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M&A wrap: KKR, Google, Looker, Genstar, KPS, Apax, CenterOak, Goldman Sachs, Investcorp, Windjammer, Manufacturing M&A


KKR (NYSE: KKR) has raised $1.3 billion for its global impact fund. The fund is “dedicated to investment opportunities in companies whose core business models provide commercial solutions to an environmental or social challenge,” the firm says. The fund will target companies in the lower middle-market that contribute towards the United Nations Sustainable Development Goals. Among the themes that the fund will focus on include: climate change, clean water, workforce development, waste, mobility, sustainability and infrastructure improvements. “We are thrilled to see our investors’ shared enthusiasm for the tremendous opportunity we see ahead for KKR Global Impact and will build on this to help set the new standard across investing, value creation and measuring success in the space,” says Alisa Amarosa Wood, KKR partner and head of KKR’s private market products group. Investment firms are raising funds that focus on climate change. For example, BlackRock has raised $1 billion to invest in wind, solar and battery-storage projects. Renewable energy is becoming “one of the most active sectors in infrastructure,” David Giordano, global head of BlackRock renewable power, told Bloomberg News. It comes, he said, “as global power generation shifts from two-thirds fossil fuels to two-thirds renewables over the next few decades.”

Large global Fortune 500 manufacturers are focusing on their core competencies and looking to divest non-core assets, resulting in acquisition opportunities for private equity firms. Manufacturers are continuously evaluating their lines of businesses and in recent years have been selling non-core assets to focus on bottom-line growth and profitability. A 2018 Ernst & Young study, How Can Divesting Fuel Your Future Growth, noted that nearly nine out of 10 companies planned to divest assets in the next two years, up from roughly four out of 10 a year earlier. Corporate decision makers say shifts in global tax policy, new technologies and other industry trends amplify the need to sell non-core assets and reroute capital to other business areas. This trend has been a boon for private equity firms in the sector like KPS Capital Partners. “Very large global Fortune 500 corporates are focusing on their core competencies,” says Michael Psaros, KPS co-founder. “The public stock market and activists are really pushing them to divest non-core business lines and they are listening.” Most of his firm’s investments have been complex carve-outs from corporate manufacturers executed on a global basis. In 2019, KPS acquired Howden, a provider of industrial gas handling products and services, from Colfax Corp. (NYSE: CFX), a welding and valves manufacturer, for $1.8 billion, including $1.66 billion in cash consideration. Read our full coverage: 5 trends driving manufacturing M&A.

DEAL NEWS
The U.K.’s antitrust authority cleared Google’s (Nasdaq: GOOG) $2.6 billion takeover of Looker Data Sciences Inc., joining U.S. regulators in declining to open an in-depth review. The purchase was not likely to weaken competition as Google would not be inclined to stymie its rivals, the Competition and Markets Authority said. Google announced in June that it planned to buy California-based Looker to boost its cloud offering, which lags behind Amazon.com Inc. (Nasdaq: AMZN) and Microsoft Corp. (Nasdaq: MSFT). Read the full story by Bloomberg News: Google’s $2.6 Billion Looker deal cleared by U.K. regulator.

Genstar-backed energy data analytics company Enverus has acquired oil and gas technology firm RS Energy Group from Warburg Pincus. Goldman Sachs (NYSE: GS), Simpson Thacher, Weil, Gotshal & Manges LLP, Ropes & Gray LLP and Irell & Manella LLP advised Enverus. Credit Suisse, Jefferies and Kirkland & Ellis advised RS Energy.

Apax Partners is buying early childhood education provider Cadence Education from Morgan Stanley Capital Partners. William Blair, Lazard Middle Market and Debevoise & Plimpton LLP are advising Morgan Stanley. Simpson Thacher & Bartlett LLP is advising Apax.

CenterOak Partners-backed Service Champions has acquired Bell Brothers Plumbing Heating and Air, a provider of residential air conditioning and plumbing services. Greenberg Glusker Fields Claman & Machtinger LLP advised Bell Brothers, while Gibson, Dunn & Crutcher LLP advised CenterOak.

Goldman Sachs Merchant Banking and Eurazeo-backed Trader Interactive has purchased commercial trucking and equipment companies NextTruck, Rock & Dirt, Tradequip and Trade-A-Plane from the Cosby Harrison Co.

Investcorp has acquired seafood distributor Fortune Fish & Gourmet. Houlihan Lokey (NYSE: HLI) advised Fortune.

Corridor Capital-backed Nationwide Property & Appraisal Services LLC has bought appraisal management company Olde City Lending Solutions. Berkery Noyes advised Olde City.

MiddleGround Capital has acquired Banner Service Corp. from Centerfield. The target produces cold finished, straightened, ground, and polished metal bar products.

Windjammer Capital Investors has acquired Compex Legal Services, a provider of outsourced medical records retrieval and litigation support services.

DEAL TRENDS
Private equity deal value increased by 3 percent in 2019, despite a 6 percent drop in fundraising, according to EY’s PE Pulse report. Average fund sizes increased by 32 percent in 2019 to $846 million, helped along by new investors in the space such as family offices. PE exits increased by 2 percent.

PEOPLE MOVES
Philip Lo has joined alternative investment firm GPI Capital as a managing director, investor relations and business development. He was most recently with Siris Capital.

John Magee has been named CEO at Aurora Capital Partners-backed VLS Recover Services. Magee was previously with Worldwide Logistics.

FEATURED CONTENT
Artificial intelligence in healthcare saw about $4 billion in funding across 367 deals in 2019, according to data and research firm CB Insights. Amazon.com Inc. (Nasdaq; AMZN) is no exception. The tech conglomerate is using its recent deals for Health Navigator and PillPack to launch new software services in healthcare. Health Navigator works with companies like Microsoft Corp. (Nasdaq: MSFT) in offering services such as remote diagnoses, and with triage to help patients figure out whether to stay at home, see a doctor or go straight to the emergency room. Read our full coverage: How Amazon is using M&A to revolutionize healthcare.

Pushed by a groundbreaking California law mandating it, more companies are putting women on their public corporate boards. The law faces pressure in court and may not stand, but its rippling effect has already started to increase the visibility and awareness of the important benefits of board diversity. Investors are taking notice and trying to get ahead of the curve. According to a study published by MSCI in March 2018, having three or more women on a company’s board of directors translates to a 1.2 percent median productivity above competitors. Read the full guest article by Venable’s Belinda Martinez Vega: Why businesses are adding women to their boards.

If there’s anything M&A professionals dislike, it’s uncertainty. And heading into 2020, there’s more than enough uncertainty to go around, including questions about the economy, international trade, impeachment, domestic politics and more. The funny thing is, the lack of clarity may actually make the first half of the year a great time for M&A, as dealmakers push to close transactions before the looming uncertainty of Election Day and its outcome. We conducted interviews with 8 investment bankers and other M&A advisors. Some said the first half of the year will be robust, while others said the uncertainty may have a negative impact throughout 2020. Read the full story, What’s ahead for M&A in 2020? We ask 8 advisors.

Mergers & Acquisitions has named the 2020 Most Influential Women in Mid-Market M&A. This marks the fifth year we have produced the list, which recognizes female leaders with significant influence inside their companies and in the wider dealmaking world. It’s been gratifying to watch the project evolve over the years – and become more influential itself. This year, we received more nominations than ever before. As a result, we expanded the number honored to 42 in 2020, up from 36 in 2019. Many dealmakers are new to our list, including Rockwood Equity Partners’ Kate Faust, William Blair’s Shay Brokemond and Avante Capital Partners’ Ivelisse Simon. Read our full coverage of all the champions of change on our list, including Q&As with each individual.

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.

EVENTS
ACG New York is hosting the 12th annual healthcare conference and bourbon tasting at the Metropolitan Club in New York on Feb. 27.

ACG Raleigh Durham’s 18th annual capital conference is being from March 31-April 1 at the Raleigh Marriott Crabtree Hotel in Raleigh, North Carolina.

InterGrowth 2020 is taking place at the Aria Resort & Casino in Las Vegas from April 20-22.

Source: The Latest

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M&A wrap: Aflac, Varagon, AIG, Apax, L Catterton, IOP, Rockwell, Most Influential Women, Call for Nominations


Aflac Global Investments, a subsidiary of insurer Aflac Inc. (NYSE: AFL) is forming a partnership with middle-market lender Varagon Capital Partners. Varagon is also extending its partnership with American International Group. Aflac is committing up to $3 billion for Varagon to invest in mid-market loans, and is also buying the minority stake in Varagon held by former and current Oak Hill Capital partners and affiliates. Aflac and AIG will own equal stakes in Varagon, and the deal does not reduce Varagon’s ownership. “Middle market credit is a strategically important asset class for Aflac and we are excited to partner with Varagon,” says Aflac global chief investment officer Eric Kirsch. Varagon made about $14.5 billion in financing commitments to around 180 companies, as of Dec. 31. “These long-term commitments from two world-class insurers provide access to substantial capital, enhance Varagon’s capabilities to serve investors and borrowers, and accelerate the execution of our strategic growth objectives,” says Varagon CEO Walter Owens. Wells Fargo Securities and Davis Polk & Wardwell LLP are advising Varagon. Rothschild and Debevoise & Plimpton are advising Aflac. Cadwalader, Wickersham & Taft LLP is representing AIG.

Mergers & Acquisitions has opened up the nomination process for the 13th Annual M&A Mid-Market Awards, which will honor leading dealmakers and deals that set the standard for transactions in the middle market in 2019. Nominations are accepted only through our electronic forms. The deadline is Friday, Feb. 7, 2020. There is no fee. For more information on the nomination process and what we seek in winning candidates, see Call for nominations: Submissions for the M&A Mid-Market Awards due Feb. 7.

CLICK HERE TO SUBMIT A NOMINATION.

DEAL NEWS
Apax Partners and L Catterton have invested $285 million in ClassPass, which gives people access to gyms and fitness studios and allows them to make reservations online. Apax and L Catterton join existing investor Temasek. Kirkland & Ellis represented L Catterton

Industrial Opportunity Partners has acquired acquired Midwest Recycled and Coated Containerboard Mill. The latter manufactures recycled containerboard, for packaging, recycled bag products and white paper for book publishing and printing materials. McDermott Will & Emery represented IOP. JP Morgan Chase Bank and Yukon Partners provided financing.

Human behavior and data analytics firm Escalent has purchased Javelin Strategy & Research from Greenwich Associates. The deal expands Escalent’s presence in retail and small business banking. Marlin & Associates advised Javelin.

Entrepreneurial Equity Partners-backed Daniele International has merged with Creminelli Fine Meats. The target is a producer of charcuterie and protein snacks. BofA Securities advised the Creminelli.

Rockwell Automation (NYSE: ROK) is buying cybsecurity company Avnet Data Security.

PEOPLE MOVES
Mark Satran has joined aerospace and defense-focused private equity firm AE Industrial Partners as a senior managing director. He was previously with Alterna Capital Partners.

Ian Read, a former Pfizer (NYSE: PFE) CEO, was hired by the Carlyle Group (Nasdaq: CG) as an operating executive in the firm’s healthcare group. Read will help Carlyle find healthcare investments. Separately, Carlyle partner Bryan Corbett was hired by the Managed Funds Association, the hedge fund’s industry main trade association, as its new president. The group lobbies on tax and financial regulation issues.

WIlliam Perlstein has joined FTI Consulting Inc. (NYSE: FCN) as a senior managing director and vice chair, client services. He was most recently with BNY Mellon.

Brian Brownschidle, Roger Gill and David Lloyd have been promoted to managing directors at financial services firm XMS Capital Partners.

FEATURED CONTENT
If there’s anything M&A professionals dislike, it’s uncertainty. And heading into 2020, there’s more than enough uncertainty to go around, including questions about the economy, international trade, impeachment, domestic politics and more. The funny thing is, the lack of clarity may actually make the first half of the year a great time for M&A, as dealmakers push to close transactions before the looming uncertainty of Election Day and its outcome. We conducted interviews with 8 investment bankers and other M&A advisors. Some said the first half of the year will be robust, while others said the uncertainty may have a negative impact throughout 2020. Read the full story, What’s ahead for M&A in 2020? We ask 8 advisors.

Mergers & Acquisitions has named the 2020 Most Influential Women in Mid-Market M&A. This marks the fifth year we have produced the list, which recognizes female leaders with significant influence inside their companies and in the wider dealmaking world. It’s been gratifying to watch the project evolve over the years – and become more influential itself. This year, we received more nominations than ever before. As a result, we expanded the number honored to 42 in 2020, up from 36 in 2019. Many dealmakers are new to our list, including Rockwood Equity Partners’ Kate Faust, William Blair’s Shay Brokemond and Avante Capital Partners’ Ivelisse Simon. Read our full coverage of all the champions of change on our list, including Q&As with each individual.

Mergers & Acquisitions examines the impact of 7 technologies on M&A in the retail sector. Read the whole series:

Overview: Retail Tech M&A: 7 Technologies Driving Change
Retail Tech M&A #1: Nike, McDonald’s, PayPal, add customization, IoT
Retail Tech M&A #2: Why Walmart and other retailers are buying artificial intelligence startups
Retail Tech M&A #3: Amazon leads race to build fulfillment centers
Retail Tech M&A #4: Do robots fill orders faster?
Retail Tech M&A #5: Voice recognition gives retailers more ways to communicate
Retail Tech M&A #6: Data improves customer service
Retail Tech M&A #7: Demand for convenience drives growth in mobile ordering

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.

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.

EVENTS
The Annual AM&AA Winter Conference is taking place in Scottsdale, Arizona 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.

ACG New York is hosting the 12th annual healthcare conference and bourbon tasting at the Metropolitan Club in New York on Feb. 27.

Source: The Latest