M&A wrap: TSG, NextEnergy, Tesla, GTCR, Roark, AEI

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TSG Consumer Partners has raised its eighth fund at $4 billion. The consumer-focused PE firm will make investments between $200 million and $800 million. The firm has now about $9 billion under management. TSG, founded in 1987, focuses on the food, beverage, restaurant, beauty, personal care, household, apparel and accessories, and e-commerce sectors. In 2018, TSG bought a minority stake a Dutch Bros. Coffee, the largest privately held drive-thru coffee company in the U.S. with more than 300 locations, and in that same year, TSG-backed Duckhorn Wine Co. acquired Pinot Noir winery Kosta Browne.

In other PE fundraising news, NextEnergy Capital has raised a new solar energy-focused PE fund at $160 million. The fund will invest between $5 million and $30 million in its deals. MJ Hudson advised NextEnergy.

For more on PE fundraising, see PE fundraising scorecard: Arcline, Bow River, TPG.

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.

Call for nominations
Nominations are due Feb. 8 for Mergers & Acquisitions' 12thAnnual M&A Mid-Market Awards, which will honor leading dealmakers and deals that set the standard for transactions in the middle market in 2018. CLICK HERE TO SUBMIT NOMINATIONS.

Related: Call for Nominations: 12th Annual M&A Mid-market Awards.

Deal news
Tesla Inc. (Nasdaq: TSLA) is buying energy technology company Maxwell Technologies Inc. (Nasdaq: MXWL) for around $218 million. DLA Piper and Barclays are advising Maxwell. Wilson Sonsini Goodrich & Rosati is representing Tesla.

Multifamily office TwinFocus helped its founding European client, Markerstudy Group, facilitate the £185 million ($241 million) acquisition of Co-op Insurance. The deal came shortly before TwinFocus announced the launch of formal M&A and real estate advisory services for its global ultra-high net worth client base.

GTCR has completed the acquisitions Ultimus Fund Solutions and the Gemini Cos. The combined company is called Ultimus Fund Solutions, and offers fund administration, accounting and investor sservices to traditional and alternative fund managers. Latham & Watkins and Broadhaven Capital Partners advised GTCR. Raymond James & Associates advised Gemini.

Roark Capital has acquired a majority stake in fitness club operator Fitness Connection from LNK Partners. The target operates 41 locations. Jefferies, Piper Jaffray, Kirkland & Ellis and RSM US LLP advised Fitness Connection. Paul, Weiss, Rifkind, Wharton & Garrison LLP advised Roark.

AE Industrial Partners-backed Belcan LLC has acquired engineering services and technical recruitment supplier Sitec Design Ltd. and Sitec Recruitment Ltd. Kirkland & Ellis and PwC advised AEI. Lincoln International advised Sitec's board.

One Equity Partners-backed Merfish Pipe & Supply has purchased pipe fittings distributor United Pipe & Supply.

Stellex Capital Management has acquired metal parts maker Paragon Metals.

PPC Partners-backed C.H. Guenther has bought German bakery Wback GmnH.

Eldridge Industries has acquired a majority stake in Maranon Capital, a middle-market private credit investment firm.

For more deal announcements, see The weekly wrap: Arlington, CACI, Sysco.

Featured content
Not only do carve-outs account for 10 percent of all M&A activity, the percentage of carve-outs conducted by buyout firms (as opposed to strategic buyers) is on the rise, and sharply at that. And that’s important, because, at the risk of overextending the curveball analogy, the carve-out is ‘filthy stuff.’ The inherent complexities of the deal can puzzle even serial acquirers. Write Accordion's Gary Appelbaum and Eric Salit in this guest article: Carve-out curveball: How to hit a home run.

Consumerization of healthcare, high-deductible health plans, and more self-payment by patients are contributing to the overall increased demand for PT services, write Battery Ventures general partner Chelsea Stoner in this guest article: Rising demand for physical therapy drives deals.

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.

Mergers & Acquisitions asked leading dealmakers about their outlook for the middle market in 2019. Watch the video conversations, shot at ACG Philadelphia's M&A East: It is a seller's market, and deal activity is expected to remain steady, says Ramsey Goodrich of Carter Morse & Goodrich: Outlook 2019: Great time to sell. Private equity firms and strategic buyers will use their excess cash and capital to look for deals, says Bharat Ramprasad of Stifel Nicolaus: Outlook 2019: Excess capital to fuel M&A. Rising interest rates and regulatory changes may increase volatility, cautions Mark Emrich of Murray Devine: Outlook 2019: Keep an eye on rising interest rates.

Family-owned businesses require a lot preparation to sell to PE firms, says Carls Marks Advisors' Warren Feder. Watch the video: How to prep a family biz for sale to private equity.

Tom Brady became the first quarterback in NFL history to win six Super Bowls, as the New England Patriots defeated the Los Angeles Rams 13-3 on Sunday night. Off the field, Brady recently teamed with former Giants defensive end Michael Strahan, who is the co-host of ABC’s Good Morning America, to launch a sports media startup called Religion of Sports Media. Muhsin Muhammad, who played wide receiver for the Carolina Panthers and the Chicago Bears, is a managing director of private equity firm Axum Capital Partners. Steve Young, former San Francisco 49ers quarterback, is a co-founder of private equity firm HGGC. Check out: Patriots, Rams expected to score high in Super Bowl LIII. QB Tom Brady, others, build companies.

Events
ACG Atlanta is hosting Atlanta ACG Capital Connection at the Hotel at Avalon and Alpharetta Convention Center in Atlanta from Feb. 5-7. The allows dealmakers to network with PE firms, corporate development officers and mezzanine capital funds.

The SBIA and the AM&AA are hosting a Deal Summit at The Doral in Miami from Feb. 20-22. The event offers networking opportunities with senior-level M&A adviors and lower middle-market funds.

ACG New York hosts the 11th Annual Healthcare Conference at the Metropolitan Club in New York on Feb. 28. Dealmakers network with healthcare-focused private equity firms and other industry professionals.

ACG Minnesota and Corvus North are hosting AIM: A Women's Leadership Conference at the Minneapolis Hyatt on March 7. The conference is designed to support and encourage female leaders to grow and achieve success throughout their career journeys.

ACG New York is hosting women of leadership golf event and reception on March 21 at Konnect Golf in New York. Female dealmakers from PE firms, investment banks and lenders will be able to network and discuss middle-market trends.

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