M&A wrap: TA, GTCR, Sterling Partners, Clearlake, Francisco Partners, Bregal Sagemount

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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

A stretch of initial public offerings surging in their debuts grew more dramatic at the end of June, with a pair of record-breaking pops from the health sector that included the best start of any 2019 new offering: Bridgebio Pharma Inc. (Nasdaq: BBIO) opened 80 percent above its IPO price, the biggest opening gain by any biotech or pharma public debut this year, according to Bloomberg News. Adaptive Biotechnologies Corp. (Nasdaq: ADPT) opened even higher. Shares traded at nearly double their IPO price, surpassing CrowdStrike Holdings Inc. (Nasdaq: CRWD), to become the year’s biggest pop from any sector. A dam of pent-up venture capital-backed initial public offerings seemed to burst in the second quarter, with 62 U.S. IPOs—the highest quarterly count in four years — raising $25 billion—the highest quarterly amount in five years, according to Renaissance Capital. Now, VC investors are watching to see if the stock market returns from the 2019 crop of IPOs — including Uber (NYSE: UBER), Lyft (Nasdaq: LYFT) and Slack (NYSE: WORK) — justify the hype. For more on the wave of successful VC-backed IPOs, see Venture capital’s rising tide: ADPT, BBIO, BYND, CRWD, PINS, WORK, ZM.

DEAL NEWS
Francisco Partners has completed its investment in Clearlake Capital-backed Perforce Software. Perforce is an enterprise software provider to technology developers and development operations teams, and is known for its automated mobile, web testing, developer collaboration and code analysis tools. Some of Francisco's other recent investments include: portfolio company Dynamo Software buying Preqin Solutions; taking a majority stake in PayScale; and acquiring EG.

Bregal Sagemount has invested in software company Buyers Edge Platform. The target offers group purchasing and data analytics to the food service sector. Financing was provided by Goldman Sachs Specialty Lending Group and AB Private Credit Investors.

ATL Partners and British Columbia Investment Management Corp. have acquired a stake in Valence Surface Technologies. The latter offers finishing services, including painting and spray coating, to the aerospace and defense sector. The target was advised by Lazard. The legal advisor to ATL is Gibson, Dunn & Crutcher LLP. Financing was provided by Antares and Owl Rock Corp.

Ardian Infrastructure has purchased a stake in Hill Top Energy Sector, located in Green County, Pennsylvania, from Ares Management Corp. (NYSE: ARES).

HBM Holdings-backed lime products supplier Mississippi Lime Co. has acquired Calera from Covia (NYSE: CVIA).

Pamplona Capital Management has acquired a majority stake in Infiana Group GmbH, a maker of polyolefin films, from Deutsche Beteiligungs AG.

For more deal announcements, see Weekly wrap: Brookfield, Kohlberg, Performance Food.

For more fundraising news, see PE fundraising scorecard: Dominus, Flexpoint, Insight Partners, Sands.

PEOPLE MOVES
John Curry was hired by private equity firm Wilsquare Capital as vice president. He was most recently with Baird.

Mario Duron has joined private equity firm NCK Capital as an operations analyst. He previously evaluated acquisitions for Daseke Inc.

Amelia Charamba has been named to lead the global finance practice at law firm Nixon Peabody. Charamba advises financial institutions who provide fiduciary and agency services to the capital markets.

Michael Ringler was hired by law firm Skadden Arps, Slate, Meagher & Flom LLP as a partner, where he is focusing on M&A.

Sarah Stasny was hired by law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP as a partner, where she is focusing on private equity and 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.

Before you can build and manage a diverse team, you must have a proper pool of candidates to select from within a firm. This does not happen without law or financial services firms being fully committed to the goals of diversity and inclusion. Diversity is not limited to the hiring process; it also involves hands-on initiatives through training and development. Success in the professional services business requires doing excellent work for the firm’s best clients. Accordingly, the best way to promote any young colleague is to staff them on important projects. For more, see How to build gender diversity into deal teams, a guest article by Kate Day and Lytch Gutmann, partners, Bracewell LLP.

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.

In today’s accelerated private equity environment, the urgency for the PE deal team to begin creating value and delivering results in line with the investment thesis begins on day one. That said, few fund sponsors have a defined process for identifying and addressing the leadership requirements that could undermine the value creation trajectory. Read the full article by Summit Leadership Partners' Dan Hawkins and Todd Fryling: Six steps to develop a post-close talent playbook.

The private equity industry has shifted focus from financial optimization to operational improvement, but with the latter already well-explored, where do we go from here? Firms that want to stand out must look to other areas of portco businesses to create value, and no aspect is riper for innovation than human capital. Read the full article by Alpine Investors' Graham Weaver: Focus on the human factor to drive value creation, urges Alpine.

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.

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
Exponent Women hosts the Annual Exchange, which brings a trusted network of women dealmakers together for a focused day of robust content and networking, at Second in New York, on July 11. The Exchange provides attendees with opportunities to establish new connections, reinforce existing ones and absorb timely and relevant knowledge from industry leaders.

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.

M&A East takes place at the Pennsylvania Convention Center in Philadelphia from Oct. 21-23.

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