M&A wrap: TA, Riverside, Harris Williams, Daimler, Action Network

2019mawawardspastwinners
Set of golden trophies. Isolated on white background

As March goes out like a lamb, we're continuing to honor the winners of Mergers & Acquisitions’ 12th Annual M&A Mid-Market Awards. Our awards honor the leading dealmakers and deals that set the standard for transactions in the middle market. If you haven't already, say congratulations to the 2018 winners:

Deal of the Year: Fortive Corp.’s $775 million acquisition of construction software developer Gordian from Warburg Pincus LLC was a transformative deal for the buyer and for the construction industry as a whole.

Dealmaker of the Year: Hollie Haynes raised Luminate Capital Partners’ second fund with $425 million of capital, securing the technology-focused private equity firm’s position as a consummate investor in middle-market enterprise software companies.

Private Equity Firm of the Year: TA Associates invested a record $2.8 billion in new portfolio companies (more than double the previous year). The firm also celebrated its 50th anniversary, and completed its 500th investment.

Private Equity Seller of the Year: The Riverside Co. completed 16 exits, made 60 investments, and delivered a record fundraising year, as the firm marked its 30th anniversary.

Strategic Buyer of the Year: Nike Inc. (NYSE: NKE) bought Zodiac Inc. and Invertex Ltd., bringing aboard “world-class data-science talent and best-in-class tools to power 1:1 relationships with consumers through digital and physical consumer experiences.”

Investment Bank of the Year: Harris Williams completed 87 transactions in 2018, the most in the firm’s history.

Lender of the Year: Monroe Capital grew AUM by $1.8 billion, or 35 percent, over the previous year, bringing the total to $7 billion.

Law Firm of the Year: Goodwin grew by double digits across key financial metrics, marking the firm’s sixth consecutive year of record revenue and profits, with technology-rich practice areas driving growth.

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
Daimler AG’s subsidiary Daimler Trucks and Buses Holding Inc. is acquiring a majority stake in Torc Robotics, a pioneer in autonomous driving, for undisclosed terms. “Bringing Torc Robotics within the Daimler Trucks family creates a unique and powerful team of innovators to put highly automated trucks on the road," said Martin Daum, member of the board of management, Daimler AG, responsible for Trucks and Buses. "Daimler Trucks and Torc Robotics complement each other perfectly in terms of resources, expertise, and skill sets. We are forming the ideal combination between Torc’s expertise on agile software development and our experience in delivering reliable and safe truck hardware. Together, we will provide a sustainable way for our customers to meet the ever-growing freight demand and benefit both the economy and society." Hughes Hubbard advised Daimler in the transaction.

Worley Claims Services, a provider of insurance claims services in North America, is acquiring Alacrity Renovation Services LLC from Lowe’s Companies Inc. (NYSE: LOW), for undisclosed terms. “Alacrity’s ability to manage complex projects with a keen focus on customer satisfaction has set the standard in the growing managed repair sector,” said Jim Pearl, CEO of Worley. “This acquisition expands Worley’s position as one of the largest providers of managed repair services in the property insurance market and aligns with our long-term strategy to continue making investments and strategic partnerships that will allow us to be a more comprehensive service provider capable of meeting the needs of our clients throughout the claim lifecycle.”

Centre Partners, a middle market private equity firm with offices in New York and Los Angeles, is acquiring a majority interest in New England Fitness and affiliates, now doing business as One World Fitness PFF LLC, an owner and operator of fitness clubs under the Planet Fitness banner, for undisclosed terms. The company’s founder, Bill Fidler, and other key members of management invested alongside Centre. Marks & Klein LLP provided legal counsel to One World Fitness, and Dechert LLP provided legal counsel to Centre.

Aquicore, a commercial real estate software company with an all-in-one operations platform, is buying Entic, a developer of prescriptive analytics software that generates targeted recommendations to drive peak utilities and facilities performance for commercial assets. With the acquisition, Aquicore aims to consolidate the fragmented proptech market in commercial real estate operations and performance optimization. The joint company is backed by top institutional investors in real estate technology, including The Blackstone Group, ClearSky, Navitas Capital, Normandy Real Estate Partners and Fifth Wall Ventures.

The Carlyle Group (NASDAQ: CG) has agreed to invest in Tokiwa Corp., a Japanese cosmetics company engaging in the research, development and manufacturing of cosmetic products, through a strategic business and capital alliance. Equity for the transaction comes from Carlyle Japan Partners III LP, Carlyle‘s third buyout fund in Japan. As one of the first global players to enter the Japanese market, Carlyle has engaged in investment activities in Japan since 2000, with 25 investments. Mitsubishi UFJ Morgan Stanley Securities Co. Ltd. is acting as exclusive financial advisor to Carlyle, while Nishimura & Asahi is acting as legal advisor.

One Rock Capital Partners LLC has completed the previously announced acquisition of Nexeo Plastics, the plastics distribution business of Nexeo Solutions Inc., a subsidiary of Univar Inc.

Chicago private equity firm Madison Dearborn Partners LLC has made a strategic growth investment in education technology provider Lightspeed Systems.

Thermo Fisher Scientific is acquiring Brammer Bio from Ampersand, for $1.7 billion. Vista Equity Partners snatches up PlanSource. Metrolube buys Valvoline. Read our Friday column, The weekly wrap: Thermo Fisher, Vista, Valvoline.

Private equity firms, including Blackstone (NYSE:BX) are currently raising capital, according to SEC filings. Read our weekly column, PE fundraising scorecard: Aegis, AIP, Blackstone, First Reserve, SSP.

Featured content
All eyes will be on Zion Williamson Friday night as No. 1 overall seed Duke University takes on Virginia Tech for the NCAA Tournament to move into the Elite Eight. 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. M&A is rampant throughout the sector. Here's a look at recent online gaming and sports data deals.

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

The way consumers shop continues to change. Customers want to put their own touch on products, not wait too long for them and in most cases, never step foot in a store to buy them. Apparel and sneaker retailers, such as Nike Inc. (NYSE: NKE), the winner of Mergers & Acquisitions' 2018 Mid-Market Award for Strategic Buyer of the Year, and Foot Locker (NYSE: FL) and Nike Inc. (NYSE: NKE), are embracing these challenges by snatching up companies that help provide customized products to customers. Read the full story: Sports retailers Nike, Foot Locker buy digital startups to help customize sneakers.

What’s driving adaptive reuse, and how can private equity tap into this increasingly common but misunderstood and under-analyzed property segment? Adaptive reuse, which involves repurposing a building designed originally for something else, is fast becoming a global phenomenon; from turn-of-the-century warehouses to castles to train stations, developers and investors have untapped enormous value from obsolete building stock.

Related: Why private equity investors should consider adaptive reuse.

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
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.

InterGrowth 2019 is taking place from May 6-8 at the Waldorf Astoria & Hilton Bonnet Creek in Orlando, Florida.

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

ACG Chicago is hosting the Midwest Capital Connection at The Marriott Downtown Magnificent Mile from May 21-22.

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.

ACG Minnesota is hosting the The Upper Midwest ACG Capital Connection at the Renaissance Minneapolis Hotel, The Depot from June 10-11.

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