M&A wrap: Parker, Lord, West Monroe, Waterstone, Rising Stars of PE

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West Monroe Partners, a business and technology consultancy, has acquired Waterstone Management Group, an advisory firm for private equity firms and Fortune 500 companies. The deal comes at a time of heightened activity in the U.S. private investment market, where robust fundraising, strong exit markets, and attractive returns have spurred M&A activity. From 2010 to 2015, private equity’s share of M&A activity stayed steady at about 25 percent, but by 2018 it became responsible for more than one-third, according to Pitchbook. “Now more than ever, private equity firms and corporate investors are seeking partners who bring deep industry expertise along with a wide breadth of services to realize their investment thesis,” said Matt Sondag, managing director and national leader for West Monroe’s M&A practice. Founded in 2003, Waterstone has served boards and management teams of more than 100 leading technology companies, helping them grow, launch new offerings, and transform their business and operating models. The acquisition deepens West Monroe’s strategic advisory and operations improvement services to clients, with Waterstone bringing additional pre-close diligence capabilities, including commercial, market, and competitive assessments, as well as post-close value creation capabilities in growth strategy and operations. The deal expands West Monroe’s national M&A team by about 15 percent, with about half the acquired employees joining the firm’s headquarters in Chicago and the other half joining the San Francisco office, increasing the firm’s Bay Area employee count by nearly 40 percent. “West Monroe continuously evaluates opportunities to serve our clients better, and this stood out as an outstanding fit in terms of culture, leadership, and market capabilities,” said Sondag. “It immediately adds new service capabilities in growth strategy and operations improvement, as well as deepens our expertise in the software space, which currently represents one-third of our transaction volume.”

Call for nominations: Mergers & Acquisitions has opened up the nomination process for the second annual 2019 Rising Stars of Private Equity. Last year, we named 11 PE investors to the list, including Ethan Liebermann (pictured: top row, far right), who was recently promoted from principal to director of TA Associates, and Jennifer Roach Pacini (bottom row, far left), a vice president of Yellow Wood Partners. For the Rising Stars of Private Equity, we look for individuals who are full-time private equity investors and whose best days are yet to come. These are the folks you predict will one day play a key leadership role at your PE firm – or will head up their own. There is no age cutoff. As a general rule of thumb, we are looking for candidates beyond entry-level investing but before making partner. We publish the list online in July and in the July/August issue of the magazine. The deadline for nominations is end of day Thursday, May 23, 2019. Nominations will be accepted only through our online form. There is no fee.

CLICK HERE TO NOMINATE A RISING STAR OF PRIVATE EQUITY

DEAL NEWS
Parker Hannifin Corp. (NYSE:PH), a Cleveland, Ohio-based global provider of motion and control technologies, has agreed to acquire Lord Corp. for approximately $3.675 billion in cash. The transaction has been approved by the boards of each company and is subject to customary closing conditions, including receipt of applicable regulatory approvals. Headquartered in Cary, North Carolina, Lord is a privately-held company founded in 1924 offering a broad array of advanced adhesives, coatings and specialty materials as well as vibration and motion control technologies. Lord’s products are used in mission-critical applications in the aerospace, automotive and industrial markets. Lord has annual sales of approximately $1.1 billion and employs 3,100 team members across 17 manufacturing and 15 research and development facilities globally. “This strategic transaction will reinforce our stated objective to invest in attractive margin, growth businesses, such as engineered materials, that accelerate us towards top-quartile financial performance,” said Parker CEO Tom Williams. “Lord will significantly expand our materials science capabilities with complementary products, better positioning us to serve customers in growth industries and capitalize on emerging trends such as electrification and lightweighting." Lord CEO Ed Auslander commented, “With complementary business segments, coming together with Parker enables Lord to carry out our grander vision. Parker is already a large tier one supplier in many areas, allowing our business lines immediate access to growth, additional markets, applications and new customers. In addition, the two companies are very much aligned when it comes to core values, great business acumen and cultural fit.” Advisors to Parker include Barclays as financial advisor and Cravath, Swaine & Moore LLP as legal counsel. Advisors to Lord include Morgan Stanley & Co. LLC as financial advisor and Jones Day as legal counsel.

Dynamo Software, a provider of cloud software and data offerings for the alternative investment industry backed by Francisco Partners, has acquired Preqin Solutions, formerly Baxon Solutions, for undisclosed terms. Based in London, Preqin Solutions provides cloud-based software for private equity portfolio monitoring, valuation, performance analysis, and ESG impact design and measurement. The acquisition adds value across Dynamo’s existing client base of over 500 private fund managers and allocators that use Dynamo’s CRM, deal management, portfolio monitoring, and investor reporting capabilities, according to the buyer. Marlin & Associates acted as exclusive strategic and financial advisor to Preqin.

For more deal news, see our regular colulmn, Weekly wrap: Hitachi, Jacobs Engineering, MiddleGround

For news about private equity fundraising, see our weekly column, PE fundraising scorecard: Betram, Clearlake, Gryphon, Waud

FEATURED CONTENT
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.

Related: Read more about Mergers & Acquisitions' three annual special reports, including the M&A Mid-Market Awards, the Rising Stars of Private Equity, and the Most Influential Women in Mid-Market M&A.

Genstar Capital, Audax, HarbourVest ranked as the top U.S. private equity firms of 2018, based on volume of completed deals, according to PitchBook. Check out Mergers & Acquisitions' profiles of 21 firms that led the league tables. Top private equity firms: Genstar, Audax, HarbourVest and more

Also see: Top investment banks in PE-backed deals: KPMG, Houlihan, GS, William Blair.

Technology permeates dealmaking today. “Tech is, more or less, touching everything,” as the authors of The 2019 BDO Technology Outlook Survey put it. You can see the impact of tech throughout the 2018 winners of Mergers & Acquisitions’ M&A Mid-Market Awards especially: Luminate Capital Partners founder Hollie Hayne scoring Dealmaker of the Year for raising a second fund to invest in enterprise software companies; and TA Associates winning Private Equity Firm of the Year for investing a record $2.8 billion in new portfolio companies, most of which are infused with technology one way or the other.

Related: Why private equity firms still love technology
Related: 10 private equity firms share strategies for tech M&A.

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.

EVENTS
InterGrowth 2019 takes place May 6-8 at the Waldorf Astoria & Hilton Bonnet Creek in Orlando, Florida.

Innovation Works holds its second annual AI/Robotics Venture Fair in Pittsburgh May 15-16.

ACG Chicago hosts the Midwest Capital Connection, at The Marriott Downtown Magnificent Mile, May 21-22.

ACG New York, ACG Boston and ACG Philadelphia are holding the Industrial Conference with Value Creation at the Infor in New York on June 6. The event is part of the Northeast Industry Tour.

ACG Minnesota hosts the The Upper Midwest ACG Capital Connection at the Renaissance Minneapolis Hotel, The Depot, June 10-11.

ACG Boston brings together 700-plus dealmakers for DealFest Northeast and DealSource Select 2019 at the Cyclorama & The State Room, June 12-13.

Exponent Women hosts the Annual Exchange, which brings a trusted network of women dealmakers together for a focused day of robust content and networking, at Second in New York, on July 11. The Exchange provides attendees with opportunities to establish new connections, reinforce existing ones, and absorb timely and relevant knowledge from industry leaders.

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