M&A wrap: Dr. Scholl's, Bayer, Yellow Wood, TA, Trilantic, Arsenal Capital, Huron Capital
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
"We don’t have a fixed timeframe for a sale," says the Stephens Group managing director Aaron Clark. "We just pursue a strategy that can add value and help businesses mature." Mergers & Acquisitions recently spoke with Clark and managing director Clay Hunter to explore the firm’s investment strategy. The Little Rock, Arkansas firm bought Sound Seal, a maker of noise control products, earlier in 2019. Read the full story: Investing for the long term: Q&A with the Stephens Group family office.
New York private equity firm Trilantic North America has closed its sixth fund after raising $2.75 billion in investor commitments. The new fund, Trilantic Capital Partners VI (North America) L.P., and its parallel funds are focusing on the business services, consumer and energy sectors. Trilantic North America is already investing from the new fund, including backing Sunbelt Transformer, Planet Fitness franchisor Taymax and DJR Energy. Trilantic has been busy lately, including the recent sale of Home Franchise Concepts.
Yellow Wood Partners private equity firm is buying the Dr. Scholl’s foot-care business from German pharmaceutical giant Bayer AG for $585 million in a deal expected to close in the fourth quarter. Boston-based Yellow Wood plans to create a standalone platform company to build the Dr. Scholl’s brand, says Dana Schmaltz, Yellow Wood partner. Citi (NYSE:C), Sawaya Partners and Covington & Burling advised Bayer on the transaction; Fried Frank advised Yellow Wood.
Arsenal Capital Partners, the New York private equity firm, is buying the healthcare packaging business of Clariant International Ltd., a specialty chemical company, for 308 million Swiss Francs ($314 million). The deal is expected to close in the fourth quarter.
Sciens Building Solutions, a fire service company owned by Detroit middle market private equity firm Huron Capital, has acquired Critical System Solutions, a provider life safety products. Sciens previously acquired Empire Electric Maintenance and Service and Empire Fire Safety.
PPG Industries Inc. (NYSE: PPG) is buying Dexmet Corp. from Sverica Capital Management LP, the Boston-based lower-middle-market firm. Dexmet sells expanded metal materials used for lightning strike protection and power storage technology.
Smart Communications, a cloud-based platform for enterprise customer communications headquartered in London and New York, has acquired Intelledox, a global software company. Dallas-based Intelledox provides forms, workflow and on-demand customer communications.
For more deal news, see Weekly wrap: Blackstone, EagleTree, Hillenbrand.
For more fundraising news, see PE fundraising scorecard: AEA, Ares, Hamilton Lane, Platinum Equity.
Seth Friedman, previously of GB Capital, RLJ Credit Management and Perseus Mezzanine Partners, has been hired by New York-based Abacus Finance Group LLC as a managing director. Abacus has also hired Austin Rendell and Jacob Wise as analysts and promoted Eric Petersen to director.
Mike Houston of Michigan-based Lambert IR investor relations agency has been elevated to managing director and practice chair of the New York City-based investor relations and financial communications unit.
Adam Smith has joined Maine Pointe, a global supply chain and operations consulting firm headquartered in Boston, as vice president, industry partner in the family office sector.
DIVERSITY IN DEALMAKING
Women hold just 9.4 percent of senior positions at PE firms globally, according to a recent study by HEC Paris. 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. The special report profiles 36 women M&A pros and includes interviews with them.
“There is this idea in sociology: You've got to see it to be it,” said NBC News correspondent Stephanie Rhule about the importance of building communities of women in the financial services sector, where they are woefully underrepresented. Rhule spoke at the second annual Exponent Exchange, hosted by Exponent Women, a group devoted to nurturing the financial services careers of its female members. Read the full story: Exponent Exchange brings together 200 women dealmakers for second annual event.
Gender-diverse PE investment committees outperformed all-male investment committees substantially, finds a recent study by HEC Paris professor Oliver Gottschalg. 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. For more, read Why private equity firms should include more women on deal teams.
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.
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.
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.