2019 Rising Stars of Private Equity

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2019 Rising Stars of Private Equity As the industry undergoes a generational shift, it’s well Austin Collier, Branford Castle Shawn Domanic, Sterling worth getting to know Sophia Popova, Summit these emerging leaders

CV1_MAJ0719.indd 1 7/8/19 1:04 PM WHAT’S THE DEAL WITH DUANE MORRIS? THAT NAME KEEPS POPPING UP MORE AND MORE AS DEAL COUNSEL

Representative Private Equity, M&A and Financing Deals

$1.6 BILLION $292 MILLION Sale to PE firm All-stock merger - largest Secondary fundraise Wind Point for world’s Sale to Midwest private U.S. public cannabis for Europe’s most equity firm for leading valuable fintech start- leading manufacturer deal to date - with MPX supply chain solutions up TransferWise Ltd., of composite pipeline Bioceutical Corp. (CSE: provider to consumer representing growth repair solutions MPX) for Canadian-listed packaged goods industry capital investor

$37 MILLION $250 MILLION $361 MILLION $2.585 BILLION Acquisition of Trident Reverse takeover of Investment into Covetrus, Senior secured revolving credit facility with University International, Lineage Grow Company Inc., a combination of a Bank of America as a regionally accredited (CSE: BUDD) for California spinout of Henry Schein, Administrative Agent university, by an affiliate cannabis company FLRish, Inc. Inc. (NASDAQ: HSIC) and (d/b/a Harborside) for NYSE-listed of NASDAQ-listed Vets First Choice for

$55 MILLION £39 MILLION $750 MILLION $150 MILLION Syndicated secured Sale to Red Industries, Syndicated financing Syndicated financing to a acquisition financing to a creating one of largest with JPMorgan Chase major insurance brokerage seven-member borrower UK independent Bank as Administrative for this subsidiary of group for hazardous waste Agent for Wintrust Financial companies, for

$92 MILLION $200 MILLION $80 MILLION IPO in India of Fine Organic Acquisition of Structured renewable Industries (NSE: FINEORG) Singapore-listed Acquisition and financing energy investment for lead managers and global electronics of three Chicago-area in Vietnam for hospitals, including investor underwriters manufacturer PCI Ltd. leading Asia-Pacific joint ventures, asset independent renewable for private equity firm contribution and leasing for energy company

For more information on how seriously

Seattle we take our deals, get in touch with BRIAN KERWIN, chair of our global corporate practice, at 312.499.6737 or [email protected].

www.duanemorris.com

An Am Law 100 law firm. More than 800 lawyers. Established 1904. Duane Morris LLP – A Delaware limited liability partnership

0C2_MAJ0719 2 7/3/2019 9:54:02 AM Contents July/August 2019 | VOL. 54 | NO. 7

Cover Story 16 2019 Rising Stars of Private Equity Keep your eye on these 10 emerging leaders. They represent the future of private equity.

Private Equity Perspective 12 Why PE firms need women Gender-diverse investment committees deliver better performance than all-male groups, new research reveals.

The Buyside Sophia Popova 14 Vice President Here come the robots Summit Partners The need to produce higher-quality products at faster speeds is fueling demand for robots and related deals.

Features 32 A-Rod talks investments Former Yankees star Alex Rodriguez shares his strategy for investing in Ice Shaker, NRG eSports and fiancee Jennifer Lopez’s brands.

COVER PHOTO: SASHA NIALLA 36 Venture Capital’s rising tide A wave of successful IPOs, including Watercooler Guest Articles Beyond Meat, Pinterest, Slack and 6 31 Zoom Video, is giving VCs their day at TPG Pace bets on gaming growth Post-close talent playbook the beach. The firm’s SPAC is merging with slots Before the transaction even closes, the 35 operator Accel Entertainment, as more new private equity owner should set Cybersecurity risks threaten deals states legalize gambling. expectations and begin to establish trust, write Summit Leadership Partners’ Incidents are putting M&A in jeopardy, 8 finds a recent survey. H&R Block buys Wave Dan Hawkins and Todd Fryling. The tax expert is acquiring financial 44 services software provider Wave Focus on the human factor Financial to expand offerings for small “Whether you call it engagement, People Moves business customers. satisfaction or happiness, we have 46 10 seen first-hand the positive financial New hires and Promotions Sam Adams sips craft beer impact putting people first has,” says Ruulke Bagijn gets promoted at the Alpine Investors’ Graham Weaver. The maker of Sam Adams and Angry Carlyle Group. Maarten Meurs joins Orchard is merging with Dogfish Head. William Blair. Melissa Mounce gets hired by GTCR.

TheMiddleMarket.com July/August 2019 Mergers & Acquisitions 1

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TheMiddleMarket.com Rising Stars 1 STATE STREET PLAZA, 27TH FLOOR NEW YORK, NY 10004-1505 • (212) 803-8200 EDITOR-IN-CHIEF Mary Kathleen Flynn Spend some time with these 10 emerging leaders to MANAGING EDITOR Demitri Diakantonis discover the future of private equity CONTRIBUTING EDITORS Keith Button, Danielle Fugazy GROUP EDITORIAL DIRECTOR, BANKING AND CAPITAL MARKETS Richard Melville

Looking for a glimpse of what’s to come in the EXECUTIVE DIRECTOR, CONTENT OPERATIONS private equity industry? Meet Mergers & Acquisitions’ AND CREATIVE SERVICES Michael Chu 2019 Rising Stars of Private Equity. As the PE industry SR. ART DIRECTOR Nick Perkins undergoes a generational shift, and many firm founders retire, it’s well worth getting to know these VICE PRESIDENT, CAPITAL MARKETS Harry Nikpour (212) 803-8638 emerging leaders. They represent the future of private ASSOCIATE MARKETING MANAGER equity. Congratulations to the 10 Rising Stars: Leatha Jones

Austin Collier, senior associate, Branford Castle Partners Kevin Cunningham, managing director, LNC Partners CHIEF EXECUTIVE OFFICER �� Gemma Postlethwaite Shawn Domanic, vice president, Sterling Partners CHIEF FINANCIAL OFFICER ��Sean Kron Stephen Jeschke, principal, GTCR EVP & CHIEF CONTENT OFFICER �� David Longobardi Danielle Lalli, vice president, Huron Capital CHIEF STRATEGY OFFICER...... Jeff Mancini CHIEF DATA OFFICER...... Christian Ward Jason Mironov, director, TA Associates SVP, CONFERENCES & EVENTS ��John DelMauro James Oh, partner, Transom Capital Group VP, PEOPLE & CULTURE ��Lee Gavin Sophia Popova, vice president, Summit Partners

Pavan Tripathi, principal, Bregal Sagemount LICENSING AND REUSE OF CONTENT: Contact our official partner, Wright’s Media, about available Christine Wang, principal, Francisco Partners usages, license and reprint fees, and award seal artwork at [email protected] or (877) 652-5295 for more information. Please note that Wright’s Media is the only authorized company that we’ve partnered with for SourceMedia materials. These 10 up-and-coming dealmakers share a common set of core values.

They are passionate about building companies. They are naturally curious and CUSTOMER SERVICE interested in changing things for the better. They enjoy working with portfolio [email protected] or (212) 803-8500

company managers, investment bankers and other deal team members. They Mergers & Acquisitions Vol. 54/No. 7 (ISSN 0026-0010) is published monthly with combined issues in July/August appreciate the responsibility and autonomy their firms have given them. They and November/December by SourceMedia, One State Street Plaza, 27th Floor, New York, NY 10004-1505. Yearly are grateful for the leaders who have helped shape their careers, and they are subscription is $1,995; $2035 for one year in all other generous with their own time when it comes to nurturing the next generation. countries. Periodical postage paid at New York, NY and U.S. additional mailing offices. POSTMASTER: Send address changes to Mergers & Acquisitions / SourceMedia, One State Street Plaza, New York, NY 10004. For subscriptions, In this issue, you’ll find profiles of the Rising Stars. To watch video interviews renewals, address changes and delivery service issues contact our Customer Service department at (212) 803- and read Q&As, visit www.themiddlemarket.com. M&A 8500 or email: [email protected]. This publication is designed to provide accurate and authoritative information – Mary Kathleen Flynn regarding the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering financial, legal, accounting, tax, or other professional service. Mergers & Acquisitions is a registered trademark used herein under license. © 2019 Mergers & Acquisitions and SourceMedia, Inc. All rights reserved.

2 Mergers & Acquisitions July/August 2019

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Conversations News Special reports

Q&As with dealmakers L Catterton backs Del Frisco’s 10 Rising Stars of PE tell their tales “There is nothing more exciting than The private equity firm is buying the Looking for a glimpse of the future helping category-leading businesses restaurant group for $650 million. Pop- of private equity? Check out these scale faster,” says Summit Partners’ ular with business diners, Del Frisco’s interviews with the up-and-coming Sophia Popova, one of Mergers & Ac- began seeking buyers in December, dealmakers named by Mergers & quisitions’ 2019 Rising Stars of Private following six months of pressure to sell Acquisitions as the 2019 Rising Stars Equity, in a video interview. from Engaged Capital, its third largest of Private Equity. They are shaping the shareholder. industry’s future.

4 Mergers & Acquisitions July/August 2019

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005_MAJ0719 5 7/3/2019 9:54:06 AM Watercooler

Private equity pros take digital value seriously

Most PE executives says they include digital in their investment strategies

Private equity firms welcome the value of digital. Half the private equity respondents to a recent survey said they always include digital value creation as part of their investment strategy, and another 34 percent say they often include it. More than 82 percent say they view digital investments at a portfolio company as a value driver for an exit, while 75 percent said they make digital investments to improve a sale price of a portfolio company. Delineating where digital and technical debt reside within a company and what areas need to improve will help BLOOMBERG NEWS TPG Pace bets on gaming growth

The deal comes as more states look to legalize gambling

By Demitri Diakantonis and Mary Kathleen Flynn

TPG Pace Holdings Corp., the special celerate Accel’s growth as more states they require to generate additional purpose acquisition affiliate of TPG, is look to legalize gaming. revenue.” merging with slots operator Accel En- “With the TPG Pace team on board, TPG Pace Group has backed three tertainment Inc. for an initial enterprise we will be able to leverage their rel- SPAC companies, including Play Ho- value of $884 million. Accel operates evant insights, differentiated capabili- tels and Resorts, Magnolia, and TPG more than 8,000 slots machines in ties and operational expertise as we Pace Holdings. The firm raised more about 1,700 locations, including res- enter this next phase of growth for Ac- than $2 billion since 2015. taurants, bars, convenience stores and cel,” says Accel CEO Andy Rubenstein. Advisors to Accel include: The Raine truck stops. “As a publicly listed company, we look Group, Fenwick & West and Much She- TPG Pace expects the target to forward to accessing increased capital list. Advisors to TPG Pace include: J.P. generate over $100 million in adjusted to further support our expansion, while Morgan Securities LLC (NYSE: JPM), Ebitda in 2020. As part of the deal, TPG remaining laser focused on continu- Goldman Sachs (NYSE: GS), Deutsche Pace raised $45 million in a private ing to deliver to our current location Bank Securities and Weil, Gotshal & placement offering. The deal will ac- partners the products and services Manges LLP.

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a private equity firm define its approach to technology in its Private equity pros take target company. digital value seriously Thoma Bravo-backed Quorum Software has bought Archeio Technologies, a provider of oil and gas document Most PE executives says they include classification and smart search technology, as the energy digital in their investment strategies sector becomes digitized. And in the construction industry, and there is a growing demand for technology that will help Private equity firms welcome the value of digital. Half the contractors. private equity respondents to a recent survey said they “A documented digital strategy does one crucial and always include digital value creation as part of their invest- often overlooked thing: It identifies and prioritizes the ment strategy, and another 34 percent say they often include highest potential digital value creation areas for the it. More than 82 percent say they view digital investments business,” says Nick Hahn, a director of digital at West at a portfolio company as a value driver for an exit, while 75 Monroe Partners. The report is based on phone inter- percent said they make digital investments to improve a sale views with 100 senior PE executives conducted in the first price of a portfolio company. quarter of 2019. Delineating where digital and technical debt reside within a company and what areas need to improve will help BLOOMBERG NEWS TPG Pace bets on gaming growth

The deal comes as more states look to legalize gambling

they require to generate additional revenue.” TPG Pace Group has backed three SPAC companies, including Play Ho- tels and Resorts, Magnolia, and TPG Pace Holdings. The firm raised more than $2 billion since 2015. Advisors to Accel include: The Raine Group, Fenwick & West and Much She- list. Advisors to TPG Pace include: J.P. Morgan Securities LLC (NYSE: JPM), Goldman Sachs (NYSE: GS), Deutsche Bank Securities and Weil, Gotshal & Manges LLP.

TheMiddleMarket.com July/August 2019 Mergers & Acquisitions 7

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Gaining customer insights

Boomerang Commerce assists Lowe’s in digitizing pricing

Home improvement retailer Lowe’s Cos. (NYSE: LOW) has acquired the retail analytics suite of products and services from Boomerang Commerce. Boomerang’s technology offers retail

BLOOMBERG NEWS MOD PIZZA analytics services that processes product and pricing datasets and converts H&R Block buys Wave CD&R takes a slice them into insights. The acquisition is designed to assist Lowe’s in modern- The software provider helps small Mod is known for making individual izing and digitizing the company’s businesses artisan-style pizzas approach to pricing. “One of the key components of our transformation H&R Block Inc. (NYSE: HRB) is buying financial services soft- Clayton, Dubilier & Rice has invested $150 million in fast- here at Lowe’s is to modernize our ware provider Wave Financial Inc. for $405 million. Wave’s casual pizza chain Mod Super Fast Pizza Holdings to help technology,” says Lowe’s chief infor- technology helps small businesses with free accounting, accelerate the target’s growth., which is planning on having mation officer Seemantini Godbole. invoices and receipt-tracking. The target generates revenue over 1,000 locations over the next five years. Mod is known “Pricing and assortment planning by offering additional products such as payment process- for making individual artisan-style pizzas with any combina- have been identified as strategic ing, payroll and bookkeeping services. Wave’s products and tion of 30 toppings for one price. areas in need of modernization. And services are used by more than 400,000 small businesses Mod plans to improve its customer experience by invest- when we find the right assets avail- globally every month. The deal expands H&R Block’s pres- ing in digital services, while looking for ways to use its busi- able to buy and advance our strategy, ence in the small business market. ness as a platform to make a positive social impact. we’ll do that.” Founded by Guru Hari- “Bookkeeping and cash flow management are signifi- “Mod has made important investments in online and haran in 2012, Boomerang Commerce cant pain points for small business owners and essential to mobile app ordering, innovative digital marketing strate- has raised more than $20 million in successful annual tax preparation,” says H&R Block CEO gies and customer loyalty programs and leads its competi- venture capital from firms including Jeff Jones. “Wave addresses these concerns by delivering tion in virtually all relevant customer satisfaction scores,” Shasta Ventures, Madrona Venture financial solutions and a simple user experience on a single says CD&R partner Paul Pressler. MOD was founded in Group and Trinity Ventures. Lowe’s platform. Wave provides us the opportunity to accelerate 2008 in Seattle by entrepreneurs who are known for build- acquisition includes the proprietary our small business strategy and is a great strategic fit, as ing Seattle Coffee Co. and Carluccio’s. technology and tools for the Retail both companies can leverage each other’s capabilities to Dealmaking in the restaurant sector, including pizza, is Analytics platform but excludes cus- bring tax and financial solutions to small business owners, very active. In 2019, former NBA star Shaquille O’Neal said tomer contracts and related confiden- serving more clients in more ways.” he is going to invest in nine Papa John’s International Inc. tial information and data. Adds Wave co-founder Kirk Simpson: “By helping with (Nasdaq: PZZA) restaurants. In 2017, Cleveland Avenue LLC, Some associates from the retail tax, we are confident that we can serve small business a venture capital firm started by former McDonald’s Corp. analytics teams will join Lowe’s. After owners even more effectively.” Following the deal close, (NYSE: MCD) CEO Don Thompson, acquired PizzaRev. Piz- the acquisition, Boomerang Com- Wave’s leadership team led by Simpson is expected to zaRev uses a “craft your own” approach to pizza, which is merce’s product CommerceIQ will remain in place, and will operate independently from its cooked in three minutes in a 900-degree stone oven. operate as an independent business Toronto headquarters. under the CommerceIQ.ai name.

8 Mergers & Acquisitions July/August 2019 TheMiddleMarket.com

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Gaining customer insights

Boomerang Commerce assists Lowe’s in digitizing pricing

Home improvement retailer Lowe’s Cos. (NYSE: LOW) has acquired the retail analytics suite of products and services from Boomerang Commerce. Boomerang’s technology offers retail BLOOMBERG NEWS

MOD PIZZA analytics services that processes product and pricing datasets and converts CD&R takes a slice them into insights. The acquisition is designed to assist Lowe’s in modern- Mod is known for making individual izing and digitizing the company’s artisan-style pizzas approach to pricing. “One of the key components of our transformation Clayton, Dubilier & Rice has invested $150 million in fast- here at Lowe’s is to modernize our casual pizza chain Mod Super Fast Pizza Holdings to help technology,” says Lowe’s chief infor- accelerate the target’s growth., which is planning on having mation officer Seemantini Godbole. over 1,000 locations over the next five years. Mod is known “Pricing and assortment planning ® for making individual artisan-style pizzas with any combina- have been identified as strategic tion of 30 toppings for one price. areas in need of modernization. And Mod plans to improve its customer experience by invest- when we find the right assets avail- ing in digital services, while looking for ways to use its busi- able to buy and advance our strategy, ANNUAL CONSUMER ness as a platform to make a positive social impact. we’ll do that.” Founded by Guru Hari- “Mod has made important investments in online and haran in 2012, Boomerang Commerce & RETAIL CONFERENCE 2019 mobile app ordering, innovative digital marketing strate- has raised more than $20 million in CTOBER gies and customer loyalty programs and leads its competi- venture capital from firms including O 17, 2019 | 4 PM - 8 PM tion in virtually all relevant customer satisfaction scores,” Shasta Ventures, Madrona Venture FASHION INSTITUTE OF TECHNOLOGY, NYC says CD&R partner Paul Pressler. MOD was founded in Group and Trinity Ventures. Lowe’s 2008 in Seattle by entrepreneurs who are known for build- acquisition includes the proprietary ing Seattle Coffee Co. and Carluccio’s. technology and tools for the Retail Dealmaking in the restaurant sector, including pizza, is Analytics platform but excludes cus- very active. In 2019, former NBA star Shaquille O’Neal said tomer contracts and related confiden- he is going to invest in nine Papa John’s International Inc. tial information and data. (Nasdaq: PZZA) restaurants. In 2017, Cleveland Avenue LLC, Some associates from the retail a venture capital firm started by former McDonald’s Corp. analytics teams will join Lowe’s. After (NYSE: MCD) CEO Don Thompson, acquired PizzaRev. Piz- the acquisition, Boomerang Com- zaRev uses a “craft your own” approach to pizza, which is merce’s product CommerceIQ will cooked in three minutes in a 900-degree stone oven. operate as an independent business under the CommerceIQ.ai name.

TheMiddleMarket.com July/August 2019 Mergers & Acquisitions 9

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Insight secures Recorded Future

Buyers are snatching up cybersecurity firms

Insight Partners is buying the majority stake it does not already own in cybersecurity company Recorded Future for $780 million. Recorded Future is the largest privately-held threat intelligence software provider in

BLOOMBERG NEWS BLOOMBERG NEWS the world, with more than 400 clients, including Morgan Stanley (NYSE: MS), Sam Adams sips craft beer Kroger partners with PE to Target Corp. (NYSE: TGT) and Veri- increase profits zon Communications Inc. (NYSE: VZ), There is a lot of room for growth in the according to the company. Recorded U.S. craft beer category Kroger, Lindsay Goldberg, form Future helps companies find cyber threats before they impact business Boston Beer Co. (NYSE: SAM), the maker of Sam Adams consumer platform Pearlrock by automatically collecting data and beer, Angry Orchard cider and Twisted Tea, has agreed to information from open web and dark merge with craft brewer Dogfish Head Brewery in a deal The Kroger Co. (NYSE: KR) and Lindsay Goldberg have web sources. valued at around $300 million. The deal expands Boston formed PearlRock Partners, a new platform company that “Everyday, we see firsthand the Beer’s presence in the craft beer category, which represents will invest in consumer brands. PearlRock will be part of challenges security teams, enterprises, less than 2 percent of beer sold in the U.S., according to the Kroger’s alternative profit streams portfolio. Grocery stores and even nations face in the fight company. The transaction will also allow Dogfish to better are under pressure to evolve with the rise of meal-kits, and against cyberattacks,” says Recorded compete against global beer conglomerates in the craft consumers seeking more convenient options such as home Future co-founder Christopher Ahl- sector. delivery. In 2018, Kroger acquired Home Chef for up to $700 berg in a blog posted on the com- “We expect that we’ll see more consolidation in the craft million. pany’s website. “There is no question industry over time, and we’ll be in the best position to take “We are transforming from grocer to growth company that the need for better cybersecurity advantage of those changes,” says Boston Beer CEO Dave by deploying our assets to serve even more customers and exists, and our clients have confirmed Burwick. create margin-rich alternative profit streams,” says Stuart time and time again that threat “In the past few years, there has been an intense Aitken, Kroger’s senior vice president of alternative busi- intelligence is the key ingredient for amount of consolidation among many craft breweries ness. Adds Lindsay Goldberg partner Brian Kelley: “Backed defending critical systems and infor- in the U.S. More than a dozen of our peers have sold to by a state-of-the-art predictive data platform, real-world mation. We view Insight’s financial international conglomerates, others have come together consumer product expertise and unparalleled merchan- commitment as further validation through platforms bringing a handful of craft breweries dising resources, these next-gen brands will be poised for that we are on the right track to together in roll-ups,” Dogfish founders Sam and Mariah growth and offer Kroger’s broad customer base greater improving security for organizations Calagione said in a blog post on Dogfish’s website. “While choice, convenience and innovation.” around the globe.” neither of those strategies appealed to us, we did realize PearlRock is part of Kroger’s Restock Kroger strategy, The majority of businesses have that Dogfish Head would be a stronger company with the which the company states is “leveraging its stores, logistics yet to migrate to the cloud, which support of our friends at Boston Beer, and vice-versa.” and data assets to create incremental new profit streams” means there’s still lots of room for Advisors to Dogfish include: Arlington Capital Advisors and “will contribute to the small brand ecosystem, helping growth in the cybersecurity sec- and McDermott Will & Emery LLP. The legal advisor to Bos- emerging brands grow and thrive in Kroger’s stores.” tor, and buyers have been eagerly ton Beer is Nixon Peabody. snatching up service providers. M&A

10 Mergers & Acquisitions July/August 2019 TheMiddleMarket.com

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Insight secures Recorded Future

Buyers are snatching up cybersecurity firms

BLOOMBERG NEWS the world, with more than 400 clients, including Morgan Stanley (NYSE: MS), Kroger partners with PE to Target Corp. (NYSE: TGT) and Veri- increase profits zon Communications Inc. (NYSE: VZ), according to the company. Recorded Kroger, Lindsay Goldberg, form Future helps companies find cyber threats before they impact business consumer platform Pearlrock by automatically collecting data and information from open web and dark The Kroger Co. (NYSE: KR) and Lindsay Goldberg have web sources. formed PearlRock Partners, a new platform company that “Everyday, we see firsthand the will invest in consumer brands. PearlRock will be part of challenges security teams, enterprises, Kroger’s alternative profit streams portfolio. Grocery stores and even nations face in the fight are under pressure to evolve with the rise of meal-kits, and against cyberattacks,” says Recorded consumers seeking more convenient options such as home Future co-founder Christopher Ahl- delivery. In 2018, Kroger acquired Home Chef for up to $700 berg in a blog posted on the com- million. pany’s website. “There is no question “We are transforming from grocer to growth company that the need for better cybersecurity by deploying our assets to serve even more customers and exists, and our clients have confirmed create margin-rich alternative profit streams,” says Stuart time and time again that threat Aitken, Kroger’s senior vice president of alternative busi- intelligence is the key ingredient for ness. Adds Lindsay Goldberg partner Brian Kelley: “Backed defending critical systems and infor- by a state-of-the-art predictive data platform, real-world mation. We view Insight’s financial consumer product expertise and unparalleled merchan- commitment as further validation dising resources, these next-gen brands will be poised for that we are on the right track to growth and offer Kroger’s broad customer base greater improving security for organizations choice, convenience and innovation.” around the globe.” PearlRock is part of Kroger’s Restock Kroger strategy, The majority of businesses have which the company states is “leveraging its stores, logistics yet to migrate to the cloud, which and data assets to create incremental new profit streams” means there’s still lots of room for and “will contribute to the small brand ecosystem, helping growth in the cybersecurity sec- emerging brands grow and thrive in Kroger’s stores.” tor, and buyers have been eagerly snatching up service providers. M&A

TheMiddleMarket.com July/August 2019 Mergers & Acquisitions 11

011_MAJ0719 11 7/9/2019 10:44:18 AM Private Equity Perspective Why PE firms should include more women on deal teams Gender-diverse investment committees deliver better performance and lower failure rates than all-male groups, new research reveals

By Mary Kathleen Flynn

The body of data demonstrating The findings provide concrete evi- are the women? Where are the people that diversity improves performance dence showing the value of including of color?,’” said panelist Kirsty Mc- has been growing in recent years, but, women on deal teams and may help Guire, deputy general counsel, legal until now, there hasn’t been a close to convince skeptics, pointed out PE and compliance, StepStone Group LP. look at how gender diversity in private investor Sheryl Schwartz, who spoke “Limited partners are asking the equity teams affects the performance on a panel to discuss the report. “With question and factoring diversity into of investments. Oliver Gottschalg, better performance and lower loss their investment decisions,” said a professor at HEC Paris, studied rates, why wouldn’t PE firms put wom- panelist Sally Mahloudji, managing performance at the PE deal level, and en on deal teams?,” says Schwartz, director MVision Private Equity Advis- the results are compelling: Private who serves on the board of the ers, which partnered with Gottschalg equity investment committees that Women’s Association of Venture and on the report. include women produce higher returns Equity (WAVE) and is one of Mergers & Women still hold just 9.4 percent and lower risk of failure than all-male Acquisitions Most Influential Women of senior positions at PE firms glob- counterparts, said Gottschalg, who in Mid-Market M&A. ally, the report found, indicating the presented his findings at a panel dis- “The biggest investors in the private industry still has a long way to go cussion hosted by the French business equity asset class, including pension before reaping the benefits of gender school and held at the National Arts funds, are increasingly asking, ‘Where diversity. M&A Club in New York. Gottschalg, a strategy and business policy professor and author of the HEC-Dow Jones private equity rank- ings, analyzed gender balance on the deal teams of nearly 2,500 PE transactions executed by more than 50 funds across 220 investment vehicles in North America and Europe. The results were dramatic: Gen- der-diverse investment committees outperformed all-male investment committees substantially, as measured by several metrics: 7 percent more alpha; .52x more total value to paid-in multiple; and 12 percent higher internal rate of return. Also impres- sive: the failure rate of gender-diverse investment committees was 8 percent lower. Sheryl Schwartz

12 Mergers & Acquisitions July/August 2019

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013_MAJ0719 13 7/3/2019 9:54:06 AM The Buyside

“With our combined Here come the robots capabilities, Hitachi and JR will be a uniquely quali- The need to produce higher-quality products at faster speeds fied global leader in next is fueling demand for robots and related deals generation smart manufacturing,” says JR Automation By Demitri Diakantonis CEO Bryan Jones. In 2018, Barnes Group Inc. (NYSE: B) purchased Organizations in designed to assist surgeons with positioning Gimatic SrL for $435 million. industries, ranging implants for each patient, which is expected The target develops robotic from manufactur- to produce less pain and faster rehabilitation. grippers, end-of-arm tooling ing to healthcare, “The U.S. market for robotics in orthopedics systems and sensors. are using M&A to is growing at a very rapid pace, and with the “In the manufacturing add automated addition of Omni’s technologies, we expect and logistics fields, there technology in their Corin to remain at the forefront of develop- has been a growing demand processing sys- ment in robotics and computer-assisted for automation because tems. Advances in surgery,” says Heny Minello, a principal in of decreased working age robotic technology Permira’s healthcare group. populations, intensifying are making it possible to complete more Robot manufacturers are also attract- global competition, and complex tasks at higher speeds and with ing interest from foreign buyers. Japenese further quality improvement improved control and outcomes. technology company Hitachi is buying JR requirements to prevent Among the recent deals of note: Sealed Automation Technologies from Crestview significant product recalls,” Air Corp. (NYSE: SEE) said it will buy Auto- Partners for about $1.4 billion in a deal. JR according to a Hitachi re- mated Packaging Systems, a manufacturer Automation builds production lines and lease. “As a result, the global of automated bagging systems, for $510 logistics systems using industrial robots for robot-based automation million. The target is known for its bagging the aerospace, automotive, consumer and market continues to expand, machines and pre-opened bags on a roll. food and beverage industries. The acquisi- with a high average growth The company, which has about in $290 mil- tion expands Hitachi’s presence in the U.S. rate exceeding 10 percent lion in annual sales, also offers recycled film robotics sector. per year.” M&A services. APS operates seven manufacturing facilities in the U.S. and U.K. “The addition of APS is well aligned with our Reinvent SEE goal of doubling our innovation rate over the next five years,” says Sealed Air CEO Ted Doheny. “This transaction expands the breadth of our automated solutions and sustainable packaging offerings, giving us access to growth opportunities in the markets we serve.” Sealed Air is known for making Bubble Wrap. In the healthcare sector, Permira-backed Corin Group has acquired Omni Orthopedics. The target makes robots that assist with knee

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14 Mergers & Acquisitions July/August 2019

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015_MAJ0719PCP_001_2019_MA_v1FA.indd 15 1 7/3/20192/28/19 9:54:07 9:26 AM 2019 Rising Stars of Private Equity Mergers & Acquisitions names 10 up-and-coming private equity pros

By Mary Kathleen Flynn, Demitri Diakantonis, Danielle Fugazy, Keith Button, and Mike Schnitzel

16 Mergers & Acquisitions July/August 2019 TheMiddleMarket.com

016_MAJ0719 16 7/8/2019 12:45:47 PM 2019 Rising Stars of Private Equity Mergers & Acquisitions names 10 up-and-coming private equity pros

By Mary Kathleen Flynn, Demitri Diakantonis, Danielle Fugazy, Keith Button, and Mike Schnitzel

The 10 private equity professionals featured in Mergers & Acquisitions’ 2019 Rising Stars of Private Equity share a common set of core values. They are passionate about building companies. They are naturally curious and interested in changing things for the better. They enjoy working with portfolio company managers, investment bankers and other deal team members. They appreciate the responsibility and autonomy their firms have given them. They are grateful for the leaders who have helped shape their careers, and they are generous with their own time when it comes to nurturing the next generation. Get to know the Rising Stars. They’re the future of private equity.

Cover Photography by Sasha Nialla

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says. “From managing all aspects of a deal process — from origination, valuation, negotiation and close — to being the sole representative for Branford on the road. I think these elements combined are really helpful to cultivate an environment where your opinion is not only expected, but truly valued.” Mentors have also played key roles, Collier says, naming John Castle, Lau- rence Lederer and Eric Korsten among those who have helped his career.

Austin Collier, senior associate, Branford Castle Partners The CEO factor Kevin Cunningham, managing director, LNC Partners Ultimate analyst “There’s nothing more exciting than Change agent working with CEOs and their man- Branford’s Austin Collier appreciates working with CEOs agement teams, and finding ways LNC’s Kevin Cunningham has played a key role in 30 to improve the performance of their and leveraging his analytical skills company,” says Collier about why he’s transactions, including co-leading OutSolve drawn to the private equity industry. Analyze this deals. Branford bought Drew Foam One experience he’s proud of is working Investing in the niche Austin Collier has already made his from Gladstone Investment Corp. with the CEO of Earthlite, a manufac- Kevin Cunningham’s “natural curios- mark on Branford Castle Partners. He Collier was the junior professional on turer of massage tables, to implement ity and resourcefulness are appar- came to the firm just as it had closed the deal from start to finish, creating the company’s first international sales ent in everything he does for LNC,” its first institutional fund, a pivotal a deal model and doing the valua- expansion project. says managing partner Matt Kelty. moment in Branford’s history. With tion analyses. He acted as the liaison “These attributes have allowed him an analytical background developed between diligence parties, the invest- Big picture to identify attractive niche industries previously when he served as an investment bankers, counsel and seller and Branford Castle is busier than ever and companies that are off the radar ment banking analyst at Duff & Phelps, buyer. Collier was also instrumental in after closing its first dedicated fund, screen of most others, and to develop Collier created valuation spreadsheets Branford’s purchase of Titan Production and Collier has benefited from being relationships with key leaders in those for Branford to track the carrying value Equipment, a manufacturer of produc- able to play different roles, and from areas.” Cunningham has focused on of each of its portfolio companies. tion equipment for the oil and gas staying nimble. the compliance/standards manage- “With an inaugural fund comes a lot industry. “In terms of the deal process itself, as ment sector through years of attending of work. I instituted a number of new a PE professional, you are in a unique conferences, reading trade magazines systems at Branford,” Collier recalls. “I am given a ton of position,” Collier says. “Your job is to and making direct contacts. “These Some examples include: implement- responsibility — and constantly keep the big picture top of efforts have enabled LNC to close three ing a method for conducting portfo- mind. At any given point in the pro- transactions in the industry outside of lio company valuations for monthly a high degree of cess, there could be up to 10 advisors traditional intermediary-led processes, internal purposes and for the annual autonomy.” involved — each of whom is focused which is particularly valuable in today’s audit; overhauling the firm’s customer on completing their individual work competitive environment,” Kelty says. relationship management system to Career advancement stream. It’s up to the PE professional streamline tasks and create efficiencies Management quickly identified to make sure all of these pieces come Feeling inspired across the firm; and creating Branford’s Collier as a key employee, due to his together.” M&A Cunningham graduated from the first summer analyst program. analytical thinking and emerging lead- University of Virginia, where a course ership skills. The firm promoted him on private equity and leveraged Many hats to senior associate from associate in buyouts taught by successful middle- Collier has been busy working on 2018. “I am given a ton of responsibility market PE investor John Kirtley piqued deals for the firm from various perspec- — and a high degree of autonomy to Cunningham’s interest in the field. tives. In 2018, Collier worked on two execute upon this responsibility,” Collier Upon graduation, Cunningham took

18 Mergers & Acquisitions July/August 2019 TheMiddleMarket.com

018_MAJ0719 18 7/8/2019 12:45:50 PM says. “From managing all aspects of a “A career highlight involved at- deal process — from origination, valua- tending the 20th anniversary dinner tion, negotiation and close — to being last year for a portfolio company, the sole representative for Branford on OutSolve.” Cunningham co-led the the road. I think these elements com- investment in the human resources bined are really helpful to cultivate an compliance service provider, a deal environment where your opinion is not that closed in 2016. He sourced the only expected, but truly valued.” deal outside of the traditional bank Mentors have also played key roles, process and has since led or co-led four Collier says, naming John Castle, Lau- acquisitions for OutSolve, as well as rence Lederer and Eric Korsten among helping to implement an equity option those who have helped his career. plan, expanding services offered and upgrading the firm’s office. Kevin Cunningham, managing director, LNC Partners The CEO factor Cunningham was a key player in “There’s nothing more exciting than Change agent the recent acquisition of diagnostic working with CEOs and their man- medical and health physics testing and agement teams, and finding ways LNC’s Kevin Cunningham has played a key role in 30 consulting services firm Phoenix Tech- to improve the performance of their nologies by LNC portfolio company company,” says Collier about why he’s transactions, including co-leading OutSolve West Physics. He led on all aspects of drawn to the private equity industry. the transaction, including initial meet- One experience he’s proud of is working Investing in the niche a job at Thomas Weisel Partners. The ings with sellers and due diligence, and with the CEO of Earthlite, a manufac- Kevin Cunningham’s “natural curios- firm had a $1.3 billion PE fund and raised a third-party senior debt facility. turer of massage tables, to implement ity and resourcefulness are appar- allowed investment banking analysts the company’s first international sales ent in everything he does for LNC,” like Cunningham to work with its PE Always on the lookout expansion project. says managing partner Matt Kelty. team on transactions. He joined LNC Cunningham enjoys the opportunity “These attributes have allowed him Partners in 2014 and was promoted to work with a wide variety of execu- Big picture to identify attractive niche industries from principal to managing director tives and entrepreneurs involved with Branford Castle is busier than ever and companies that are off the radar in December 2018 in recognition of his running LNC’s portfolio companies. He after closing its first dedicated fund, screen of most others, and to develop significant contributions to transac- also enjoys how PE fosters his natural and Collier has benefited from being relationships with key leaders in those tions, as well as team and systems curiosity. He once found an opportunity able to play different roles, and from areas.” Cunningham has focused on development. in the gas station compliance and test- staying nimble. the compliance/standards manage- ing market after spotting an inspection “In terms of the deal process itself, as ment sector through years of attending “The most rewarding sticker on a gas pump while pumping a PE professional, you are in a unique conferences, reading trade magazines part of the job is gas. This prompted him to do a deep position,” Collier says. “Your job is to and making direct contacts. “These dive into the sector, leading to several constantly keep the big picture top of efforts have enabled LNC to close three certainly seeing the investment opportunities. He also looks mind. At any given point in the pro- transactions in the industry outside of result of my work drive out for new medical service providers cess, there could be up to 10 advisors traditional intermediary-led processes, positive changes at our and tools when bringing his children or involved — each of whom is focused which is particularly valuable in today’s portfolio companies.” parents to medical appointments. on completing their individual work competitive environment,” Kelty says. stream. It’s up to the PE professional Cultivating the next generation to make sure all of these pieces come Feeling inspired Dozens of deals Cunningham is involved in the hiring together.” M&A Cunningham graduated from the Cunningham has been highly and training of junior employees. It’s a University of Virginia, where a course productive for LNC, playing a key role he takes seriously, as cultivation of on private equity and leveraged role in 30 deals since the end of 2014. new employees is particularly impor- buyouts taught by successful middle- “The most rewarding part of the job is tant at a small firm. Cunningham also market PE investor John Kirtley piqued certainly seeing the result of my work enjoys helping to develop the investing Cunningham’s interest in the field. drive positive changes at our portfolio perspectives of junior colleagues. M&A Upon graduation, Cunningham took companies,” Cunningham says.

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me to participate in all aspects of the dealmaking process, from the early incubation and conception of the idea, all the way through to the add-on acquisitions that we’ve been completing post-closing,” he says.

Culture of trust Domanic has opportunities at EOF that his peers at other PE firms don’t have, including running point on deals, he says. “I have plenty of friends in private equity, and a lot of folks at the Stephen Jeschke, principal, GTCR Shawn Domanic, vice president, Sterling Partners associate, senior associate and VP level Optimizer tend to have a pretty dedicated role Visionary or set of responsibilities. Having a lean team and a level of trust throughout GTCR’s Stephen Jeschke has backed broadband access Sterling Partners’ Shawn Domanic enjoys the Education our organization has allowed me to Opportunity Fund’s culture of trust take on responsibility as I see fit, and to rural areas and safety for commercial drivers overall our culture embodies that. No Investing in education Sterling, he worked at CHS Capital and task is too big or small for anyone on Identifying opportunities Sterling Partners’ Shawn Domanic its affiliates evaluating and manag- the team.” Stephen Jeschke stands out in many focuses on the Chicago firm’s Educa- ing PE investments. Domanic joined ways, including his ability to develop tion Opportunity Fund, or EOF. Doman- Sterling Partners in 2016, shortly after Beyond the deals relationships with management profes- ic describes himself as a builder and the launch of the $250 million EOF. He Domanic has worked on improving sionals and to identify and assess deal an optimizer: two personas that have was promoted to vice president of the back-office, financial and operational opportunities quickly within the tech- served him well as a private equity fund in 2018. functions of EOF’s initial investments, nology, media and telecommunications dealmaker. “Since my childhood years, including the National Research Center sector, says GTCR managing partner I’ve had a knack for trying to find a “Since my childhood for College & University Admissions, Craig Bondy. Jeschke combines sector better way to do something. Those in- years, I’ve had a knack an educational resource organization; expertise, a keen analytical approach terests in my early days have translated for trying to find a Panopto, an education video pro- and exceptional understanding and and carried over to where I am today, vider; and EOF’s constructed startup experience of the fundamental drivers and have carried over into my love of better way to do Amerigo, which supports international of business to see opportunities that working with teams to solve problems, something.” students in the U.S. others don’t. He asks the right ques- advance the ball and ultimately grow He also works with portfolio found- tions at the right times to formulate an better organizations that we invest in.” From conception to add-ons ers to develop strategic business plans; informed perspective about businesses. In October 2018, EOF invested in oversees industry research; and works Other side of the fence Big Blue Marble Academy, a 21-center with portfolio company boards. His Leading deals After earning his bachelor’s degree preschool business in the Southeast, research typically identifies a subsector, Jeschke joined the Chicago private at Boston College, Domanic worked in a transaction that Domanic had been market trends, players, size and poten- equity firm as a vice president in 2011 investment banking at Robert W. Baird working on since he joined Sterling. tial executives. M&A and was promoted to principal in & Co. and realized he’d rather be in Domanic’s role included geographic 2016. Prior to joining the firm, he was a private equity. “I admired the strate- markets scoring, boots-on-the-ground vice president at Bain Capital, and he gic process of researching an industry sourcing of targets, performing due dili- worked as an associate consultant at vertical, identifying interesting compa- gence on states and their regulations, Bain & Co. Jeschke holds an MBA from nies that are in that space and crafting and assisting after the deal closed with Harvard Business School and a BS in the investment thesis, versus sitting systems integration, financial report- finance from the University of Illinois at on the other side of the fence and just ing and due diligence for six add-on Urbana–Champaign. preparing materials,” he says. Prior to transactions. ”This transaction allowed At GTCR, Jeschke has led the com-

20 Mergers & Acquisitions July/August 2019 TheMiddleMarket.com

020_MAJ0719 20 7/8/2019 12:45:53 PM me to participate in all aspects of the Jeschke led the firm’s investment in dealmaking process, from the early MBI in 2017. As part of the deal, GTCR incubation and conception of the idea, and MBI acquired Northland Com- all the way through to the add-on ac- munication, a company that provides quisitions that we’ve been completing high-speed data, TV and voice services. post-closing,” he says. Since investing in MBI, the company has upgraded its network and has seen Culture of trust improvements in its growth path. Domanic has opportunities at EOF Jeschke is drawn to the businesses that his peers at other PE firms don’t in GTCR’s portfolio that serve less have, including running point on deals, populated areas. “I really like the rural he says. “I have plenty of friends in broadband industry, and we are bring- private equity, and a lot of folks at the ing connectivity to rural America at the Stephen Jeschke, principal, GTCR associate, senior associate and VP level same time,” he adds. tend to have a pretty dedicated role Visionary or set of responsibilities. Having a lean Driver safety team and a level of trust throughout GTCR’s Stephen Jeschke has backed broadband access Jeschke led the acquisition of Lytx, a our organization has allowed me to provider of video safety telematics for take on responsibility as I see fit, and to rural areas and safety for commercial drivers commercial fleets. Using his analytical overall our culture embodies that. No skills to understand industry dynamics, task is too big or small for anyone on Identifying opportunities pletion of seven deal transactions with Jeschke identified a number of growth the team.” Stephen Jeschke stands out in many approximately $6 billion of enterprise opportunities for Lytx. ways, including his ability to develop value. Jeschke is currently a director “I’m very proud of Lytx,” Jeschke Beyond the deals relationships with management profes- of Lytx and Mega Broadband Invest- says. “The company has grown like a Domanic has worked on improving sionals and to identify and assess deal ments, or MBI, and is actively involved rocket ship, has one of the best cus- back-office, financial and operational opportunities quickly within the tech- with CommerceHub. He was previously tomer value propositions I have ever functions of EOF’s initial investments, nology, media and telecommunications a director of past GTCR investments seen and a tremendous management including the National Research Center sector, says GTCR managing partner AssuredPartners, Avention and Rural team led by a tremendous leader. They for College & University Admissions, Craig Bondy. Jeschke combines sector Broadband Investments. also help to make our roads safer and an educational resource organization; expertise, a keen analytical approach save lives, which is pretty awesome.” Panopto, an education video pro- and exceptional understanding and “Lytx has grown like a vider; and EOF’s constructed startup experience of the fundamental drivers Paying it forward Amerigo, which supports international of business to see opportunities that rocket ship. They also “I very much believe this is an ap- students in the U.S. others don’t. He asks the right ques- help to make our roads prenticeship business,” Jeschke says. He also works with portfolio found- tions at the right times to formulate an safer and save lives.” “You start learning the day you arrive, ers to develop strategic business plans; informed perspective about businesses. and it never stops. My biggest contribu- oversees industry research; and works tion to my firm and the industry is to with portfolio company boards. His Leading deals TMT expertise foster other’s development in the same research typically identifies a subsector, Jeschke joined the Chicago private Initially, Jeschke learned about tech- way that my development has been market trends, players, size and poten- equity firm as a vice president in 2011 nology from senior members of GTCR’s fostered by others. This starts by help- tial executives. M&A and was promoted to principal in TMT team. Jeschke has also learned ing with recruiting, but is much more 2016. Prior to joining the firm, he was a a lot from GTCR’s portfolio company about helping our young associates to vice president at Bain Capital, and he CEOs. “Each of their leadership styles develop the skills they need to be suc- worked as an associate consultant at has been unique, but has provided me cessful long term.” M&A Bain & Co. Jeschke holds an MBA from with insights into how successful execu- Harvard Business School and a BS in tives build and lead great companies,” finance from the University of Illinois at he says. Urbana–Champaign. Leveraging the firm’s relationships At GTCR, Jeschke has led the com- and expertise in the cable industry,

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es as well as building relationships. She quickly learned the challenge is figuring out to partner with the right managers and subsequently invest in and grow businesses together. She appreciates the platform Huron gave her as well. “At Huron, we are empowered to think outside the box, and this enables us to be flexible and create opportunities for both business owners and ourselves as investors, which is easily my favorite part of the job,” says Lalli.

Danielle Lalli, vice president, Huron Capital “We are empowered to Jason Mironov, director, TA Associates The closer think outside the box, Strategist and this enables us to Huron Capital’s Danielle Lalli has closed 10 add-on be flexible and create TA’s Jason Mironov earned three promotions after acquisitions, securing her spot on the execution team opportunities.” working on DiscoverOrg, Procare and Conservice

Execution prowess Art of the add-on Extending firm culture Huron Capital’s Danielle Lalli has Lalli recently quarterbacked three Talent on tap TA Associates’ Jason Mironov quickly become a stand-out member of add-on acquisitions almost simultane- Lalli has been instrumental in is lauded as a “superstar” by Brian the firm’s execution team. She holds the ously for Pueblo Mechanical & Controls revamping Huron’s associate recruit- Conway, chairman and managing title as the most active vice president Inc., an HVAC repair and replacement process. She took the initiative partner of the Boston firm. In addition in terms of closing add-on acquisi- ment company. Lalli led the financing on soon after joining the firm, because to Mironov’s role in TA’s investments, he tions for the portfolio. In her two years process for the deals, managed the she felt the recruitment processes in works closely with management teams at the firm, Lalli has closed 10 add-on diligence streams, prepared the inter- place were too slow in today’s tight job on recruiting, sales strategy, pricing, acquisitions for two different platform nal materials for Huron’s investment market. She is now managing the firm’s marketing and human resources efforts. companies and has two more under committee and worked with the owners outreach and selection process for He also has excellent analytical and letter of intent. Lalli is also the first and management team at Pueblo to associates, which has allowed Huron operational skills, and has developed female execution hire at Huron. ensure success. She then helped Pueblo to broaden its reach and bring young key relationships with many executives management get ready to integrate the talent on board. at portfolio companies, helping to ex- Career track three companies that were acquired in Lalli volunteers at Detroit’s Belle tend the firm’s culture, Conway says. Since joining Detroit-based Huron, a period of five weeks. Impact Fund, an early-stage fund that Lalli has been promoted from VP-1 to “I am very proud of the work I have invests in high-growth companies in Three deals, three promotions VP-2 and is on track for further promo- completed at Pueblo. It has been the underserved market of women-led Mironov was an undergrad at the tion. Prior to joining the firm, Lalli was extremely rewarding to see this com- companies. She reviews financial state- University of Michigan, where he was a PE investment associate at American pany evolve from a small business at ments, business plans and financial student body president. He earned an Securities. In this role, she conducted inception to the larger enterprise it is projections to help the Belle team as- MBA from Harvard Business School. due diligence to evaluate investment today. We have invested in Pueblo with sess opportunities. “It is very important Prior to TA, he was an investment bank- opportunities while providing support a growth mindset, stimulating job cre- to me to help empower female business ing analyst at J.P. Morgan in New York to existing portfolio companies. She ation and positioning them for a strong leaders across industries, and to be and Sub-Saharan Africa. Since joining started her career as an investment and successful future,” says Lalli. able to leverage my PE background TA in 2012, Mironov has been promoted banking analyst for UBS in the Power & and skillset to enable direct investment three times, each time following a deal Utilities group. Lalli is a graduate of the Love of learning in these companies is a privilege.” M&A he worked on: from vice president to University of Michigan and received an Lalli was initially attracted to private senior vice president, following TA’s 2014 MBA from Harvard Business School. equity because she loved learning investment in DiscoverOrg; to principal about different industries and business- in 2015, following an investment in Pro-

22 Mergers & Acquisitions July/August 2019 TheMiddleMarket.com

022_MAJ0719 22 7/8/2019 12:45:56 PM es as well as building relationships. She provider of revenue services to airlines. quickly learned the challenge is figuring “Watching four founder-owned out to partner with the right managers businesses, where I helped originate and subsequently invest in and grow and execute an investment, fundamen- businesses together. She appreciates tally reshape their markets and create the platform Huron gave her as well. countless opportunities around the “At Huron, we are empowered to think world, has been extraordinarily reward- outside the box, and this enables us to ing,” Mironov says. be flexible and create opportunities for both business owners and ourselves as Passion for private equity investors, which is easily my favorite Mironov was drawn to entrepreneur- part of the job,” says Lalli. ship since high school, starting and running businesses of his own to help Jason Mironov, director, TA Associates “We are empowered to pay for college. After a short stint in think outside the box, Strategist investment banking, he realized how private equity offered an opportunity to be and this enables us to TA’s Jason Mironov earned three promotions after a part of companies “in a very organic be flexible and create and emotional way,” he says. He enjoys working on DiscoverOrg, Procare and Conservice opportunities.” PE’s unique involvement in creating opportunities and deploying strategic Extending firm culture care Software; and to director in 2018, thinking, and in working with self-made Talent on tap TA Associates’ Jason Mironov after an investment in Conservice. business owners. “I developed a passion Lalli has been instrumental in is lauded as a “superstar” by Brian for partnering with entrepreneurs, and revamping Huron’s associate recruit- Conway, chairman and managing “Watching four founder- I knew that I wanted to be a part of ment process. She took the initiative partner of the Boston firm. In addition owned businesses growing profitable companies that were on soon after joining the firm, because to Mironov’s role in TA’s investments, he exploring the next frontier of success.” she felt the recruitment processes in works closely with management teams fundamentally reshape place were too slow in today’s tight job on recruiting, sales strategy, pricing, their markets and create Growing through mentors market. She is now managing the firm’s marketing and human resources efforts. countless opportunities Beyond dealmaking, Mironov helps outreach and selection process for He also has excellent analytical and around the world has lead the associate training program at associates, which has allowed Huron operational skills, and has developed TA and contributes to recruiting. He also to broaden its reach and bring young key relationships with many executives been extraordinarily helps with TA’s marketing and serves on talent on board. at portfolio companies, helping to ex- rewarding.” the firm’s technology committee. He has Lalli volunteers at Detroit’s Belle tend the firm’s culture, Conway says. mentored associates, as well as students Impact Fund, an early-stage fund that Originator and executor at Michigan and Harvard interested in invests in high-growth companies in Three deals, three promotions Mironov originated and co-spon- entering the PE industry. Mironov credits the underserved market of women-led Mironov was an undergrad at the sored TA’s investment in DiscoverOrg, his TA partners and colleagues for his companies. She reviews financial state- University of Michigan, where he was provider of sales and marketing data growth, including Michael Berk, manag- ments, business plans and financial student body president. He earned an and analytics; he originated and led ing director; Todd Crockett, managing projections to help the Belle team as- MBA from Harvard Business School. TA’s majority investment in Procare director; Kurt Jaggers, senior advisor; sess opportunities. “It is very important Prior to TA, he was an investment bank- Software, a software and payments Ethan Liebermann, director (and a 2018 to me to help empower female business ing analyst at J.P. Morgan in New York solutions provider; and he helped origi- Rising Star); and Jason Werlin, manag- leaders across industries, and to be and Sub-Saharan Africa. Since joining nate and co-sponsor TA’s investment in ing director. “The mentorship and guid- able to leverage my PE background TA in 2012, Mironov has been promoted Conservice, a provider of utility expense ance I have received is far reaching,” he and skillset to enable direct investment three times, each time following a deal management software. says. “In addition to training on how to in these companies is a privilege.” M&A he worked on: from vice president to With all three companies, Mironov be a good investor, board member and senior vice president, following TA’s 2014 helped recruit multiple board members partner, I’ve learned a great deal about investment in DiscoverOrg; to principal and senior executives. He also co-spon- life outside of the office.” M&A in 2015, following an investment in Pro- sored an investment in Plusgrade, a

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Family ties Oh is a first-generation Korean American who immigrated to Los An- geles from Seoul, South Korea, when he was seven. “My interest in the private equity industry started when I saw my parents manage their small dry clean- ing business in South Los Angeles,” Oh recalls. “As a teenager, I would overhear conversations about low revenue for the month or rising costs and HR matters. I realized that businesses, despite the size, were complex and dynamic. I James Oh, partner, Transom Capital Group also understood that these businesses Great communicator were the livelihood of people working in them, not just the owner. Fast-for- Transom’s James Oh has closed 10 deals, including warding to now, I like the PE industry because as a partner of a general- SemiTorr and Loud Technologies ist firm with functional operational expertise, I get to learn about a variety Intellectual and emotional partner in January 2019. He was also of different businesses and identify Transom Capital Group’s James Oh made head of M&A. ways to improve efficiencies in them. I is adept at helping sellers come to grips also understand that the people that with the true value of their assets. Oh “I get to learn about work, no matter what level or title, have is “one of the very best communica- equal importance in making a business tors of why the facts create the value a variety of different successful.” and furthermore, why Transom Capital businesses and identify One especially dramatic lesson is the best purchaser of the business,” ways to improve came in 1992, when the family store explains managing partner Ty Schultz. efficiencies in them.” burned to the ground in the riots fol- “Specifically, James has a unique lowing the Rodney King verdict. “Per- capacity to understand the big picture, severing through these challenges has work through the details and then Taking the lead given James incredibly high integrity leverage these understandings to look Oh served as deal lead on three and a work ethic that he leverages the seller in the eye and explain firmly, recent significant transactions. He used today,” Schultz says. but with compassion, his position. In a his analytical bent and market knowl- world filled with smart IQ-only types, edge to apply Transom’s model, which Walk-up songs James stands out from the crowd as focuses on improving strategy, creating Oh volunteers on the youth basket- someone who sees both the intellectual topline growth, decreasing waste and ball and baseball circuits. “Everyone and emotional elements in every deal.” improving operations. He determined wants to be on his team,” Schultz says. whether Transom should formally “From personalized ‘walk-up songs’ From CPA to M&A indicate interest in purchasing energy for elementary schoolers, to compas- Oh graduated with a degree in product distributors SemiTorr, Gene sionately shouldering ‘real-life’ issues, international economics from UCLA. He Juarez Salon & Spas and all of the James embodies the man, the hus- started his career as a certified public audio and musical instrument brands band, the father and coach each of us accountant and learned his dealmak- of Loud Technologies. He led the team would like to be.” M&A ing skills at PwC, Wells Fargo and The conducting all aspects of due diligence, Gores Group. managed third-party advisors and was Oh landed a job as a principal at the main contact with key manage- Transom in 2015, and was promoted to ment personnel.

24 Mergers & Acquisitions July/August 2019

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involved in helping Klaviyo scale the business and navigate its rapid growth trajectory, including assistance in en- hancing the management team.” Popova leads Summit’s efforts in industrial automation, and this work helped to drive the firm’s investment in Markforged, a rapidly growing manufacturer of industrial 3D printers and printing systems. Popova was “instrumental in developing and articulating a thesis around the additive manufacturing sector and its transformational Sophia Popova, vice president, Summit Partners role in ‘Industry 4.0,’ a new chapter of Tech maven technologically-driven industrial automation and digitization.” Summit Partners’ Sophia Popova honed her acumen for Top talent investing in tech companies by working at them Popova leads the recruiting effort for Summit’s Boston technology team, Connecting with founders she advised numerous student founder- helping to attract top talent to the firm. Summit Partners’ Sophia Popova has led startups. She joined Summit as a She implemented a candidate assess- distinguished herself as a smart and vice president in 2017. “There is nothing ment tool that incorporates the firm’s thoughtful technology investor quickly, more exciting than helping category- core values into the hiring process. says managing director Scott Collins. In leading businesses scale faster,” Popova is generous with her time in less than two years, Popova has played Popova says. “I was drawn to growth mentoring her colleagues on the tech- an active role in four Summit invest- equity, because it allows me to analyze nology team and beyond, Collins says. ments, representing more than $450 what makes businesses tick.” Popova is committed to fostering an million in invested capital. “Sophia has inclusive community at Summit. She a keen talent for identifying innovative “There is nothing more serves on the firm’s diversity committee growth-stage companies, building a exciting than helping and has helped recruit several women trusted rapport with entrepreneurs and to the investment team. management teams, and in serving as category-leading an insightful and hard-working partner businesses scale faster.” Positive impact post-investment,” Collins says. “Sophia Popova has been an active propo- leverages her technical background Industry 4.0 nent of the positive impact of growth to connect quickly with founders and Popova played a key leadership role equity and in supporting individuals en- entrepreneurs in a unique way.” in Summit’s $150 million investment in tering the industry. At Harvard Business Klaviyo, a SaaS data and marketing School, she worked with Clay Chris- Startup chops automation platform that serves more tensen and Derek van Bever, research- Popova developed her investment than 15,000 brands. Popova’s “deep un- ing the impact of venture capital on acumen through serving in product derstanding of the consumer marketing economic development for a chapter management and business develop- landscape and data intensive technolo- in Christensen’s book, The Prosperity ment roles at startups, including Con- gies helped to build a credible and Paradox. She has also served on HBS tactive (acquired by Fuze in 2015) and strong relationship with the company panels covering growth equity. She is Recombine (acquired by CooperSurgi- founders and positioned Summit as an active member of Women in Invest- cal in 2016). While at Harvard Business the investor of choice for Klaviyo’s first ing, a Boston network that hosts events School, Sophia was an investment major round of funding,” Collins says. for women in private equity. M&A partner at the Dorm Room Fund, where “Post-investment, Sophia is actively

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In June, Tripathi led the firm’s investment in Procurement Advisors, a data-enabled purchasing organization that is focused on the maintenance, repair and operating supplies sector. Procurement works with more than 500 independent and private equity-backed companies in more than 11,000 locations throughout the world. In January, Tripathi co-led Sage- mount’s sale of Single Digits to GI Partners. Single Digits provides secure managed wireless network services Pavan Tripathi, principal, Bregal Sagemount across the hospitality, student housing Creative thinker and transportation sectors.

Bregal Sagemount’s Pavan Tripathi looks at tech deals Flexible mandate “Sagemount is a unique growth-stage through “many different lenses” private equity firm with a very flexible mandate,” Tripathi explains. “That Decision making moted again to principal in 2017. Most flexibility allows all of us at Sagemount Pavan Tripathi’s knowledge, creativity recently, he was with Goldman Sachs’ to look at deals in technology and and composure allow him to manage (NYSE: GS) merchant banking divi- tech-enabled services with many dif- adeptly the responsibilities required by sion. Tripathi graduated summa cum ferent lenses. I have invested across a private equity professional, according laude from the University of California, data infrastructure, enterprise software, to those who work with him, including Los Angeles, with degrees in electrical information services, healthcare tech- attorneys at law firm Goodwin. Tripathi engineering and economics and holds nology, tech-enabled business services oversees the New York PE firm’s growth an MBA from the Stanford Graduate and specialty finance. Our ability to be initiatives and is a key decision maker School of Business. a majority buyout, minority equity, or when it comes to expanding into new credit investor has been great.” sectors. He is also in constant communi- “A big part of cation with Sagemount’s lawyers, advis- Sagemount’s flat Next generation ers and investors, using their expertise to culture is intellectual Tripathi enjoys giving students and help improve the internal processes and younger team members an honest ap- workflows at Sagemount. rigor, where good ideas praisal of what his job entails on a daily and well-researched basis. “I emphasize spending time with Path to growth perspectives are my younger colleagues and college/ “There is always something new to expected from the business school students, providing any explore – industries, companies, busi- guidance, input, or advice I can, and ness models, innovations – which keeps whole team.” personally learning a lot from them as the learning curve steep and the work well,” Tripathi says. “I strongly believe fascinating,” Tripathi says. “There is also Leading deals that helping them succeed will play a great mix of technical challenges, “A big part of Sagemount’s flat a large part in the continued success creative thinking, and relationship culture is intellectual rigor, where good of Sagemount and make the private building that constantly push me to ideas and well-researched perspectives equity industry stronger.” M&A grow and expand my skillset.” are expected from the whole team,” Tripathi joined Sagemount in 2012 Tripathi says. “As a result, I’ve been able as a senior associate, was promoted to to grow as an investor and a leader at vice president in 2013 and was pro- Sagemount.”

28 Mergers & Acquisitions July/August 2019

028_MAJ0719 28 7/8/2019 12:46:01 PM Register Today! September 4 - 6, 2019 | Detroit, Michigan | acg-glcc.org

With a schedule full of educational and networking opportunities, the Great Lakes Capital Connection is the region’s premier event for buyers, sellers, lenders and middle market professionals. Each year, GLCC attracts over 1,000 of the top professionals in the M&A community. The conference is a collaborative effort between seven ACG chapters from the Midwest & Mid-Atlantic regions.  Connect with over 1,000 influential M&A professionals  Source new deals and opportunities  Learn industry best practices for growth, acquisitions  Network with fellow ACG members and more  Experience Detroit’s vibrant business community  Hear from renowned speakers and panelists

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029_MAJ0719ad M&A mag 8x11 29 v2-nodrop.indd 1 7/3/20194/26/19 9:54:13 10:25 AM Cover Story

like management skills and executive presence. Since day one at FP, I have always enjoyed having a seat at the table and on the boards of my portfolio companies.”

Carveouts and acquisitions Wang served as deal quarterback for FP’s carveout of Quest Software from Dell Software Group. Quest Solutions helps companies of all sizes reduce the time and money they spend on IT administration and security, so Christine Wang, principal, Francisco Partners they have more time to focus on, and Quarterback invest in, business innovation. “I’m very proud that we were able to return Francisco Partners’ Christine Wang led the multifaceted that business to growth and foster an accelerated cadence of new product carveout of Quest Software from Dell Software Group releases,” Wang says. She also led FP’s acquisition of a Complex plays successful,” explains Wang. “Firms had majority stake in Prometheus Group, a Francisco Partners’ Christine Wang varied investing approaches, and I provider of enterprise asset manage- has demonstrated her technical exper- found this very dynamic and intriguing.” ment software. “In less than three years, tise, quick wit and confidence by leading Prior to joining FP in 2015, Wang I helped lead four add-on acquisitions some of the most complex deals in the worked at PE firm Advent International, (the company’s first ever M&A transac- San Francisco firm’s history, including where she evaluated private equity tions), which broadened the platform the multifaceted carveout of Quest Soft- investments in the business services, and helped the company better serve ware from Dell Software Group, which financial services and technology sec- its customers.” FP acquired in 2016. tors. In early 2019, FP promoted her “Christine is someone you can count to principal from vice president. “My Coaching on to drive something to the finish line favorite part of my job is working with Wang has developed into a sig- – she balances rigor with pragmatism, a wide variety of management teams,” nificant ambassador for the firm. She has great investment judgment and Wang says. co-led FP’s associate recruiting efforts knows how to dig in effectively to get in 2018 and is recognized as a men- to the right answer,” says Dipanjan “DJ” “My favorite part of tor and sponsor for many of FP’s vice Deb, co-founder and CEO. “She has my job is working presidents and associates. also earned the trust and respect of our “Christine is very generous with management teams with her direct, ap- with a wide variety of her time and truly has a people-first proachable style.” management teams.” attitude in everything she does,” says co-president Ezra Perlman. Wang is Varied approaches Professional development also involved in investment professional Wang joined the private equity in- “One of the things I really appreciate networks and leads IWin, a group of dustry after spending three years in the about Francisco Partners is the firm’s women investors. M&A financial institutions group at J.P. Mor- focus on professional development gan. “It was there that I got exposure and continuous improvement,” Wang to a number of private equity firms and says. “This includes exposure to a wide had the opportunity to see different variety of real-life deal experiences, as buyers reach very different conclusions well as training programs and work- on how they could make an investment shops focused on cultivating things

30 Mergers & Acquisitions July/August 2019

030_MAJ0719 30 7/8/2019 12:46:03 PM Guest Article Post-close talent playbook

Before the transaction even closes, the new private equity owner should set expectations and begin to establish trust

By Dan Hawkins and Todd Fryling

In today’s accelerated private eq- bers who may not be on board. CEO on a game plan that will develop uity environment, a post-close talent and improve both key individual lead- playbook is critical. This six-month plan 3. Assess key leadership talent ers and the collective executive team’s should comprise these six components: Within the first 90 days, conduct performance while also identifying individual assessments of key execu- the areas where investments will be 1. Establish trust before day 1 tives, including the CEO and the top required to accelerate needed change. Trust is a vital component of any 4-5 players on the team, to determine The plan should clearly articulate any successful relationship, even more strengths, gaps and whether they can forthcoming changes to the executive so between the PE firm and its new scale to deliver against the proposed team, operating model or organization portfolio company. It’s important to set growth goals. At the same time, review design, while clarifying roles and ac- expectations and prepare the leader- and consider the performance of the countabilities. ship team for what is to come before management team as a whole, examin- the transaction is closed. Ensure the ing how they function, debate, tackle 6. Make it so management understands that evalu- tough issues, hold each other account- With your assessment complete and ating current capabilities is an impor- able and make decisions. your action plan in hand, it’s time to tant part of the value creation formula. execute. Speed is critical to ensuring Position yourself and your partners 4. Understand the organization’s that the organization can gain traction as resources capable of identifying capacity to execute and deliver on expected financial per- opportunities to build greater strength During the 60-120 day period, it is formance. Most organizations expect in leadership, team performance and critical to gain an understanding of some change soon after a new PE part- organization effectiveness. the organization’s capabilities beyond ner takes stage, so it is important to not the top management team. Work with miss the window. Pull the trigger on the 2. Clearly define success management to create an organization tough decisions quickly and confi- Within the first 30 days, facilitate a scorecard that breaks the agreed-upon dently, keeping in mind that the longer strategy development and alignment strategic plan into a tangible deliver- you wait, the deeper the problem may session with the management team to able and required capabilities. Conduct become, putting your investment thesis ensure there exists a clear understand- an objective audit on critical areas at risk. ing of priorities and the plan for the such as organization structure, culture, When proactively discussed and business. Identify the capabilities that decision-making, performance man- planned early in partnership with man- will be required now and in the future agement and accountability. agement teams, PE deal partners can to deliver on the business priorities. objectively and proactively determine Openly address and resolve any in- 5. Pull it together the right leadership and organization consistencies and conflicting points of By month six, you should have co- roadmap to deliver on their expected view. The session will be critical in both alesced all the insights into a concrete value creation plans. M&A articulating expectations and helpful action plan that can be executed for identifying leadership team mem- quickly. Achieve agreement with the

Dan Hawkins and Todd Fryling are with Summit Leadership Partners, a leadership and organization development consulting firm

TheMiddleMarket.com July/August 2019 Mergers & Acquisitions 31

031_MAJ0719 31 7/3/2019 2:02:19 PM His answer was to buy a duplex apartment in Miami and establish his investment firm, A-Rod Corp. He quickly parlayed the initial investment into thousands of apartment units. But that was just the beginning. “The greatest break in my business career was when I met Stuart,” Rodriguez said, referring to Stuart Zook, who previously worked with Sam Zell at Equity Residential. Today, Zook serves as a principal at Rodri- guez’ Monument Capital Management and Monument Real Estate Services. “We’ve done 82 deals so far and made money on 79 of them,” Rodriguez said. “Stuart is a great manager. I believe in investing in jockeys, not horses.” A-Rod Corp currently identifies, originates and manages investments across a broad array of industries, including real estate, sports and well- EISNERAMPER ness, media, and entertainment. “With a flexible and opportunistic investment mandate, the firm focuses on A-Rod talks Ice Shaker, NRG eSports, long-term opportunities, where it can add value to create superior risk- TruFusion and Jennifer Lopez adjusted returns,” explains the firm’s website. Led by Rodriguez and a team Former Yankees star Alex Rodriguez shared his invesment strategy with of seasoned investment profession- Charles Weinstein, CEO of EisnerAmper, at the accounting firm’s conference als, the firm manages internal and external capital. By Mary Kathleen Flynn Patient capital Asked to describe his investment Alex Rodriguez is best known as the thesis, which shares much with other there that he learned to play baseball thesis, Rodriguez said he’s looking New York Yankees star who hit 696 middle-market investors; how he’s – “after I did my homework.” It’s an or- for “A great product, great leadership home runs over the course of his 22- helping singer/dancer/actress Jennifer ganization he supports today through that’s experienced, with track record, year baseball career, but today he’s Lopez (to whom he became engaged his philanthropy. and we want to go out and scale.” focsed on his role as the founder and in March) transition from licensing her Growing up with limited means A-Rod Corp invests in the middle CEO of A-Rod Corp. brands to owning them; and how one made Rodriguez, now 43, sensitive to market, passing on bigger deals, such Rodriguez discussed his investment day he might buy a baseball team. financial issues from an early age. He as Uber, he said. Sounding like many a strategy when he spoke at EisnerAmp- The fourteen-time Major League was first motivated to invest back in middle-market private equity investor er’s 4th annual Alternative Investment Baseball All-Star recalled growing up 2003, when he was 28. He said he was and likening his approach to the fam- Summit. Charles Weinstein, CEO of in Miami, while his mom worked two shocked to learn that most profession- ily office model, Rodriguez said, “We EisnerAmper, interviewed Rodriguez jobs, “as a secretary in the morning al baseball players earn 90 percent play really well with companies on the about a range of topics, including the and serving tables at night.” Every day of their total lifetime income between $1 billion mark. We like fourth inning baseball player’s childhood as the after school, he headed to the Boys the ages of 20 and 30. “What hap- companies at first inning prices. We’re son of a single mom; his investment & Girls Club of Miami-Dade. It was pens between 31 and 80?,” he worried. patient capital, with no pressure of

32 Mergers & Acquisitions July/August 2019 TheMiddleMarket.com

032_MAJ0719 32 7/3/2019 2:08:16 PM His answer was to buy a duplex selling in downturns.” after sports, it’s incredibly important apartment in Miami and establish One recent example: While serving to be proactive and save early on.” He his investment firm, A-Rod Corp. He as a guest judge on CNBC’s Shark favors a program that would require quickly parlayed the initial investment Tank, Rodriguez backed Ice Shaker, younger players to save 10 percent of into thousands of apartment units. But an insulated bottle maker founded their income. that was just the beginning. by former National Football League “The greatest break in my busi- fullback Chris Gronkowski. “Freak of nature” ness career was when I met Stuart,” Rodriguez has his eye on the future, Rodriguez is at a pivotal point in his Rodriguez said, referring to Stuart with some of the investments he’s personal life, with his upcoming mar- Zook, who previously worked with most excited about aimed at younger riage to Lopez. When asked by this Sam Zell at Equity Residential. Today, audiences. In addition to backing UFC reporter how Lopez figures into A-Rod Zook serves as a principal at Rodri- fitness centers and TruFusion studios, Corp, Rodriguez said that he preferred guez’ Monument Capital Management A-Rod Corp recently invested in NRG to maintain a “Chinese wall” between and Monument Real Estate Services. eSports. “When younger people told business and romance, but Lopez “We’ve done 82 deals so far and made me about eSports, I didn’t even under- urged him to help her. “Jennifer would money on 79 of them,” Rodriguez said. stand what they were telling me. ‘You listen to me have business conversa- “Stuart is a great manager. I believe in watch kids play video games. Where tions on the phone, and when I’d get investing in jockeys, not horses.” are the sports?,’ I said. ‘That’s the off, she’d say, ‘You own all this stuff. I A-Rod Corp currently identifies, sport,’ they said.” don’t own anything.’” originates and manages investments Rodriguez is mindful that things Lopez, whom Rodriguez described across a broad array of industries, change rapidly. He sold his Mercedes- admiringly as a “freak of nature,” including real estate, sports and well- Benz dealerships in 2014, once he real- earns money through a wide array of EISNERAMPER ness, media, and entertainment. “With ized that millennials buy fewer cars, revenue streams, including sales of a flexible and opportunistic invest- thanks to services from Uber and Lyft. her music and concert tickets, earn- ment mandate, the firm focuses on ings from participation in TV shows A-Rod talks Ice Shaker, NRG eSports, long-term opportunities, where it can $4B business on the table and movies, and fees from endorse- add value to create superior risk- One idea he’s been mulling (and ment deals and sales of consumer TruFusion and Jennifer Lopez adjusted returns,” explains the firm’s that Major League Baseball would merchandise, like her line of clothing website. Led by Rodriguez and a team do well to consider) is a subscription sold through Kohl’s. J-Lo earned $47 Former Yankees star Alex Rodriguez shared his invesment strategy with of seasoned investment profession- service that would broadcast on-the- million in 2018, according to Forbes, Charles Weinstein, CEO of EisnerAmper, at the accounting firm’s conference als, the firm manages internal and field activity, such as batting practice, and her net worth is an estimated external capital. from 4:00 to 7:00 pm. “Baseball is in $400 million, according to Celebrity the entertainment business,” Rodri- Net Worth. But the primary business Patient capital guez said. “There should be cameras model for much of the revenue has Asked to describe his investment everywhere, and you could get an been licensing. Rodriguez is help- there that he learned to play baseball thesis, Rodriguez said he’s looking alert when Aaron Judge is hitting. This ing her transition to an ownership – “after I did my homework.” It’s an or- for “A great product, great leadership is the low-hanging fruit. We’re leaving model. ganization he supports today through that’s experienced, with track record, a $4 billion business on the table.” He is cognizant of the influence the his philanthropy. and we want to go out and scale.” Might he buy a sports team?, he power couple can wield. “Ten to fifteen Growing up with limited means A-Rod Corp invests in the middle was asked by an audience member. years ago, big meant big, but today, made Rodriguez, now 43, sensitive to market, passing on bigger deals, such Not now, he answered, saying he was small can mean big,” he said. Lopez financial issues from an early age. He as Uber, he said. Sounding like many a having too much fun and was too has a huge presence on social media, was first motivated to invest back in middle-market private equity investor busy with all the other things he’s do- where she has more than 95 million 2003, when he was 28. He said he was and likening his approach to the fam- ing. “To own a team, I’d have to be all- followers on Instragram alone. shocked to learn that most profession- ily office model, Rodriguez said, “We in. But maybe one day. And it would “Jennifer and I have a competitive al baseball players earn 90 percent play really well with companies on the be a baseball team.” advantage between the both of us, of their total lifetime income between $1 billion mark. We like fourth inning When asked what advice he would and we can be disruptive,” Rodriguez the ages of 20 and 30. “What hap- companies at first inning prices. We’re give to younger players, Rodriguez said. “We can have a global impact in pens between 31 and 80?,” he worried. patient capital, with no pressure of said: “In order to have a great life 30 seconds.” M&A

TheMiddleMarket.com July/August 2019 Mergers & Acquisitions 33

033_MAJ0719 33 7/3/2019 2:08:16 PM Mergers & Acquisitions on Facebook for the latest news and trends in the middle-market industry.

034_MAJ0719d34486_M&A_FB_HouseAd_7.875X10.5_with 34 bleeds.indd 1 7/3/20198/30/18 9:54:14 12:54 AMPM attacked cause a “seri- ous” disruption of Asco’s activities and its sites in Belgium, Canada, Ger- many and the U.S. were stopped. Spirit AeroSystems won EU approval for the deal in March, but the acquisition has yet to be completed. Thorough cybersecurity assessments that include utilizing third-party audits

BLOOMBERG NEWS can often help avoid these types of issues, said Joe Cardamone, senior infor- Cybersecurity risks are mation security analyst and North America privacy threatening deals officer for Haworth Inc., a designer and manufacturer Recent acquisitions highlight the threat that cyber risks can pose of office furnishing prod- to a company’s reputation and bottom line ucts in Holland, Michigan.

By Bloomberg News “Treat it like you are buying Cybersecurity issues are increasingly to monitor and control access to their a used car. I’d becoming a concern in mergers and acqui- networks. still want to look sitions, a new survey shows, and lapses can “Cybersecurity is a challenge for every underneath the jeopardize deals or haunt purchasers long organization, and risk factors are chang- after the deal is done. ing all the time,” Cullivan said. “It’s about hood.” Of more than 2,700 information technol- making sure you put as much energy into it ogy and business decision makers surveyed up front.” “It’s not an intangible by Forescout Technologies Inc. in seven Recent acquisitions highlight the threat risk. It’s a very tangible countries, 53% reported that their organi- that cyber risks can pose to a company’s thing and true money that zation had encountered a critical cyber- reputation and bottom line. can be lost,” said Car- security issue or incident that put an M&A Verizon Communications Inc. acquired damone, who has been deal in jeopardy. And 65% of respondents Yahoo’s Internet properties in 2017 at a involved in Haworth’s said they had experienced buyers’ remorse $350 million discount after security breach- acquisition of at least six because of cybersecurity concerns after es surfaced at the web company. And companies. “Treat it like closing a deal. Marriott International Inc. inherited a mas- you are buying a used car. The findings, released Monday, show sive security risk when it bought Starwood, I’d still want to look under- that taking the time to conduct cyberse- including a breach that was disclosed just neath the hood.” curity evaluations is important before and days after the deal was announced. Haworth, which is during an acquisition, even if it means Yahoo and Starwood aren’t isolated a Forescout customer, finalizing the deal gets delayed, said Julie incidents. Earlier this month, Asco Indus- revamped its acquisition Cullivan, chief technology and people tries, which Spirit AeroSystems Holdings policy about five years officer at Forescout. The company sells a Inc. agreed to buy in May 2018, was hit ago to include information security platform that allows companies by a large-scale ransomware attack. The security. M&A

TheMiddleMarket.com July/August 2019 Mergers & Acquisitions 35

035_MAJ0719_001 35 7/3/2019 2:05:46 PM have continued in 2019: $31.5 billion was invested in VC deals in the first quarter. That was the third-highest quarterly total since Dow Jones began tracking VC figures in 1992, rank- ing behind only the third and fourth quarters of 2018. VC investment funds raised $15.5 billion in the first quarter of 2019, also the third-highest quarter on record, trailing only the second and fourth quarters of 2018. The high-profile VC exits so far this year may signal a shift toward more IPOs, however. Many IPOs for unicorns — privately held companies valued at more than $1 billion — are slated this year, so investors in VC funds are anticipating that 2019 will be the year of strong distributions, not just paper returns, says Maryam Haque, senior vice president of industry advancement for the National Venture Capital As- sociation, a trade association. BLOOMBERG NEWS IPO performance is shaping up to be the most compelling VC story of 2019, Venture capital’s rising tide Blee says. “The most interesting story to watch is to see how these unicorns, A wave of successful IPOs — including Beyond Meat, Pinterest, Slack and Zoom which have been private for so long and have so much hype around them, Video — is giving VCs their day at the beach perform in the public markets post- IPO,” he says. By Keith Button The first half of 2019 has been filled with prominent IPOs. CrowdStrike (Nasdaq: CRWD), the cybersecurity A dam of pent-up venture capital- ny that goes public can measure their chosen to put off their day of reckoning company, was one of the most notable backed initial public offerings seemed full returns: the initial valuation plus (or in favor of taking on additional rounds recent IPOs, valued at $11.4 billion with to burst in the second quarter, with 62 minus) its gains or losses as it is publicly of VC funding instead, says Bob Blee, its initial offering in June. By the end of U.S. IPOs—the highest quarterly count traded. But at least for the VC investors head of corporate finance at Silicon the month, the stock was up 15 percent. in four years — raising $25 billion—the of the companies that went public in Valley Bank. “There is ample capital in Also in June, software company Slack highest quarterly amount in five years, the second quarter, the trend is favor- the market, both from traditional and was initially valued at $23 billion, and according to Renaissance Capital. Now, able: The average return for those com- non-traditional investors, that valu- its stock had risen 39 percent. VC investors are watching to see if the panies for the quarter was 30 percent, ations and rounds continue to climb, For the first quarter, Uber’s IPO was stock market returns from the 2019 crop led by plant-based meat protein maker allowing companies to stay private the largest VC exit, announced with of IPOs — including Uber (NYSE: UBER), Beyond Meat’s (Nasdaq: BYND) stock longer,” he says. an initial valuation of $75 billion. Lyft’s Lyft (Nasdaq: LYFT) and Slack (NYSE: reaching 542 percent above its initial In 2018, a record $131.5 billion was initial valuation was $24 billion — the WORK) — justify the hype. price, Renaissance reported. invested in U.S. venture capital deals, second largest of the quarter. Pinterest Investment lockups mean that it Until recently, the U.S. VC market and VC investment funds raised $55.5 (NYSE: PINS), Zoom Video Communi- generally takes two quarters after an has been so awash in capital that more billion, also a record, according to Dow cation (Nasdaq: ZM) and PagerDuty IPO before the VC backers of a compa- and more VC-backed companies have Jones VentureSource. Those trends Inc. (NYSE: PD) rounded out the top

36 Mergers & Acquisitions July/August 2019 TheMiddleMarket.com

036_MAJ0719 36 7/3/2019 2:06:52 PM have continued in 2019: $31.5 billion was invested in VC deals in the first quarter. That was the third-highest quarterly total since Dow Jones began tracking VC figures in 1992, rank- ing behind only the third and fourth quarters of 2018. VC investment funds raised $15.5 billion in the first quarter of 2019, also the third-highest quarter on record, trailing only the second and fourth quarters of 2018. The high-profile VC exits so far this year may signal a shift toward more

IPOs, however. Many IPOs for unicorns BLOOMBERG NEWS — privately held companies valued at more than $1 billion — are slated five VC exits, as measured by Silicon statistical anomaly or an indicator of this year, so investors in VC funds are Valley Bank, with initial valuations of things to come remains to be seen. anticipating that 2019 will be the year $10 billion, $9 billion and $2 billion, Blee predicts the trend of fewer-but- of strong distributions, not just paper respectively. larger VC deals will continue in 2019, returns, says Maryam Haque, senior Not all new issues are flying high. perpetuating a “haves vs. have-nots” vice president of industry advancement Uber’s stock was down 1 percent situation where the “haves” will con- for the National Venture Capital As- through the second quarter, and Lyft’s tinue to attract larger rounds of venture sociation, a trade association. was down 12 percent. But Pinterest was capital at a quicker clip. Meanwhile, BLOOMBERG NEWS IPO performance is shaping up to be up 38 percent, and Zoom Video rose a the “have-nots” may have to accept the most compelling VC story of 2019, whopping 140 percent. investments from less-desired partners Venture capital’s rising tide Blee says. “The most interesting story The momentum is expected to or seek exits through sales to private to watch is to see how these unicorns, continue in the second half of the year, equity. The trend could also signify A wave of successful IPOs — including Beyond Meat, Pinterest, Slack and Zoom which have been private for so long including expected debuts from enter- a flight to quality, with VC investors and have so much hype around them, tainment company Endeavor Group, picking the market leader and poten- Video — is giving VCs their day at the beach perform in the public markets post- office-space-sharing business the We tial biggest winner to justify investing IPO,” he says. Co., also known as WeWork, and the capital at ever-growing valuations. The first half of 2019 has been filled Peloton exercise company. One factor driving the large amount with prominent IPOs. CrowdStrike While the VC market has set records of investor capital in VC is the wide (Nasdaq: CRWD), the cybersecurity for investment totals and fundrais- range of new sources of capital beyond chosen to put off their day of reckoning company, was one of the most notable ing, the number of VC investments traditional funds. The London-based in favor of taking on additional rounds recent IPOs, valued at $11.4 billion with had been trending down — making SoftBank Vision Fund, a $100 billion of VC funding instead, says Bob Blee, its initial offering in June. By the end of some analysts wonder if investors were VC funding vehicle that launched in head of corporate finance at Silicon the month, the stock was up 15 percent. becoming more cautious, due to un- 2016, has been a game changer in the Valley Bank. “There is ample capital in Also in June, software company Slack certainty about the global macroeco- venture capital space by making large the market, both from traditional and was initially valued at $23 billion, and nomic environment, says Cyril Neant at pools of capital available to later-stage non-traditional investors, that valu- its stock had risen 39 percent. Dow Jones VentureSource. venture companies, and sovereign ations and rounds continue to climb, For the first quarter, Uber’s IPO was The number of VC deals dropped to wealth funds, hedge funds and family allowing companies to stay private the largest VC exit, announced with 1,234 in the first quarter, down 23 per- offices have become more active in VC, longer,” he says. an initial valuation of $75 billion. Lyft’s cent from one year earlier and the third If IPOs perform as well in the second In 2018, a record $131.5 billion was initial valuation was $24 billion — the straight quarterly decline. That kind of half of the year as many have in the invested in U.S. venture capital deals, second largest of the quarter. Pinterest decline has occurred only twice before: first half, VC firms and corporations will and VC investment funds raised $55.5 (NYSE: PINS), Zoom Video Communi- during the 2008-2009 financial crisis likely increase in their investments in billion, also a record, according to Dow cation (Nasdaq: ZM) and PagerDuty and during the bursting of the dot-com startups. M&A Jones VentureSource. Those trends Inc. (NYSE: PD) rounded out the top bubble in 2001. Whether the drop is a

TheMiddleMarket.com July/August 2019 Mergers & Acquisitions 37

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Table 1: Underlying Theories in Merger and Acquisition (M&A) Literature Often overlooked, employees can make or break the to pay closer attention to these issues, yet they Underlying Theories Sources of Problems Predicted Outcomes Related Prescriptions success of an M&A transaction. frequently get cast aside,” says Jordan Birnbaum, Anxiety theory • Uncertainty and anticipated • Low productivity • Top-down communication; Vice President and Chief Behavioral Economist negative Impact on career • Self-centered behaviors social support; participation M&A transactions fail for many reasons, however it’s at ADP. and job • Mental and physical illness in decision making: training a shame when they fail because of issues like talent • Prolonged anxiety and • Lack of motivation manager to empathize and clashes or talent retention, which are preventable. Birnbaum believes one reason that complex uncertainty listen to employees; golden parachutes Everyone has witnessed these failures time and situations such as personnel changes get pushed • Ongoing communication; time again. aside is because they are not measurable and most speeding up transition high achievers like to work on challenges that have Social Identity theory • Loss of old identities • Sense of loss, anger • Disengagement efforts Look no further than Alcatel and Lucent’s $13.4 quantifiable outcomes. “There isn’t the same pay off (organizational, professional, and grief (grieving meetings); billion merger in 2006, which hit the skids because work group) • Denial and refusal to change proactively assessing to solving complex people problems because you it was plagued by cultural clashes between the strength of existing identities can’t easily measure what those changes mean to and framing new identities French Alcatel and U.S.-based Lucent. The company bottom line outcomes,” says Birnbaum. to be more appealing struggled from then all the way until it was acquired • Creating a new by Nokia in 2016. Microsoft’s purchase of aQuantive Martha Bird, Business Anthropologist with ADP, identity; fostering cross-organizational for $6.7 billion in 2007 is another example. The deal says another problem is that leaders fail to spend arrangements and activities led many execs and skilled employees to leave the time to understand the talent and the culture Acculturation theory • Contact with or adjustment • Acculturative stress and • Cultural due diligence; the company. of the acquired company and its employees. In to different resistance fostering multiculturalism fact, Bird says just calling the people who work at a • Organizational culture • Interorganizational tension facilitating intercultural The number of deals that don’t pan out are endless and conflict learning; heightening company “talent” collectively makes it seem abstract. and there’s no question there is a disconnect between • Culture clash awareness of thinking and “Talent are the people and these people are doing behaviors that cause culture what buyers want to happen and what is reality. a collection of different things and then there is a clash to develop According to research conducted by SourceMedia’s culture that comes down from management and Role conflict theory • Ambiguous and conflicting • Low productivity • Two-way communication; research department on human capital management roles • Low job satisfaction leadership of role then there are subcultures created by these people. strategies, 79 percent of participants say retention of clarification Some of the subcultures are geographical, others key employees is a top initiative while 41 percent say Job characteristics theory • Changes in post- M&A job • Job satisfaction and • Post-M&A job redesign; are created by department, and some are both. The Environments commitment employee involvement in job downsizing and employee selection is a top initiative. point is it’s less about overarching words like talent • Absenteeism/turnover design; job transfer training That said, new owners often fail to communicate and culture and more about different behaviors and Organizational • Perceived fair treatment • Psychological withdrawal • Fair and objective human properly and look beyond the C-Suite when it comes how you can begin to understand those behaviors justice theory of surviving and displaced Turnover resource management; to retention. employees equal participation in and adapt,” says Bird. decision making; treating “Many M&A deals fail to meet their employees with dignity and Additionally, while the C-Suite folks usually receive respect intended outcome because of culture most of the attention, it’s just as important, if not and personnel issues. There is a wealth of more important, to pay attention to all the employees landmark study, Understanding the Human Side of organizational change processes, predicts their evidence demonstrating why it’s important — a mistake often made by acquirers. “The rest of Merger and Acquisitions, by Myeong-Gu Seo and N. psychological and behavioral effect on employees, to pay closer attention to these issues, yet the folks are the ones you want to keep. They are Sharon Hill from the University of Maryland, there and suggests relevant prescriptions to address the they frequently get cast aside.” earning their paychecks and showing the investors are six common theories to explain employees’ problems. The core elements of each theory are – Jordan Birnbaum, Vice President and Chief the returns. It’s not the hero that comes in to save the psychological and behavioral responses to M&A summarized in Table 1. Behavioral Economist at ADP related organization change. The theories include village, it’s the villagers who are the heroes. They will Birnbaum says these theories are incredibly helpful (a) anxiety theory, (b) social identity theory, (c) make or break the storyline,” says Bird. to understand. “If anxieties can be anticipated, they “Many M&A deals fail to meet their intended outcome acculturation theory, (d) role conflict theory, (e) can also be counter-programmed. Understanding the because of culture and personnel issues. There is a In order to address complex people issues, it is first job characteristics theory, and (f) organizational psychology of M&A also provides a roadmap,” wealth of evidence demonstrating why it’s important necessary to understand them. According to one justice theory. Each theory identifies distinct sources he says. of problems that frequently emerge during M&A

A2 visit adp.com/pe A3 visit adp.com/pe

040_MAJ0719 40 7/5/2019 1:33:10 PM Employees Are the No. 1 Asset Employees Are the No. 1 Asset

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041_MAJ0719 41 7/5/2019 1:33:10 PM Employees Are the No. 1 Asset

“It comes down to transparency and pride in their work going forward. Their commitment putting yourself in their shoes and level often deepens, leading to sustained engagement treating employees the way you want to and performance. be treated. It seems easy, but often gets Don’t underestimate how long change will take. lost in the shuffle. When this happens we Human tendency is to underestimate how long anything risk becoming disconnected from our own will take. When there are emotions involved (as is the sense of humanity.” case with organizational changes) changes take even – Martha Bird, Business Anthropologist with ADP more time to be embraced.

What’s more, there are things acquirers can do to Many acquirers struggle with these issues and they turn help make the transition successful. “When an M&A to a trusted advisor for help. With a team dedicated deal happens there will be change and people to private equity, ADP’s experts help new owners with often feel alienated. There are meaningful ways to everything from analyzing and assessing a team to facilitate conversation and create a place where putting together a detailed growth trajectory that’s open discussion is valued. Most of the time people attainable. “We give buyers the information they need are afraid they will lose their voice and then with to understand what issues they may face from a little or no communications, people start to imagine human capital standpoint and how to navigate them their differences are much greater than they are in successfully. Many times, human resources departments reality, which often leads to turmoil,” says Bird. “It are struggling to run a quarter mile and they are now comes down to transparency and putting yourself being asked to run a marathon,” says Jason Favreau, in their shoes and treating employees the way you Vice President at ADP. “It’s too much to ask them to want to be treated. It seems easy, but often gets lost sort out all the personnel issues that arise with an in the shuffle. When this happens we risk becoming acquisition. We can do the heavy lifting and free up the disconnected from our own sense of humanity.” core team up for more important tasks.”

Actions buyers should take to be successful: Communicate with everyone at the acquired company immediately and frequently. Address the employees on day one. Messages are always better delivered from someone whom employees feel connected to. The longer fears and rumors are not addressed the more real they become.

Commit to fairness. People care about organizational justice. You can’t convince everyone their job is safe if that’s not true. But you can explain why the company will be making the decisions it does, and make sure those decisions are consistent. Employees want to be sure employers are being fair across the board. It will assuage fear.

Give employees a voice. Employees who have a role in reshaping the company feel much more ownership and

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043_MAJ0719 43 7/3/2019 9:54:17 AM Guest Article

Empowerment and support

ADOBE STOCK If you believe that everyone from the firm’s upper management to the entry-level employees in your portfolio companies should play a role in value creation, you have to make Focus on the human factor the commensurate investment in them. This means the right combination of empowerment and support. “Whether you call it engagement, satisfaction or happiness, we have seen first-hand It’s not atypical for a PE firm analyst to simply play the the positive financial impact putting people first has” role of being the fifth person on a five-person deal team where they spend two years formatting financial models and By Graham Weaver doing little else. This is a complete waste of resources, priori- tizing a low-value function over the professional you suppos- edly believe will strengthen your team. Even in today’s strong public equi- Many inside and outside of PE pay It’s important to understand that If you have confidence in your hire, practice extreme ties market, private equity remains lip service to this notion, but few treat it driving employee engagement isn’t empowerment and give them ownership, autonomy and a desirable asset class, relied on by as the strategic value driver it is. Happy, about yoga classes, company-paid responsibility early on. Two key predictors of employee hap- institutional investors to generate al- engaged employees work harder, lunches, or a casual dress code. While piness are the amount of control they have in their job and pha. However, with the proliferation of execute better ideas, and contribute to these perks can create short-term joy, the amount of opportunity for learning and growth. Provide funds and the amount of capital to be higher returns. However, a recent study they aren’t the type of benefits that these and they will step up to the challenge and deliver more deployed, generating outsized returns found that 73 percent of all employees propel employees to do their best. For value to your organization than you would have imagined. has become more challenging. are “disengaged” from the company this, you have to do three things: 1) Extreme empowerment can feel overwhelming without We have seen the industry shift they work for. Could you imagine the connect with employees’ passion, 2) appropriate support. While most firms only offering profes- focus from financial optimization to impact on your firm, your portfolios, empower and support them, and 3) sional coaching to executives or the C-suite, Alpine provides operational improvement, but with the and, more broadly, the global economy, measure the impact. a 6-month coaching program to all levels. We find that as a latter already well-explored, where do if even a fraction of those people were result, people are constantly learning, growing and taking on we go from here? Firms that want to fully engaged? Passion and purpose more and more responsibility, which more than outweighs stand out must look to other areas of Whether you call it engagement, Connecting work to an employee’s the cost of the coaching program. portco businesses to create value, and satisfaction or happiness, we have seen passion starts in the recruitment pro-

no aspect is riper for innovation than first-hand the positive financial impact cess. Instead of handing a candidate a Graham Weaver is the founding partner of Alpine Investors, a San Francisco private equity firm that invests in software and services human capital. putting people first has. balance sheet and asking where they and has more than 1.8 billion of assets under management

44 Mergers & Acquisitions July/August 2019 TheMiddleMarket.com

044_MAJ0719 44 7/3/2019 2:03:36 PM Guest Article

would cut costs, start by asking what motivates the candidate both in and outside the office, what impact they hope to make, and what they view as meaningful work. Within our office, we have every employee complete a 1-day workshop called Passion & Purpose that helps identify individuals’ passions. These are usually a mix of professional and personal goals and understanding how these can mesh is critical. Once hired, retaining world class people is hard. By defini- tion, this cohort has high standards and great ambitions. To keep them, we have to be very flexible around roles, constantly adjusting and re-defining responsibility in order to tap into the benefits from maintained focus, drive, and productivity. Although someone may take some time to ramp up to a new role, we find that in the long run, the drive that comes from putting an employee into a role they are passionate about allows them to contribute even further to the business. As a result of this flexibility, these employees tend to be loyal Measuring impact to and appreciative, which keeps turnover to a minimum. Even though sentiment is emotional, it can and should be routinely measured. One way of marking progress in em- Empowerment and support ployee satisfaction is Employee Net Promoter Score (eNPS), If you believe that everyone from the firm’s upper man- which uses employee input to create a single number on agement to the entry-level employees in your portfolio com- a scale of -100 to +100. According to Comparably, a score panies should play a role in value creation, you have to make above +22 is considered great – finance is, as expected, Focus on the human factor the commensurate investment in them. This means the right lower. As of January 2019, Alpine’s average eNPS across its combination of empowerment and support. entire portfolio was +33, and the eNPS at Alpine HQ was +76. “Whether you call it engagement, satisfaction or happiness, we have seen first-hand It’s not atypical for a PE firm analyst to simply play the You can do this too. The assessment takes just a few min- the positive financial impact putting people first has” role of being the fifth person on a five-person deal team utes to complete and, if distributed regularly, allows employ- where they spend two years formatting financial models and ee sentiment to be measured and treated as a core KPI. doing little else. This is a complete waste of resources, priori- The ultimate proof is in the success of investment. We tizing a low-value function over the professional you suppos- find that increased eNPS is often correlated with increased edly believe will strengthen your team. financial and operational performance. Call it people-driven It’s important to understand that If you have confidence in your hire, practice extreme operational improvement. Those who think putting people first driving employee engagement isn’t empowerment and give them ownership, autonomy and is a secondary priority might be interested to learn that Alpine about yoga classes, company-paid responsibility early on. Two key predictors of employee hap- portfolio companies led by a People- First trained leader from lunches, or a casual dress code. While piness are the amount of control they have in their job and our CEO in Residence program have generally outperformed these perks can create short-term joy, the amount of opportunity for learning and growth. Provide our portfolio companies where an external CEO was recruited they aren’t the type of benefits that these and they will step up to the challenge and deliver more after close. If it were within a handful of companies, we could propel employees to do their best. For value to your organization than you would have imagined. say this was a fluke, but decades into this test, we know this this, you have to do three things: 1) Extreme empowerment can feel overwhelming without method is the future. connect with employees’ passion, 2) appropriate support. While most firms only offering profes- Private equity has the capacity to be a force of unparal- empower and support them, and 3) sional coaching to executives or the C-suite, Alpine provides leled change in business performance, and putting people first measure the impact. a 6-month coaching program to all levels. We find that as a unlocks an powerful toolbox to do so. Focusing on employee result, people are constantly learning, growing and taking on satisfaction runs in tandem with returns, not in opposition to Passion and purpose more and more responsibility, which more than outweighs them. Firms who ignore this new frontier of value creation — Connecting work to an employee’s the cost of the coaching program. for themselves and their portfolio — will be left. M&A passion starts in the recruitment process. Instead of handing a candidate a Graham Weaver is the founding partner of Alpine Investors, a San Francisco private equity firm that invests in software and services balance sheet and asking where they and has more than 1.8 billion of assets under management

TheMiddleMarket.com July/August 2019 Mergers & Acquisitions 45

045_MAJ0719 45 7/3/2019 2:03:39 PM People Moves

New hires and promotions

By Demitri Diakantonis

Shawn Abrams was hired by specialty Gareth Burton has joined TA Associ- Eggemeier was most recently the presi- materials-focused private equity firm ates-backed SaaS provider Think Proj- dent of Permira-backed Genesys. SK Capital Partners as an operating ect as CEO. Burton is the former CIO of director. He was most recently with U.K. contractor Laing O’Rourke. Andrew Gitkin was hired by Raymond Arsenal Capital Partners. James as a managing director and co- Andrew Cahill was hired by middle- head of the investment bank’s health- James Baker has been promoted to market investment bank TrueNorth care group. He was previously with head of capital markets at investment Capital Partners as a managing direc- Piper Jaffray Cos. (NYSE: PJC). bank B.Riley FBR. Baker joined the firm tor, where he is focusing on distressed in 2010, and will continue to serve as and turnaround situations. Cahill was Tracy Harris has joined private equity executive vice president of brokerage. most recently with Shore Capital. firm Siris as a partner and head of investor relations and product strategy. Ruulke Bagijn has been John Chapparo Harris was most recently with Step- promoted to head of in- has joined Oaklins stone Group. vestment solutions at the DeSilva+Phillips as a Carlyle Group (Nasdaq: managing director in Richard Haueter has been named CEO CG). The division builds the investment bank’s at Littlejohn Capital-backed Western private equity and real healthcare software Industries Plastics Products. He was estate portfolios through and technology group. previously an executive at foam prod- fund of funds, second- Chapparo was previous- ucts manufacturer Armacell. ary purchases of existing ly with Brown Brothers portfolios and managed Harriman & Co. Jeff Jacobson was hired by private co-investment programs. Ruulke Bagijn equity firm Siris as executive partner. Bagijn is co-head of AlpInvest Partners’ Bob Cronin has joined investment bank Jacobson was most recently the CEO primary funds investments team. Alantra as a managing director, where of Xerox (NYSE: XRX). he is focusing on the technology sector. Jonathan Borell was hired by specialty Cronon was most recently with Bown Jeannie Jones has been promoted from materials-focused private equity firm Advisors. director of finance and accounting to SK Capital Partners as a managing CFO at PE firm Grain Management. director. He was most recently with Sun Jeffrey Day was hired as a managing Capital Partners. director in the private credit and equity Jamie Kim was hired by PE firm Gallant group at Morgan Stanley Investment Capital as head of business develop- Michael Brandt was hired by restructur- Management. He was most recently a ment. She was previously vice president ing firm Gordon Brothers as chief oper- managing director at Madison Capital of corporate development and strategy ating officer. He most recently served Funding. at data and analytics company Presto. as CFO of Prudential’s international insurance holdings and retirement Tom Eggemeier was hired by private Violetta Kokolus was hired by law services businesses. equity firm Permira as a partner, where firm Ropes & Gray as a partner. Most he is focusing on the technology sector. recently with Dechert, Kokolus advises

46 Mergers & Acquisitions July/August 2019

046_MAJ0719 46 7/3/2019 1:59:27 PM LEADING FIGURES IN MERGERS & ACQUISITIONS

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clients on IP, data privacy and cyberse- bank William Blair as a managing Paul Schneir has joined private equity curity aspects of M&A. director, where he is helping the firm firm Blue Sea Capital as an executive grow its western European presence. advisor, where he is assisting the firm Joseph Kopilak has joined PE firm Pine Meurs was previously with ABN Amro. in the evaluation and management of Brook as chief financial officer and chemicals investments. Schneir was chief compliance officer. Kopilak most Melissa Mounce was hired by private eq- most recently with KeyBanc Capital recently as the CFO of uity firm GTCR as a man- Markets. J.P. Morgan Partners aging director, leadership Global Investors fund. talent. She is focusing on Brian Schofield has joined middle- recruitment and execu- market investment bank Capstone Sunil Kothari has joined tive assessment at GTCR Headwaters as a managing director. alternative investment portfolio companies. He was previously with Lampert Advi- firm Angelo, Gordon Mounce was previously sors, and advises private equity firms & Co., as a manag- with Baird Capital. and middle market businesses on ing director where debt financing. he is responsible for Gregory Olson was Maarten Meurs originating and execut- hired by middle-market Kathleen Taylor has been named chair ing on residential and investment firm Graycliff at private equity firm Altas Partners. consumer debt invest- Partners as an operating She currently serves as chair at the ment opportunities partner. Olson is the for- Royal Bank of Canada. across Europe. He was mer chief development previously with Pimco officer at Ichor Systems. David Tuit has joined Huron Capital- Europe Ltd. backed property and casualty insur- Ivy Ono has been pro- ance company High Street Insurance Jeanine Krattiger has moted from controller to Partners as CFO and senior partner. been promoted to chief financial officer at Tuit was most recently with insurance managing director at Edward Wei middle-market private brokerage firm Acrisure. investment bank Carl equity firm Bertram Marks Advisors. Krat- Capital. Ono joined the Edward Wei has joined law firm Gib- tiger leads the firm’s PE firm in 2008. son, Dunn & Crutcher LLP as a part- strategic marketing and ner. Most recently with Cadwalader, business development Pedro Parente has joined Wickersham & Taft, Wei focuses on tax initiatives including PE firm General Atlantic matters related to PE and M&A. events, brand aware- as chairman of Brazil. ness, content marketing Parente most recently Yolanda Williams has joined invest- and digital and internal served as CEO of food ment bank Matrix Capital Markets communications. company BRF. Group as a controller, where she is Yolanda Williams responsible for the firm’s account- Craig Krinbring has joined investment David Perotti has joined private equity ing, banking and financial reporting. bank B. Riley FBR as a managing firm Align Capital Partners as an Williams was most recently a control- director. He was most recently with operating partner, where he is helping ler at TDBBS LLC, doing business as Kema Partners, and focuses on the the firm accelerate its focus on invest- Best Bully Sticks, Paw Love and Bark technology sector. ments in tech-enabled services. Perotti Worthies. was most recently the CEO of Soft- Paul Licursi has been promoted from ware-as-a-Service company eRecruit. Bryan Yeazel has been named CEO chief financial officer to chief operating at Littlejohn & Co.-backed outdoor officer at PE firm Grain Management. Corey Peters has been promoted from recreational products maker Play- CFO to COO at middle-market mezza- Power. Yeazel was previously the CEO Maarten Meurs has joined investment nine firm Yukon Partners. of World and Main LLC. M&A

48 Mergers & Acquisitions July/August 2019

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