker of automated packaging technology for the food and beverage sector.

For more deal news, see Weekly wrap: Cisco, Piper Jaffray, Transom.

For more on PE fundraising, see PE fundraising scorecard: Accel-KKR, Apax, New Heritage, Summit Partners.

Former GE (NYSE: GE) CEO John Flannery has joined middle-market PE firm Charlesbank Capital Partners as an advisory director. He will work on evaluating new investment opportunities as well as growing equity value in the PE firm's portfolio.

Kyle Rasbach has been promoted to managing partner at Pappas Ventures, the venture capital arm of Pappas Capital. In addition, Matthew Boyer has been named CFO at the same firm.

DIVERSITY IN DEALMAKING
Gender-diverse PE investment committees outperformed all-male investment committees substantially, finds a recent study by Oliver Gottschalg, a professor at HEC Paris. The results are compelling: Gender-diverse PE investment committees outperformed all-male investment committees substantially, as measured by several metrics: 7 percent more alpha; .52x more total value to paid-in multiple; and 12 percent higher internal rate of return. Also impressive: the failure rate of gender-diverse investment committees was 8 percent lower. The findings provide concrete evidence showing the value of including women on deal teams and may help to convince skeptics. Women still hold just 9.4 percent of senior positions at PE firms globally, the report found, indicating the industry still has a long way to go before reaping the benefits of gender diversity. The low representation underscores the importance of projects that feature successful female dealmakers, such as Mergers & Acquisitions' Most Influential Women in Mid-Market M&A. Networking groups, such as Exponent Women, play a crucial role in developing communities for women dealmakers. The New York group hosted its second annual Exponent Exchange on July 11 at Second in New York. The event last year brought together 200 women.

A new payment company is attacking the hurdles professional women face when returning to the workforce after time away, a distinct problem borne out of the broader gender gap in financial services. “This is an economic problem, where you have something like a parent who left the workforce and then could not get back in,” said Samantha Ettus, founder and CEO of Park Place Payments. Read the full story: Behind a payment startup's battle to bridge the gender gap.

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.

FEATURED CONTENT
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.

EVENTS
InIVest 2019 is being held from July 16-17 at the New York Marriott Marquis. The event brings together more than 1,500 executives from the wealth management industry.

The Women's Connection Golf Clinic & Networking event takes place on July 17 at the Granite Links Golf Club in Quincy, Massachussets. The event is being hosted by ACG Boston.

ACG Seattle hosts the Northwest Middle Market Growth Conference at the Fairmont Olympic Hotel in Seattle on July 25.

ACG New York's summer dealmaking conference takes place at Gurney's Star Island Resort & Marina in Montauk, NY, July 31-Aug.1.

The Great Lakes ACG Capital Connection is being held at the Westin Book Cadillac Detroit Hotel in Detroit from Sept. 4-6.

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