M&A wrap: TH Lee, Dun & Bradstreet, Rite Aid, Albertsons, Cerberus, private equity fundraising
Thomas H. Lee Partners, CC Capital and Cannae Holdings are buying Dun & Bradstreet (NYSE: DNB), a commercial data provider that has been around since 1841, for $6.9 billion. “Today’s announcement is the culmination of a thoughtful and comprehensive review of the value creation opportunities available to the company as part of a full portfolio and business assessment and exploration of strategic alternatives with multiple financial sponsors," says D&B CEO Thomas Manning, who will continue to lead the business after the deal closes. D&B is a marketing data and analytics provider that is designed to help businesses gain customers. Businesses are increasingly relying on data to help them make better decisions, making data providers attractive M&A targets. Some other deals include: ION Investment Group's purchase of Dealogic; Morningstar Inc.'s (Nasdaq: MORN) deal for PitchBook; Salesforce.com Inc.'s (NYSE: CRM) of Datorama; and S&P Global's (NYSE: SPGI) acquisition of Kensho Technologies. Bank of America Merrill Lynch, Citigroup Inc., RBC Capital Markets and Kirkland & Ellis are advising the buyers. J.P. Morgan and Cleary Gottlieb Steen & Hamilton LLP are advising D&B.
Private equity fundraising has slowed down in 2018, after a strong 8-year run. The amount of capital raised annually for new funds by U.S. private equity firms increased more than threefold from 2010 (when nearly $71 billion was raised) to 2017 (when $243 billion was raised). But U.S. PE firms closed only $69 billion worth of new funds during the first half of 2018, a far cry from 2017 and on pace for a six-year low, according to Pitchbook. See Mergers & Acquisitions' look at 10 PE firms that have succeeded in raising new funds recently despite the slowdown, including the Carlyle Group (Nasdaq: CG), PPC Partners, Soundcore Capital Partners and Sycamore Partners. For fundraising news on an on-going basis, see our weekly column, PE fundraising scorecard: Audax and Advent.
Rite Aid Corp. (NYSE: RAD) shares sank after the drugstore operator’s proposed merger with grocery store chain owner Albertsons Cos. was called off, leaving the company with dwindling options amid a rapid transformation of the pharmacy business, reports Bloomberg News. Rite Aid and Albertsons, backed by private-equity firm Cerberus Capital Management LP, opted to pull the plug on the deal late on Aug. 8 before a special shareholder vote that had been scheduled for Aug. 9. Prominent Rite Aid shareholders Institutional Shareholder Services Inc. and Glass Lewis & Co. were among those who opposed the deal. Concerns that were cited included the lack of a premium for Rite Aid holders and an alleged possible conflict of interest involving a Rite Aid board member’s relationship with Cerberus. The collapse of the deal represents the second time an attempt to combine with a larger retailer has failed for Rite Aid, after its proposed merger with Walgreens Boots Alliance Inc. (NAsdaq: WBA) fell apart in 2017, amid scrutiny by U.S. antitrust authorities. Rite Aid will now be forced to search for answers while its bigger rivals overhaul their business models amid wider changes in the healthcare system and deep-pocketed new competitors, including Amazon.com Inc. (Nasdaq: AMZN), push into selling prescription drugs. Amazon recently agreed to buy online pharmacy company PillPack for about $1 billion. Pharmacy giant CVS Health Corp. agreed late in 2017 to acquire health insurer Aetna Inc. (NYSE: AET) for $68 billion. Read the full story: Rite Aid-Albertsons failed merger narrows options for the drugstore.
ANI Pharmaceuticals Inc. (Nasdaq: ANIP) has acquired WellSpring Pharma Services from Sentinel Capital Partners for $18 million. WellSpring is a contract manufacturer of pharmaceutical and biotechnology services.
Emergent BioSolutions (NYSE: EBS) is buying PaxVax from Cerberus Capital Management and Ignition Growth Capital for $270 million. Paxvax is a vaccine company that focuses on treating diseases, such as typhoid fever. Perella Weinberg Partners is advising PaxVax. Dechert and Morgan Lewis & Bockius are representing PaxVax and Cerberus. Covington & Burling LLP is representing Emergent.
Hotel operator Belmond Ltd. (NYSE: BEL) has hired Goldman Sachs & Co. (NYSE: GS), J.P. Morgan Securities LLC (NYSE: JPM) and Weil, Gotshal & Manges LLP to review strategic alternatives, or seek buyers. Belmond operates 46 luxury hotels mainly under the Belmond brand, river cruises, along with the '21' Club restaurant in New York.
Junction Energy Capital and Ara Partners Group have invested in Puralube Inc., a producer of base oils that uses recycled oil as feedstock. Founding shareholder Allied Resource Corp. will keep a stake in the company. Riverside Management Group and Triple A Partners LLC advised Puralube.
Koda Enterprises Group has acquired Waterland Supply Co., a manufacturer of trailers for boats, personal watercrafts and jet skis. Sperry, Mitchell & Co. advised Waterland.
Leonard Green & Partners is buying the Shade Store, a provider of customer window treatments, from Great Hill Partners. Barclays, PricewaterhouseCoopers, and Sidley Austin are advising the sellers. Latham & Watkins is advising Leonard & Green.
Customer content marketing firm Yotpo has bought Swell Rewards, a provider of premium incentive marketing services for e-commerce brands.
Mergers & Acquisitions has announced the Rising Stars of Private Equity. These 11 up-and-coming investors are expected to play significant leadership roles in the future. Congratulations to:
Daniel Hopkin, Partner, Kainos Capital
John Kos, Principal, GTCR
Erik Latterell, Director, Stone Arch Capital
Ethan Liebermann, Principal, TA Associates
Jaime McKenzie, Director, Monomoy Capital
Jennifer Roach, Vice President, Yellow Wood Partners
Joseph Rondinelli, Principal, Frontenac
David Shainberg, Vice President, Balmoral
Tom Smithburg, Vice President, Shore Capital Partners
Nicholas Stone, Managing Director, Cyprium Partners
Afaf Ibraheem Warren, Senior Associate, Siris Capital
For profiles of the emerging leaders, see Meet Mergers & Acquisitions' 11 Rising Stars of Private Equity.
Exponent, a new group of women dealmakers, brought together 200 women from private equity funds, investment banks, entrepreneurs and advisors for the Exponent Exchange, featuring Sallie Krawcheck as the keynote speaker. Previously the CEO of Wall Streetbanks, including Merrill Lynch Wealth Management and Citi Private Bank, Krawcheck serves as the CEO of Ellevest, an online investing platform for women. Mergers & Acquisitions participated in the event as an in-kind sponsor, and editor-in-chief Mary Kathleen Flynn moderated Spotlight Panel, From Startups to Showtime: Investment Case Studies. Check out our slideshow, Exponent drew 200 women dealmakers to event featuring Sallie Krawcheck.
Summer reading list: From stories of star athletes Arnold Palmer, Keith Hernandez and Tiger Woods to advice from entrepreneurs Bridgewater Associates’ Ray Dalio, KPCB’s John Doerr, Nike’s Phil Knight and Brava Investments’ Nathalie Molina Niño, plus strategies to help business leaders in general, and female dealmakers in particular, the 15 books on Mergers & Acquisitions’ list entertain, instruct and inspire. Check out our listicle: Dealmaker’s guide to summer reading: 15 new books.