M&A wrap: Temenos, Kony, Blackstone, Toyota, Pernod Ricard, Acquiline
Temenos is buying digital banking software company Kony for up to $580 million. The deal expands Temenos' U.S. presence in the financial technology sector, which the banking software provider estimates to be worth around $9 billion. "We are acquiring a digital front office product that has already been successful in the U.S. market and is connected to most third party cores," says Temenos CEO Max Chuard. "We are also adding a significant amount of exciting functionality and ease of generating customer journeys and experiences that will accelerate Temenos Infinity, providing banks in both North America and internationally with an unrivalled customer experience and omnichannel banking product." Kony's software products include: mobile banking apps, artificial intelligence, augmented reality, and wearable technologies. Some of Kony's clients have achieved a 20 percent increase in mobile deposits and a 64 percent rise in mobile credit payments, according to the target. "The power of the Temenos portfolio, combined with Kony’s digital banking applications and multi-experience development platform, will bring the industry’s most robust suite of applications for delivering service, value, and efficiencies from the digital edge to the modern core," adds Kony CEO Thomas Hogan.
Blackstone Infrastructure Partners is offering to buy out the remaining shares of Tallgrass Energy LP following a 40 percent slump since it took control of the pipeline operator earlier in 2019. Blackstone is offering $19.50 for all outstanding Class A shares, a 36 percent premium to Tuesday’s close, Tallgrass said in a statement. The take-private proposal is valued at about $3 billion, according to Bloomberg News. Blackstone’s offer is the latest example of financial players trying to privatize the slumping energy companies they control. Read the full story by Bloomberg News: Blackstone offers to take Tallgrass private.
Toyota Motor Corp. and Suzuki Motor Corp. are strengthening their relationship by taking stakes in one another, the latest alliance in an industry that’s facing sweeping changes in technology, consumer preferences and business models. Japan’s biggest automaker will acquire about 5 percent of Suzuki shares for about 96 billion yen ($907 million), while Suzuki will get a smaller holding valued at about 48 billion yen ($450 million) in Toyota. Read the full story by Bloomberg News: Toyota, Suzuki, to deepen ties.
Pernod Ricard is buying bourbon and whiskey producer Castle Brands Inc. for $223 million. "Bourbon is a key category in the U.S. which is our single most important market," says Pernod CEO Alexandre Ricard. Castle is known for its Jefferson's brand. Advisors to Pernod include: BofA Merrill Lynch and Debevoise & Plimpton LLP. Advisors to Castle include: Perella Weinberg Partners, Houlihan Lokey (NYSE: HLI) and Holland & Knight.
Slot machine operator Accel Entertainment is acquiring Grand River Jackpot, one of the first licensed video gaming terminal operators in Illinois, for $100 million. The acquisition is part of Accel's growth strategy as more states look to legalize gaming.
Acquiline Capital Partners-backed Clearhouse Partnership has acquired Brightoffice, a customer relationship management software provider to businesses. The target's technology offers sales account management, file management, calendars and webmail.
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
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.
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Prokanga is a unique recruiting firm that offers full-time and flexible recruiting services. Prokanga is managed by co-founders Jamie Cheney and Lesley Finer (pictured). Mergers & Acquisitions spoke with Finer, who has more than 10 years of recruiting for the finance industry and leads the finance practice at Prokanga. For more, see Why financial services pros need flexibility.
M&A was hopping in July, with observers predicting the third quarter will be an active one. Meanwhile, here is a table of middle-market deals that closed in July, including H&R Block Inc.s (NYSE: HRB) purchase of Wave Financial; Arsenal Capital's backing of Seal for Life; and Colony Capital Inc. (NYSE: CLNY)'s deal for Digital Bridge. Read the full story: H&R Block's purchase of Wave among deals that closed in July.
“We know that different people from different walks of life make us a better firm,” said Adam Miller, director of global talent management at the Riverside Co., which employs more than 200 people across four continents, including two female co-fund managers and a female chief operating officer. “We’re creating more opportunities for broader demographics.” Indeed, just about every private equity firm you talk to these days seems intent on becoming attractive to diverse candidates—whether it’s by hiring a chief diversity officer and loosening its dress code (KKR); giving employees flexible hours to spend more time with children (Riverside); offering up to 12 weeks of paid maternity leave and 16 weeks off altogether (ParkerGale); hosting weekly wine-and-cheese gatherings in the summer (Kinzie Capital); or providing on-site professional development and training (Riverside and ParkerGale). Check out: 5 hiring trends in private equity.
PE firms push for organizational innovation with a long-term view, and are structurally equipped to take a move fast and build things approach. Read the full guest article by Chicago Pacific Founders' Matthew Doyle: Why private equity investors are hidden innovators.
BC Partners has joined the growing group of private equity firms selling a minority stake to another PE firm to fuel expansion plans. Earlier in August, the firm, which is headquartered in London with additional offices in New York, Paris and Hamburg, announced it had sold an interest in the firm to New York’s Blackstone Alternative Asset Management for undisclosed terms. PE firms increasingly are selling minority stakes to fund expansion plans. For more see, Why private equity firms sell stakes to other firms.
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 sellers' 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.
To celebrate deals, dealmakers and dealmaking firms, Mergers & Acquisitions produces three special reports every year: the M&A Mid-Market Awards; the Rising Stars of Private Equity; and the Most Influential Women in Mid-Market M&A. For more on the timeline and nomination process for each, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.
The Association of Asian American Investment Managers (AAAIM) is holding its annual conference from Sept. 4-5 at Convene at 730 Third Avenue in New York.
The Great Lakes ACG Capital Connection is being held at the Westin Book Cadillac Detroit Hotel in Detroit from Sept. 4-6.
ACG Boston and ACG Connecticut are hosting the 5th Annual ACG New England Fall Conference at Gurney's Newport Resort & Marina in Newport, Rhode Island from Sept. 17-18.
Exponent Women is hosting a fall rooftop networking session at RSM in New York on Oct. 7.
M&A East is taking place at the Pennsylvania Convention Center in Philadelphia from Oct. 22-23.
Third Annual Women in Alternative Investments Career Forum is taking place at the New York Hilton on Nov. 8.