M&A wrap: Vista, Clearlake, Riverside, Silver Lake, Manchester City, Amazon, Kroger, Walmart
Thanksgiving kicks off the holiday season, a time of year when many people strive to contribute to their communities. At Mergers & Acquisitions, we're covering the philanthropic and volunteer initiatives underway in the private equity industry. Last year, we published The Big Give, an in-depth look at how private equity firms are contributing. Efforts have continued to flourish, fueled by younger Millennials seeking to build a better future and by mature partners considering the legacy they will leave behind. Many top PE investors are focusing on philanthropy. One recent example is Robert F. Smith. The founder, chairman and CEO of Vista Equity Partners is contributing $34 million to Morehouse College, an Atlanta-based historically black college or university, or HBCU. Among Morehouse alumni are: civil rights leader Martin Luther King Jr.; former Atlanta mayor Maynard Jackson; and filmmaker Shelton “Spike” Lee. Smith and his family are donating to the new Morehouse College Student Success Program to pay off the loans that students and parents of the Class of 2019 accumulated to fund a Morehouse education. He announced the gift in May, when he received an honorary doctorate from Morehouse. The gift is designed to ease the financial strain on the Class of 2019. More than 400 students, parents, and guardians are expected to benefit. In another recent gift, Clearlake Capital co-founder José E. Feliciano is donating $500,000 to the Toigo Foundation, a non-profit organization that supports education and diversity in financial leadership. Toigo was formed in 1989, and works with more than 250 organizations that are committed to inclusion. Check out our full coverage: Private equity gives back: Vista's Robert F. Smith, Clearlake's José E. Feliciano, Riverside employees.
Editor's Note: Due to the Thanksgiving holiday, Mergers & Acquisitions' M&A wrap column and Daily Briefing newsletter will be suspended until Monday, December 2.
RETAIL TECH M&A
Supermarkets are no longer just places for consumers to do their food shopping in person. Supermarkets are testing and rolling out smart warehouses, which use robots to fill online orders and deliver them. The robots and smart warehouses sectors are seeing a pickup in deal activity. Albertsons, Kroger Co. (NYSE: KR), Stop & Shop and Walmart (NYSE: WMT) are building automated mini-warehouses and "dark stores" to make deliveries and prepare pickup orders. Mini-warehouses are usually attached to existing stores, and in most cases, "dark stores" are completely separate. Both formats are closed off to customers, and are mostly automated. They use the assistance of robots for speed, save on labor, and get orders out faster. Kroger bought a five percent stake in robotics firm Ocado. Read our full coverage: Smart supermarkets become popular, as Kroger, Walmart add them.
As the retail industry's busiest season begins, Mergers & Acquisitions is covering many M&A trends in the sector. We've launched a weekly series on the 7 technologies retailers are investing in: The Internet of Things enables enhanced personalization, such as custom drive-thru menus. Artificial intelligence Modern data centers and warehouses fill orders quickly. Robots assist with sorting and packing consumer goods. Voice- and text-assisted technology provides customers with hands-free shopping experiences. Analytics give retailers a better understanding of consumer behavior and habits. Mobile payment processing provides consumers with on-the-go convenience.
Online retailers, including Walmart Inc. (NYSE: WMT), are adding more fulfillment centers to meet consumer demands for faster shipping times. The owners of these properties along with the contractors that build them are becoming prime M&A targets. “It is no secret that e-commerce continues to enhance the attractiveness of high-quality and well-located warehouse and distribution properties,’’ notes Nicole Stagnaro, head of opportunistic and platform transactions at real estate investment firm Stockbridge Capital Group. For more see, Amazon and Walmart open more logistics centers, driving warehouse M&A.
MORE DEAL NEWS
Silver Lake’s expensive foray into British soccer reflects the soaring value of live matches in the streaming era and the potential for new apps to cash in on the global following of teams like Manchester City.The private equity firm is buying just over 10 percent of Manchester City owner City Football Group Ltd. for around $500 million, valuing the group controlled by Abu Dhabi’s royal family at $4.8 billion. That’s one of the highest-ever price tags for a professional sports organization. Read the full story Bloomberg News: Silver Lake bets on British soccer.
Curtiss-Wright Corp. (NYSE: CW) is acquiring 901D Holdings LLC, a maker of electronic systems for the U.S. Navy, for $132 million. Reed Smith is representing Curtiss Wright.
Shinhan Investment Corp., Samtan Co., EIP Investment Co. and KDB Kiamco have acquired a 50 percent stake in Utopia Pipeline from Riverstone Holdings.
Brien Wassner has joined law firm Sidley Austin as a partner, where he is focusing on private equity and M&A. He was most recently with Sherman & Sterling LLP.
Esteemed M&A attorney Martin (“Marty”) Lipton was honored at a black-tie event hosted by the Institute of International Education at The Pierre in New York on Oct. 30. Called the “the king of M&A,” the co-founder of New York law firm Wachtell, Lipton, Rosen & Katz, is well known to dealmakers as the architect of the anti-takeover defense strategy known as the “poison pill.” Lipton was awarded the IIE Stephen P. Duggan Award for Mutual Understanding “in recognition of his lifetime of extraordinary achievement and his lasting contribution to international higher education. Read the full story: Martin Lipton, inventor of the “poison pill” anti-takeover defense honored by IIE.
It’s a milestone year for the Blackstone Group Inc. (NYSE: BX), which transitioned from a publicly traded partnership to a corporation on July 1. The New York firm announced the final close of its latest global real estate fund recently. With $20.5 billion of total capital commitments, Blackstone Real Estate Partners IX is the largest real estate fund ever raised. Mergers & Acquisitions spoke with Stephen A. Schwarzman, the firm’s co-founder, chairman and CEO. Read the full story: "Complete control" is the beauty of private equity, says Blackstone's Stephen A. Schwarzman.
The private equity model has held up very well over the decades, continuing to outperform the public markets, even as economic cycles come and go. But the rate of growth has slowed, leading PE firms to seek adjacent areas of business to expand. As PE firms face increased pressure to produce higher returns on their investments, many of them are turning to a familiar area of business: lending. Adams Street Partners, Balance Point Capital, Carlyle and VSS are all actively engaged in lending. Read the full story: Private equity firms are becoming lenders. Here’s why.
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.
Looking for a glimpse of what’s to come in the private equity industry? Meet Mergers & Acquisitions' 2019 Rising Stars of Private Equity. As the PE industry undergoes a generational shift, and many firm founders retire, it’s well worth getting to know these emerging leaders, including Branford's Austin Collier, Sterling Partners' Shawn Domanic and Summit Partners' Sophia Popova. 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.
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.
CB Insights hosts The Collective, featuring 30-plus fireside chats, at New World Stages Dec. 10-11. Mergers & Acquisitions editor-in-chief Mary Kathleen Flynn is slated to interview Lance Barton, head of corporate development for dating site developer Match Group.
The Annual AM&AA Winter Conference is taking place in Scottsdale, Arizon fron Jan. 8-10.
Deal Wave is being hosted by ACG Orange Country at the Ritz-Carlton-Laguna Niguel in Dana Point, California on Jan. 9.