M&A wrap: Verizon, BlueJeans Network, Coronavirus, Biofourmis, Gaido Health M&A Mid-Market Awards

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CORONAVIRUS IMPACT
Verizon Communications Inc. (NYSE: VZ) is buying video conferencing platform and Zoom rival BlueJeans Network. “As the way we work continues to change, it is absolutely critical for businesses and public sector customers to have access to a comprehensive suite of offerings that are enterprise ready, secure, frictionless and that integrate with existing tools,” says Tami Erwin, CEO of Verizon Business. “Collaboration and communications have become top of the agenda for businesses of all sizes and in all sectors in recent months." Evercore and Goodwin Procter are advising the target, and Debevoise & Plimpton is advising Verizon.

Digital therapeutics company Biofourmis is acquiring Gaido Health from Takeda Pharmaceuticals. Gaido collects information on vital signs through remote monitoring from cancer patients who have been recently discharged from the hospital. Cancer patients are usually immunocompromised and potentially more susceptible to the coronavirus, according to Biofourmis.

With the Paycheck Protection Program’s initial funds depleted, lenders are stepping up efforts to press for more money. The Small Business Administration announced Thursday morning that it had committed all of the program's $349 billion, less than two week's after the effort began. Lawmakers are debating a second round of funding that would add $250 billion to the program. Read the full story from American Banker: Hundreds of thousands of emergency small-business loan applications in limbo.

Federal Reserve Bank of Minneapolis president Neel Kashkari says that large U.S. banks should raise $200 billion from private investors and stop paying dividends so they can support the economy. Read the full story from Bloomberg News: Fed’s Neel Kashkari says banks should raise money, halt dividends.

To explore how the coronavirus is affecting the middle market, Mergers & Acquisitions interviews dealmakers from Alvarez & Marsal, Merrill Corp., M33 Growth, M-III Partners, Paul Hastings and the Riverside Co. Read our full coverage: “Brace for impact,” say private equity firms to portfolio companies about the coronavirus.

Deal structures are changing, especially in terms of what happens after a deal is completed. Read our story: How to manage post-closing disputes in M&A as a result of the coronavirus.

Covid-19 is forcing M&A practitioners to assess appropriate risk allocation mechanisms to address the impact of the virus on global business operations, including Representations and Warranties Insurance (RWI). Read the guest article: How the coronavirus forces dealmakers to assess effectiveness of RWI policies.

As consumer spending and business investment is declining, we expect a slowdown in private equity transaction volume. Read the story: Private equity deals will slow down, as global economy stalls amid coronavirus pandemic.

For more on how to cope with these challenging times, see: Coronavirus contingency planning checklist for the middle market.

DEAL NEWS
Grain management has acquired a majority stake bandwidth infrastructure provider Hunter Communications. Bank Street Group and Perkins Coie advised Hunter. Alston & Bird LLP advised Grain. CoBank ACB provided financing.

Seven Hills Capital-backed Reliable Medical Supply has partnered with A&A Medical Supply, a provider of complex rehab technology, clinical respiratory products and durable medical equipment. McGuireWoods LLP advised Seven Hills and RMS. Twin Brook Capital Partners provided financing.

PEOPLE MOVES
Joseph Lombardo has been hired by Houlihan Lokey (NYSE: HLI) as head of private equity general partner advisory. In his role, Lombardo will assist general partners with a broad range of sponsor-level strategic matters including GP minority and majority stake sales, acquisitions, joint ventures, product development, succession planning, and establishment of private and permanent capital vehicles. He was previously with Stonyrock Partners.

FEATURED CONTENT
In the challenging times we face now, it’s more important than ever to come together as a community and recognize the people and companies that excel and lead. We invite you to join us in honoring the 2019 winners of Mergers & Acquisitions’ M&A Mid-Market Awards. In contrast with the volatile coronavirus-driven conditions unfolding in 2020, the dealmaking environment of 2019 was remarkably stable. Among the PE firms benefitting from the auspicious fundraising climate was Vista Private Equity, which raised a $16 billion fund – the largest technology-focused PE fund ever raised. Mergers & Acquisitions is honoring Vista founder and CEO Robert F. Smith with our 2019 Dealmaker of the Year award. In addition to leading his firm’s unprecedented fundraising, Smith excelled in philanthropy. When he spoke at the commencement of Morehouse College, he announced he would pay off all the student loans of the HBCU’s 2019 graduates, providing a helping hand in the student debt crisis facing many U.S. families. The financial services sector saw a lot of consolidation in 2019. Piper Jaffray wins our 2019 Deal of the Year for buying Sandler O’Neill to form Piper Sandler, which instantly became a leading investment bank in the financial services sector. And Stifel wins our 2019 Investment Bank of the Year for growing dramatically and making several acquisitions. Read our full awards coverage: Meet the winners of Mergers & Acquisitions’ M&A Mid-Market Awards.

Once venture capital-backed startups themselves, today’s tech giants know a thing or two about VC seed money. It’s fitting that many of them have created corporate venture capital groups of their own. These CVCs help their owners experiment and nurture new technologies and ideas in the early stages, without requiring the commitment of an acquisition. The CVC strategy often augments a company’s research and development efforts as well as complementing its M&A strategy. Middle-market dealmakers would be wise to track the VC investments of the five companies we highlight: Amazon.com Inc. (Nasdaq: AMZN), Google (Nasdaq: GOOG), Intel (Nasdaq: INTC), Microsoft Corp. (Nasdaq: MSFT) and Salesforce.com Inc. (NYSE: CRM. Read our full coverage: Venture forth: How five of the biggest tech companies explore new territory through early-stage investments.

In a period of accelerating technology innovation and investment, it’s critical to stay aware of new technologies, offerings, data and analytics types and business models in your space, and adjacent spaces. Most companies are looking for ways to get better and earlier access to the startup space. While corporate venture capital (CVC) is only one method, it can be a fairly powerful one. Read full coverage: How corporations can benefit from VC investments in technology

Houlihan Lokey, Lincoln International, Jefferies Financial Group, William Blair and Piper Sandler Cos. rank as the top five most active M&A investment banks in 2019, based on the volume of completed private equity-backed deals in the U.S., according to PitchBook. Besides advising on M&A deals, the investment banks on the top 10 list also had a busy year with acquisitions of their own in 2019, including two acquisitions by Houlihan Lokey and three by Stifel Financial. Piper Sandler Cos., was created when Minneapolis-based Piper Jaffray Cos. acquired New York-based Sandler O’Neill & Partners in a deal representing more than half of Piper Jaffray’s $930 million market capitalization. The firm also had another acquisition in 2019 and sold a company to exit the traditional asset management business. See our full coverage: Top investment banks for PE-backed deals in 2019: Houlihan Lokey led the pack.

Audax, HarbourVest and Genstar ranked as the top three most active private equity firms in 2019, based on the volume of completed deals in the U.S., according to PitchBook. Three companies tied for fourth place: Abry, Carlyle and Shore Capital. Where were these PE firms looking for deals? Eight of the firms on our list name the software and technology sector among their top investment targets, and seven put healthcare companies on their priority list. Financial services and consumer services are each named by five of the firms as industries they focus on, with four naming business services companies. Fundraising from investors in 2019 led to two notable fund launches earlier in 2020: KKR’s Global Impact Fund and HarbourVest’s $2.6 billion HarbourVest Fund XI. See our full coverage: Top private equity firms in U.S. deals in 2019: Audax Private Equity ranked No. 1.

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 Influenital Women in Mid-Market M&A. For an overview of what we're looking for in each project, including timelines, see Special reports overview: M&A Mid-Market Awards, Rising Stars, Most Influential Women.

Editor's note: The next edition of the M&A wrap will be published on Monday, April 20th.

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