M&A wrap: Yellow Wood, Paris Presents, Freeman Beauty, the Riverside Co., Apollo

Paris Presents

Consumer-focused private equity firm Yellow Wood Partners is buying Paris Presents Inc., a provider of branded cosmetic and bath accessories, from EagleTree Capital and its co-investors. Yellow Wood will merge the target with portfolio company Freeman Beauty. Founded in 1947, Paris Presents creates and distributes beauty products and personal care accessories to mass merchants, drug stores, specialty beauty stores, and online retailers. The company produces its products under the Real Techniques, Body Benefits by Body Image, and EcoTools brands. "Paris Presents’ superior quality branded beauty accessory products dovetail well with Freeman Beauty’s industry leading face masks as both companies share the same Millennial, Gen Z, and Multicultural consumers," says Yellow Wood founding partner Dana Schmaltz. "The combined organization will enhance the strong partnerships that both Paris Presents and Freeman have with their retail and ecommerce partners leading to future growth." Yellow Wood vice president Jennifer Roach Pacini, recently named one of Mergers Acquisitions' 11 Rising Stars of Private Equity, worked on due diligence, structuring and financing for the deal. Fried, Frank, Harris, Shriver & Jacobson LLP represented Yellow Wood on the transaction.

The Riverside Co. has closed its fifth micro-cap fund at $1.2 billion. Riverside's micro-cap business has invested in more than 55 platforms and 75 add-ons since 2005 and has exited more than 30 platforms, including Tate’s Bake Shop in 2018. “Our approach to the middle market has been consistent for the past 30 years, and RMCF V is a perfect example of that,” says Co-CEO Bèla Szigethy.

The energy industry is teeming with M&A activity, as companies seek to improve operations. Hubbell and Ingersoll Rand are among the strategic buyers. Private equity firms acquiring include AE Industrial Partners, Clayton, Dubilier & Rice and Genstar Capital. Companies in the energy industry are focused on improving operational efficiencies and analytical capabilities. The issues are urgent for oil and gas companies, because depressed prices mean profits are hard to come by, says Caroline Blitzer Phillips, who advises clients on energy deals as a partner at law firm Vinson & Elkins. They are also essential for renewable energy, which “has been quite expensive in some cases, because the infrastructure is not in place.” From providers of “smart grids” to developers of energy management software, Mergers & Acquisitions looks at recently acquired targets. Read the full story: 14 smart energy deals.

Deal news
Apollo Global Management LLC (NYSE: APO), the investment firm led by Leon Black, agreed to acquire Aspen Insurance Holdings Ltd. for $2.6 billion, in the latest example of private equity investors expanding their insurance assets. The private-equity firm joins rivals such as Carlyle Group LP (Nasdaq: CG) and Blackstone Group LP (NYSE: BX) in building insurance assets to gain access to premium income, betting that they can generate higher returns. Apollo is pushing its annuity seller Athene Holding Ltd. into Europe while increasing its stake in reinsurer Catalina Holdings Bermuda Ltd. Sidley Austin LLP is advising Apollo. Read the full story: Apollo buys Aspen in insurance expansion.

Carlyle Global Partners, Carlyle Group's long-duration private equity fund, is buying Crestview’s remaining stake in NEP. Carlyle invested in NEP alongside Crestview and management in June 2016. NEP provides technical resources to help clients make, manage and show their content. J.P. Morgan Securities LLC, Barclays and Patricof, and Jones Day are advising NEP. Paul, Weiss, Rifkind, Wharton & Garrison LLP is representing Crestview. Berenson & Co. and Debevoise & Plimpton LLP are advising Carlyle.

Wright Medical Group N.V. (NASDAQ:WMGI) is acquiring Cartiva Inc., a private orthopedic medical device company focused on treatment of osteoarthritis of the great toe, for $435 million. J.P. Morgan Securities LLC, Bass, Berry & Sims PLC and Ropes & Gray LLP, are advising Wright. Guggenheim Securities and Villeneuve Franklin & Hachigian LLP are advising Cartiva.

Polycor Inc. has acquired of four limestone quarries located in Burgundy, France, previously belonging to Rocamat. The acquisition furthers Polycor’s global presence as the company aims to expand its scope of activities and line of products from one continent to another.

Summit Partners, has purchased acquisition of MercuryGate International Inc., a of software-as-a-service based transportation management systems. The target serves shippers and carriers.

Arlington Capital Partners has bought Black Box's government solutions business, forming Tyto Athene, a managed services provider of communications systems for the Department of Defense.

Featured content
As Indra Nooyi ends her 12-year run in the top job at PepsiCo Inc. (NASDAQ: PEP), the number of women CEOs in the S&P 500 drops to 24. But in the middle market, a growing movement is nurturing women-led companies. For example, Lorine Pendleton, a member of Pipeline Angels, focuses on inclusion investing, backing companies led by diverse entrepreneurs. Read the full story: Inclusion investing nurtures companies led by women and minorities.

Exponent, a new group of women dealmakers, brought together 200 women from private equity funds, investment banks, startups and M&A advisory firms for the Exponent Exchange, featuring Sallie Krawcheck as the keynote speaker. Previously the CEO of Wall Street banks, including Merrill Lynch Wealth Management and Citi Private Bank, Krawcheck serves as the CEO of Ellevest, an online investing platform for women. Mergers & Acquisitions participated as an in-kind sponsor, and editor-in-chief Mary Kathleen Flynn moderated a panel. Check out our slideshow, Exponent drew 200 women dealmakers to event featuring Sallie Krawcheck.

While some of the firms that were instrumental in launching the middle market back in the 1980s and 1990s have long since been shuttered, their legacy lives on. They proved to be excellent training grounds for many successful dealmakers. Heller Financial certainly belongs in this category, and Mergers & Acquisitions featured its alumni a few years ago. Another firm with a far reach is Holleb & Coff, a Chicago law firm that closed in 2000, after a nearly 50-year run. Founded by Marshall Holleb and Morris Coff in 1951, the firm advised prestigious clients, such as American National Bank, Hollinger International Inc.and LaSalle Bank. Revenue topped $40 million in 1997. In its heyday, Holleb & Coff employed 130-plus attorneys; it was the law firm to work for in the Midwest. Drawn to the supportive culture, new associates and seasoned partners alike enjoyed working at the venerated firm. Many of the lawyers who worked at Holleb & Coff back in the day are making a significant impact on M&A today, including: John Corvino, general counsel to the Chicago White Sox; · Brian Kerwin, chair of Duane Morris’ global corporate practice; Theodore (Ted) Koenig, the founder and CEO of Monroe Capital; Kenneth Serota, president of Hu-Friedy Manufacturing Co., and Michelle Warner, general counsel, USG Corp. (NYSE: US). Read the full story: Holleb & Coff alumni: Where are they now?

See Mergers & Acquisitions' look at 10 PE firms that have succeeded in raising new funds recently despite an overall slowdown in PE fundraising, including the Carlyle Group (Nasdaq: CG), PPC Partners, Soundcore Capital Partners and Sycamore Partners. For the latest on PE fundraising, see PE fundraising scorecard: TPG Asia and Versey Street Capital.

Procter & Gamble Co. (NYSE: PG) is focusing on growing its top 25 brands, including Bounty paper towels, Charmin toilet paper, Crest toothpaste, Pampers diapers, Nyquil cough and cold medicine, and Tide laundry detergent, while seeking acquisitions. In April, P&G announced plans to buy Merck KGaA’s consumer-health business for $4.2 billion. The deal includes the Femibion and Neurobion over-the-counter healthcare brands. P&G is also purchasing skincare brand First Aid Beauty. “What you have to have is the brand consumers prefer, because then retailers want to carry it, because it builds the basket,” P&G CEO David Taylor explains. Read the full story: Why P&G is changing its M&A strategy.

Summer reading list: From stories of star athletes Arnold Palmer, Keith Hernandez and Tiger Woods to advice from entrepreneurs Bridgewater AssociatesRay Dalio, KPCB’s John Doerr, Nike’s Phil Knight and Brava Investments’ Nathalie Molina Niño, plus strategies to help business leaders in general, and female dealmakers in particular, the 15 books on Mergers & Acquisitions’ list entertain, instruct and inspire. Check out our listicle: Dealmaker’s guide to summer reading: 15 new books.

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