M&A wrap: Zoe's Kitchen, Cava Group, Panera Bread, Ron Shaich, Tyson Foods
Cava Group, backed by investors including Panera Bread founder Ron Shaich, is acquiring restaurant chain Zoe's Kitchen Inc. (NYSE: ZOES) for about $300 million, as Americans spend more money at restaurants. Zoe's Kitchen, founded in 1995, is a Mediterranean fast-casual restaurant chain with about 260 locations. The menu features items, such as lamb pita and chicken and steak kabobs. Cava is also a Mediterranean fast-casual chain. Cava operates around 60 restaurants and is aiming to increase the number to 75 by the end of 2018. Cava sells hummus, tzatziki and others dips and spreads in grocery stores, inducing Whole Foods markets. "Together, these two brands are united by a shared heritage and passion for exceptional Mediterranean cuisine," says Cava CEO Brett Schulman. "Now with the addition of Zoe's Kitchen, we will be able to broaden our geographic footprint and meet the needs of even more guests." The deal is being funded through an investment from Act III Holdings, the Invus Group, and existing investors Swan & Legend Venture Partners and Revolution Growth. Act III was created by Panera founder Shaich, who will serve as chairman of the combined Zoe's and Cava company. Act III has also invested in Clover Food Lab, Life Alive Organic Cafe, Tatte Bakery and Open World. Revolution Growth was founded by America Online co-founder Steve Case and Ted Leonsis, owner of the National Hockey League’s Washington Capitals. Spending at restaurants has surged in recent months, according to the U.S. Department of Commerce. The recent gains appear to reflect more people dining out more frequently. Major restaurant companies have also increased prices. For more on restaurant M&A trends, read: What's attracting hungry buyers to restaurants? Here are 7 trends. Piper Jaffray Cos. (NYSE: PJC) and Greenberg Traurig are advising Zoe's Kitchen. Citigroup Global Markets Inc. (NYSE: C) and Skadden, Arps, Slate, Meagher & Flom are advising Cava. Morgan Stanley, Sullivan & Cromwell and Simpson Thacher & Bartlett are advising Shaich and the Invus Group.
Tyson Foods Inc (NYSE: TSN), the largest U.S. meat producer, agreed to buy chicken-nugget maker Keystone Foods LLC for about $2.5 billion, according to Bloomberg News. Brazil’s Marfrig Global Foods SA, which is selling Keystone, will retain a U.S. hamburger factory, which supplies to nuggets to McDonald's Corp. (NYSE: MCD). The Keystone deal comes at a time when U.S. producers are grappling with weakening meat prices amid higher supplies and import tariffs imposed by China and Mexico in retaliation against U.S. duties on metal shipments. Read the full story: Tyson to buy chicken nugget maker Keystone.
BC Partners-backed Keter Group is purchasing garden furniture maker Adams Manufacturing. Mesirow Financial and Gordon & Rees LLP are advising Adams.
Boeing Co. (NYSE: BA) is acquiring Millennium Space Systems, a maker of small satellite systems. The deal expands Boeing's satellite and space portfolio. Union Square Advisors is advising the target.
LightBay Capital has invested in the Boardroom Salon Co., an operator of men's salons. Harris Williams and Massumi + Consoli LLP advised LightBay. Deloitte Corporate Finance and Ferguson Braswell Fraser Kubasta PC advised Boardroom Salon.
For more deal announcements, see the Weekly wrap: Best Buy, Peak Rock, Thoma Bravo.
Jon Cohen has joined Orangewood Partners-backed George Industries, a manufacturer of a aerospace and defense parts, as president. Cohen previously held roles at Lockheed Martin Corp. (NYSE: LMT).
From Starbucks Corp. (Nasdaq: SBUX) to Walmart Inc. (NYSE: WMT), companies are discovering they must provide lifelong learning opportunities to attract and retain the best employees, including millennials. Private equity firms are investing in companies that can provide corporations with a mix of online, virtual and face-to-face learning experiences to revitalize what used to be called the “corporate university.” The added benefits are increased employee satisfaction, engagement and retention. Recent deals confirm this activity. In March, Stone Point Capital bought Grace Hill, a South Carolina-based provider of online training and credentialing for property managers. A month earlier, PWP Growth Equity acquired an interest in 360Training, a provider of online training courses aimed at fueling its growth in new and existing markets. Read the full guest article by MHT Partners' Alex Hicks: Private equity firms embrace corporate shift to lifelong learning.
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, which are aimed at relieving muscle, joint and back pain, colds and headaches. P&G is also purchasing skincare brand First Aid Beauty. First Aid, founded in 2009 and based in Newton, Massachusetts, makes products that are designed for sensitive skin, redness, dry skin and eczema. “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.
Exponent, a new group of women dealmakers, brought together 200 women from private equity funds, investment banks, entrepreneurs and advisors for the Exponent Exchange, featuring Sallie Krawcheck as the keynote speaker. Previously the CEO of Wall Streetbanks, 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 in the event as an in-kind sponsor, and editor-in-chief Mary Kathleen Flynn moderated Spotlight Panel, From Startups to Showtime: Investment Case Studies. Check out our slideshow, Exponent drew 200 women dealmakers to event featuring Sallie Krawcheck.
Mergers & Acquisitions has announced 11 Rising Stars of Private Equity, includingJohn Kos, Principal, GTCR; Ethan Liebermann, Principal, TA Associates; Jennifer Roach, Vice President, Yellow Wood Partners; and Afaf Ibraheem Warren, Senior Associate, Siris Capital . The up-and-coming investors are expected to play significant leadership roles in the future. For profiles of the emerging leaders, see Meet Mergers & Acquisitions' 11 Rising Stars of Private Equity.
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: Ridgemont Equity and Yellow Wood.
Summer reading list: From stories of star athletes Arnold Palmer, Keith Hernandez and Tiger Woods to advice from entrepreneurs Bridgewater Associates’ Ray 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.