A Look at How Five of the Biggest Tech Companies Probe New Terrain

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MARCH 2020

A look at how ﬁ ve of the biggest tech companies probe new terrain through early-stage investments

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0C2_MAJ0320 2 2/24/2020 11:54:58 AM Contents March 2020 | VOL. 55 | NO. 3

Cover Story 16 Fresh Terrain A look at how five of the biggest tech companies explore new territory through early-stage investments.

Features 24 Viral impact How the coronavirus is affecting M&A and private equity. 27 Top investment banks Houlihan Lokey leads list based on volume of PE-backed U.S. deals 30 Top private equity firms Audax ranks first in U.S. deals.

Private Equity Perspective 14 Record year for fundraising Blackstone’s $26 billion fund marked the largest buyout fund ever raised.

The Buyside 15 Taking a new path XPO Logistics is selling assets and has Watercooler hired a new CFO to lead the process.

6 10 Guest article Climate change draws PE Future of auto 33 KKR raises first global impact fund to BorgWarner acquires Delphi to Women on board target clean water. position for auto industry shift. Gender diversity on corporate boards is good for performance and for 8 12 shareholders. Protecting businesses Why investors like steaks Advent and Crosspoint buy Smith & Wollensky owner purchases cybersecurity firm Forescout. Strega to form new hospitality group. Data 35 9 12 Completed deals Healthy capital Duff & Phelps changes hands CVC Capital, KKR and Olympus Simple Mills backer Vestar closes Stone Point, Further Global acquire the Partners were among notable buyers new fund. financial services firm. in January.

TheMiddleMarket.com March 2020 Mergers & Acquisitions 1

001_MAJ0320 1 2/24/2020 6:22:35 PM Inside Word March 2020 | VOL. 55 | NO. 3

Alexa, play “Rocketman”

The voice assistant has sold 200 million devices and TheMiddleMarket.com launched a corporate venture capital fund 1 STATE STREET PLAZA, 27TH FLOOR NEW YORK, NY 10004-1505 • (212) 803-8200 EDITOR-IN-CHIEF Mary Kathleen Flynn MANAGING EDITOR Like many of today’s technology giants, Ama- Demitri Diakantonis zon.com Inc. (Nasdaq: AMZN) came from humble CONTRIBUTING EDITORS Keith Button, Danielle Fugazy beginnings, as a startup in a garage. It’s said that in GROUP EDITORIAL DIRECTOR, BANKING AND CAPITAL MARKETS the early days of the company, founder Jeff Bezos Richard Melville and his wife couldn’t run a vacuum cleaner or hair dryer in their house without blowing a fuse, due to EXECUTIVE DIRECTOR, CONTENT OPERATIONS AND CREATIVE SERVICES the power drain from the company’s servers. It may Michael Chu SR. ART DIRECTOR be a bit fanciful, but I can’t help wondering if that Nick Perkins domestic inconvenience planted the seed for the VICE PRESIDENT, CAPITAL MARKETS smart-home technology that would one day blossom Harry Nikpour (212) 803-8638 SENIOR MARKETING MANAGER into Amazon’s Echo smart speaker and Alexa voice assistant. Jamie Billington Alexa has reached dizzying heights in popularity over the last year. In 212-803-6099 January 2019, Amazon announced it had sold 100 million Alexa-powered CHIEF EXECUTIVE OFFICER ��Gemma Postlethwaite devices. By January 2020, that number had doubled. Smart-home engage- CHIEF FINANCIAL OFFICER ��Debra Mason ment with Alexa nearly doubled, too, with people using the voice assistant for CHIEF STRATEGY OFFICER ��Jeff Mancini smart-home controls hundreds of millions of times every week. CHIEF CUSTOMER OFFICER ��Dave Colford

Within Amazon, Alexa is the also focal point for much activity. The tech- CHIEF CONTENT OFFICER ��David Evans

nology even has its own venture capital fund. The Alexa Fund invests up to VP, PEOPLE & CULTURE ��Lee Gavin $200 million in early-stage voice technology companies. It focuses on hard-

ware products both inside and outside the home, businesses that deliver new LICENSING AND REUSE OF CONTENT: Contact our official partner, Wright’s Media, about available services to devices enabled by Alexa and companies that can contribute to usages, license and reprint fees, and award seal artwork at [email protected] or (877) 652-5295 for more the science behind voice technology. information. Please note that Wright’s Media is the only authorized company that we’ve partnered with for Arizent Many of today’s big tech companies are engaging in corporate venture materials. capital (CVC), perhaps taking a page from their own histories. Bezos, for ex- CUSTOMER SERVICE ample, began raising about $1 million from around 20 angel investors in 1995, [email protected] or (212) 803-8500 then raised an $8 million Series A from Kleiner Perkins in 1996 and then took Mergers & Acquisitions Vol. 55/No. 3 (ISSN 0026-0010) is Amazon public in 1997. published monthly with combined issues in July/August and November/December by Arizent, One State Street Plaza, The end goal for startups backed by CVC may more likely be an M&A deal, 27th Floor, New York, NY 10004-1505. Yearly subscription is $1,995; $2035 for one year in all other countries. Periodical rather than an IPO. That’s one potential benefit of CVC. If the company doing postage paid at New York, NY and U.S. additional mailing offices. POSTMASTER: Send address changes to Mergers the investing likes how the startup develops, the investor is in a great position & Acquisitions / Arizent, One State Street Plaza, New York, NY 10004. For subscriptions, renewals, address changes to snatch it up. and delivery service issues contact our Customer Service department at (212) 803-8500 or email: [email protected]. Check out our cover story, where we explore how Amazon and other tech This publication is designed to provide accurate and authoritative information regarding the subject matter giants are using CVC in tandem with their R&D and M&A efforts. M&A covered. It is sold with the understanding that the publisher is not engaged in rendering financial, legal, accounting, tax, – Mary Kathleen Flynn or other professional service. Mergers & Acquisitions is a registered trademark used herein under license. ©2020 Arizent and Mergers & Acquisitions. All rights reserved.

2 Mergers & Acquisitions March 2020

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003_MAJ0320 3 2/24/2020 11:54:58 AM What’s going on @TheMiddleMarket.com

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Conversations Opinion Data

What’s ahead Inclusion Weekly roundups We conducted interviews with 8 invest- Having a more diverse workforce and Check our website every Friday for PE ment bankers and other M&A advisors. board of directors leads to a greater fundraising scorecard and the Weekly Some said the first half of the year will diversity of ideas. But it’s not just wrap. Recent deals mentioned include be robust, while others said the un- greater diversity of ideas which leads Morgan Stanley’s purchase of E*Trade certainty may have a negative impact to innovation; greater board diversity and Franklin Resources’ acquisition of throughout 2020. also sets the tone for a more inclusive Legg Mason. workplace culture.

4 Mergers & Acquisitions March 2020

004_MAJ0320 4 2/24/2020 4:41:18 PM 005_MAJ0320 5 2/24/2020 11:54:58 AM Watercooler BLOOMBERG NEWS Climate change draws PE

KKR raises first global impact fund to target clean water

By Demitri Diakantonis and Mary Kathleen Flynn

KKR (NYSE: KKR) has raised $1.3 “We are thrilled to see our inves- energy is becoming “one of the most billion for its global impact fund. tors’ shared enthusiasm for the tre- active sectors in infrastructure,” David The fund is “dedicated to investment mendous opportunity we see ahead Giordano, global head of BlackRock opportunities in companies whose for KKR Global Impact and will build renewable power, told Bloomberg core business models provide com- on this to help set the new standard News. It comes, he said, “as global mercial solutions to an environmental across investing, value creation and power generation shifts from two- or social challenge,” the firm says. measuring success in the space,” says thirds fossil fuels to two-thirds renew- The fund will target companies in the Alisa Amarosa Wood, KKR partner ables over the next few decades.” lower middle-market that contribute and head of KKR’s private market Jeff Bezos is also committing to towards the United Nations Sustain- products group. investing in climate change. The able Development Goals. The themes Investment firms are raising funds Amazon.com Inc. (Nasdaq: AMZN) that the fund will focus on include: that focus on climate change. For founder has created the Bezos Earth climate change, clean water, work- example, BlackRock has raised $1 Fund that is starting with $10 billion force development, waste, mobility billion to invest in wind, solar and and will begin to issue grants in a few and sustainability. battery-storage projects. Renewable months.

6 Mergers & Acquisitions March 2020

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007_MAJ0320 7 2/24/2020 11:54:59 AM Arizent_House Ads_2.0_Final.indd 1 2/21/20 11:03 AM Watercooler BLOOMBERG NEWS ADOBE STOCK Double fundraising Protecting businesses Healthy capital

Battery Ventures raises $2 billion to go Advent and Crosspoint buy Simple Mills backer Vestar closes after enterprise companies cybersecurity firm Forescout new fund

Battery Ventures raised two new funds totaling $2 billion, Advent International and Crosspoint Capital are buying cy- Middle-market private equity firm Vestar Capital Partners almost double its last total and highlighting investors’ bersecurity company Forescout Technologies Inc. (Nasdaq: has raised its seventh fund at $1.1 billion. The firm focuses growing interest in companies that cater to other busi- FSCT) for $1.9 billion. “As enterprises continue to shift to the on the consumer, business services and healthcare sectors, nesses, rather than consumers. cloud and decentralized networks, today’s chief information with a focus on family and founder-owned opportunities. The new funds, a $1.2 billion Battery Ventures XIII, along security officers are looking for secure solutions to increase The fund has already made two investments in IRI, a pro- with an $800 million side fund to help back extra-large visibility and provide orchestration, making their network vider of big data and predictive analytics for the consumer, bets, will keep investing in sectors like business-to-business controls more seamless,” says Crosspoint managing partner retail and media sectors; and better-for-you food brand software, information infrastructure and cybersecurity. Greg Clark. Simple Mills. Battery’s successes include tax-compliance software “Forescout’s platform is already ahead of the curve, and “Vestar’s talented investment team consistently maker Avalara Inc., which first received an investment in we believe we can further advance the company’s market leverages deep sector relationships to uncover 2012. Several of Battery’s portfolio companies were also position by applying the collective experience and exper- overlooked opportunities, while our Vestar resources acquired by bigger companies or private equity firms, tise in cybersecurity software of the Advent and Crosspoint team works closely with company management to including WebPT, ClearCare and Glassdoor. Capital team.” deliver operational improvement,” says Vestar CEO Dan The transactions helped lift interest in enterprise overall, Forescout offers cloud, device and network security O’Connell. Since it was founded in 1988, Vestar has in- along with the performance of Battery’s funds. Fund IX, services. The company previously worked with Aflac (NYSE: vested $8 billion in 83 companies and made 200 add-on which dates from 2010 and held investments in some of the AFL), Humana (NYSE: HUM) and JPMorgan Chase (NYSE: acquisitions. recently exited portfolio companies, has an annual internal JPM). “We are still in early innings of a large market oppor- About three-quarters of PE managers raising a fund rate of return of 26 percent, according to Bloomberg data. tunity as every organization needs visibility into what is con- in 2020 expect it to be larger than the prior money pool, Battery hasn’t entirely escaped the malaise hanging necting to their network and how to mitigate against high according to an EY survey. That’s the highest share since over some consumer companies. It is an investor in Wag risk devices, including non-traditional IoT and OT devices,” 2013, when EY first started posing the question to firms. Labs Inc., a troubled dog-walking company. Some of its adds Forescout CEO Michael DeCesare. Advent manages Almost 60 percent of managers plan to raise a fund in the other retail businesses appear to have more momentum, about $57 billion in assets. coming year, the survey found. Vestar raised its last fund in such as StockX, a sneaker-trading marketplace. The firm Morgan Stanley and Wilson Sonsini Goodrich & Rosati 2013 at $814 million. last raised two funds totaling $1.25 billion in February are advising Forescout. Ropes & Gray is advising Advent. Kirkland & Ellis advised Vestar on the fundraise while 2018. Financing is being provided by Owl Rock Capital. Monument Group served as placement agent.

8 Mergers & Acquisitions March 2020 TheMiddleMarket.com

008_MAJ0320 8 2/24/2020 4:39:31 PM Watercooler ADOBE STOCK SIMPLE MILLS ADOBE STOCK Protecting businesses Healthy capital PE firms invest in risk

Advent and Crosspoint buy Simple Mills backer Vestar closes “The risks facing financial institutions cybersecurity firm Forescout new fund are multiplying”

Advent International and Crosspoint Capital are buying cy- Middle-market private equity firm Vestar Capital Partners Gryphon Investors has acquired Ncontracts, a provider bersecurity company Forescout Technologies Inc. (Nasdaq: has raised its seventh fund at $1.1 billion. The firm focuses of risk management software for the financial services FSCT) for $1.9 billion. “As enterprises continue to shift to the on the consumer, business services and healthcare sectors, sector. Ncontracts is Gryphon’s second deal in the risk and cloud and decentralized networks, today’s chief information with a focus on family and founder-owned opportunities. compliance industry, following the firm’s 2018 investment security officers are looking for secure solutions to increase The fund has already made two investments in IRI, a pro- in RegEd. visibility and provide orchestration, making their network vider of big data and predictive analytics for the consumer, “The risks facing financial institutions are multiplying controls more seamless,” says Crosspoint managing partner retail and media sectors; and better-for-you food brand and becoming more complex, and no bank, regardless of Greg Clark. Simple Mills. size, can justify using spreadsheets today to manage the “Forescout’s platform is already ahead of the curve, and “Vestar’s talented investment team consistently process when the stakes are so high,” says Gryphon princi- we believe we can further advance the company’s market leverages deep sector relationships to uncover pal Jon Cheek. “Ncontracts’ software has made it easy for position by applying the collective experience and exper- overlooked opportunities, while our Vestar resources financial institutions of all sizes to manage the spectrum tise in cybersecurity software of the Advent and Crosspoint team works closely with company management to of complex risks and regulations facing them today.” Capital team.” deliver operational improvement,” says Vestar CEO Dan Ncontracts’ software products are designed to help Forescout offers cloud, device and network security O’Connell. Since it was founded in 1988, Vestar has in- companies with compliance, vendor management and en- services. The company previously worked with Aflac (NYSE: vested $8 billion in 83 companies and made 200 add-on terprise risk management. The target has more than 1,300 AFL), Humana (NYSE: HUM) and JPMorgan Chase (NYSE: acquisitions. customers in the U.S. Gryphon invests up to $300 million JPM). “We are still in early innings of a large market oppor- About three-quarters of PE managers raising a fund in businesses that have up to $500 million in enterprise tunity as every organization needs visibility into what is con- in 2020 expect it to be larger than the prior money pool, value. necting to their network and how to mitigate against high according to an EY survey. That’s the highest share since “While Ncontracts has experienced tremendous growth risk devices, including non-traditional IoT and OT devices,” 2013, when EY first started posing the question to firms. over the last few years, there are still opportunities for adds Forescout CEO Michael DeCesare. Advent manages Almost 60 percent of managers plan to raise a fund in the expansion across this fragmented market,” says Ncon- about $57 billion in assets. coming year, the survey found. Vestar raised its last fund in tracts CEO Michael Berman. “With Gryphon’s resources Morgan Stanley and Wilson Sonsini Goodrich & Rosati 2013 at $814 million. and leadership, we are confident that we can continue to are advising Forescout. Ropes & Gray is advising Advent. Kirkland & Ellis advised Vestar on the fundraise while increase our market share, and we are excited to embark Financing is being provided by Owl Rock Capital. Monument Group served as placement agent. upon a strong partnership.”

TheMiddleMarket.com March 2020 Mergers & Acquisitions 9

009_MAJ0320 9 2/24/2020 4:39:51 PM Watercooler DELPHI TECHNOLOGIES BLOOMBERG NEWS Future of auto Mining for deals

BorgWarner acquires Delphi to position M&A opportunities in the mining sector for auto industry shift dry up

BorgWarner Inc. (NYSE: BWA) is buying Delphi Technolo- Private equity firms lost interest in the mining world in 2019, gies PLC (NYSE: DLPH) in a deal that values the target pumping 75 percent less money into the sector as they at $3.3 billion. The transaction brings together two auto focused more on funding existing investments. suppliers that are positioning for the auto industry’s shift Investments dropped to $500 million from $2 billion a to hybrid and electric vehicles, reports Bloomberg News. year earlier, according to a report by law firm Bryan Cave Forced by governments around the world to improve fuel Leighton Paisner. That was the lowest amount since the efficiency and cut emissions, automakers are turning to company started tracking the space in 2013. smaller, lighter engines and electrifying their lineups. Private equity poured money into the mining sector “This exciting transaction represents the next step in several years ago when big producers were forced to shed BorgWarner’s balanced propulsion strategy, strengthening assets amid a collapse in commodity prices. That trend ap- our position in electrified propulsion as well as our com- pears to have ended, and the law firm said private equity is bustion, commercial vehicle and aftermarket businesses,” now focused on raising additional funds for existing invest- says BorgWarner CEO Frédéric Lissalde. ments rather than looking for new deals. There was also a BorgWarner makes auto parts for hybrid and electric dearth of big single deals last year. cars, such as the electric drive module pictured on display “Increases in stakes are often focused on protecting exist- at Automotive World in Tokyo. Delphi was one of two coming investments from dilution where additional capital is panies to split from Delphi Automotive in 2017. The other needed to progress the project or for working capital,” Alex- was Aptiv Plc, focused on new technology like advanced ander Keepin, head of mining at BCLP, said in the report. safety systems and self-driving car software. The split left Gold remained the most popular commodity sector in the smaller Delphi Technologies to focus on supplying 2019, attracting $192 million in investment, followed by lead engine and transmission parts. BoFA Securities, Rockefeller and copper. For 2020, the law firm expects to see significant Financial and Simpson Thacher & Bartlett are advising disposals by private equity. BorgWarner. Goldman Sachs (NYSE: GS) and Kirkland are A number of funds “are now in year seven of what is often advising Delphi. a 10-year fund life,” Keepin said.

10 Mergers & Acquisitions March 2020

010_MAJ0320 10 2/24/2020 4:39:58 PM ®

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011_MAJ0320 11 2/24/2020 11:54:59 AM Watercooler

Warren Buffett sheds newspapers

Berkshire Hathaway sells BH Media

Berkshire Hathaway Inc. (NYSE: BRK.A agreed to sell its BH Media unit and its 30 daily newspapers to Lee Enterprises Inc., which owns papers including the St. Louis Post-Dispatch, for $140 million

SMITH & WOLLENSKY RESTAURANT GROUP SMITH & WOLLENSKY RESTAURANT ADOBE STOCK in cash. Lee has been managing the papers for Buffett’s company since Why investors like steaks Duff & Phelps changes hands 2018, and Berkshire is loaning Lee the money for the purchase. Smith & Wollensky owner buys Strega Stone Point, Further Global, purchase Buffett, who got a job delivering to form new hospitality group the financial services firm papers as a teenager and invested in the industry to capitalize on its one-time local advertising stronghold, lamented last Irish investment firm Danu Partners has acquired upscale Stone Point Capital and Further Global are buying financial year that most newspapers are “toast.” Italian restaurant operator the Strega Group from the services firm Duff & Phelps from Permira Funds for $4.2 bil- BH Media, which owns papers across the Varano Group. Danu owns steakhouse chain Smith & Wol- lion. Permira is keeping a stake in the target. Duff & Phelps country, has been cutting jobs for years lensky which it purchased in 2016. As a result of the deal, advises companies on valuation, corporate finance, investi- to cope with declining ad revenue. Danu has formed a new restaurant company called PPX gations, disputes, cybersecurity, compliance and regulatory “We had zero interest in selling the Hospitality Brands. The latter will manage Smith & Wol- matters. group to anyone else for one simple lensky and Strega. Duff & Phelps’ clients include 70 percent of top-tier pri- reason: We believe that Lee is best “Following the successful acquisition of the Smith & vate equity, law firms and hedge funds. The firm bought cy- positioned to manage through the Wollensky Restaurant Group in 2016, the acquisition of The bersecurity company Kroll in 2018 and claims and noticing industry’s challenges,” Buffett said in a Strega Group is an attractive opportunity to add highly administrator Prime Clerk in 2019. Duff & Phelps has about statement Wednesday. complementary Boston-based operating businesses to our 3,500 professionals worldwide. “We are thrilled to have the In 2018, Buffett acknowledged that hospitality portfolio,” says Danu co-founder Leonard Ryan. opportunity to partner with Duff & Phelps again and par- he was surprised that the decline in In addition to PPX, Danu’s other hospitality investment is ticipate in the next phase of growth for the company,”says demand for newspapers hadn’t let up the Mercantile Group, which operates a group of restau- Stone Point CEO Chuck Davis. and that his company hadn’t found a rants, bars and hotels along with a nightclub and a music “The firm maintains a strong brand position and an out- successful strategy to combat falling venue in Dublin. standing entrepreneurial culture that will drive its continued advertising and circulation. Strega’s restaurant group includes Strega Waterfront, success.” Duff & Phelps is not the only bank to announce a The Lee sale will include Buffett’s Strip by Strega and Strega Prime, as well as several cafés deal recently. Earlier in January, Piper Jaffray completed its hometown Omaha World-Herald and and a catering business that are all in and around Boston. merger with Sandler O’Neil to become Piper Sandler Cos. Buffalo News, a paper he’s owned for “The Strega brand was built by my passion and determi- (NYSE: PIPR). more than four decades. nation to add to Boston’s outstanding culinary scene over UBS Investment Bank, Goldman Sachs (NYSE: GS), Ever- It’s a rare move for the conglomer- the past 17 years and to have this opportunity to pass on core and Kirkland & Ellis are advising Duff & Phelps. Skad- ate as Buffett has long said that he the Strega experience to a company like Danu Partners den, Arps, Slate, Meagher & Flom LLP is advising Permira. prefers to hold onto businesses. M&A is an incredible opportunity,”adds Varano Group founder Simpson Thacher & Bartlett LLP and White & Case LLP are — Bloomberg News contributed Nick Varano. advising the buyers. Goldman Sachs is providing financing. to these reports.

12 Mergers & Acquisitions March 2020 TheMiddleMarket.com

012_MAJ0320 12 2/24/2020 4:40:09 PM Watercooler

Warren Buffett sheds newspapers

Berkshire Hathaway sells BH Media

Berkshire Hathaway Inc. (NYSE: BRK.A agreed to sell its BH Media unit and its 30 daily newspapers to Lee Enterprises Inc., which owns papers including the St. Louis Post-Dispatch, for $140 million

ADOBE STOCK in cash. Lee has been managing the papers for Buffett’s company since Duff & Phelps changes hands 2018, and Berkshire is loaning Lee the money for the purchase. Stone Point, Further Global, purchase Buffett, who got a job delivering the financial services firm papers as a teenager and invested in the industry to capitalize on its one-time local advertising stronghold, lamented last Stone Point Capital and Further Global are buying financial year that most newspapers are “toast.” services firm Duff & Phelps from Permira Funds for $4.2 bil- BH Media, which owns papers across the ® lion. Permira is keeping a stake in the target. Duff & Phelps country, has been cutting jobs for years advises companies on valuation, corporate finance, investi- to cope with declining ad revenue. TH gations, disputes, cybersecurity, compliance and regulatory “We had zero interest in selling the 13 ANNUAL matters. group to anyone else for one simple NDUSTRIAL ONFERENCE Duff & Phelps’ clients include 70 percent of top-tier pri- reason: We believe that Lee is best I C vate equity, law firms and hedge funds. The firm bought cy- positioned to manage through the bersecurity company Kroll in 2018 and claims and noticing industry’s challenges,” Buffett said in a JUNE 4, 2020 | 2 PM - 6:30 PM administrator Prime Clerk in 2019. Duff & Phelps has about statement Wednesday. NEW YORK ATHLETIC CLUB 3,500 professionals worldwide. “We are thrilled to have the In 2018, Buffett acknowledged that opportunity to partner with Duff & Phelps again and par- he was surprised that the decline in The Industrial sector is changing rapidly with advancements in technology, AI, and data analytics. How will these advancements ticipate in the next phase of growth for the company,”says demand for newspapers hadn’t let up drive value and deals in middle market industrial transactions. Stone Point CEO Chuck Davis. and that his company hadn’t found a Please attend to network and learn more from key industry “The firm maintains a strong brand position and an out- successful strategy to combat falling executives and private equity decision makers. standing entrepreneurial culture that will drive its continued advertising and circulation. success.” Duff & Phelps is not the only bank to announce a The Lee sale will include Buffett’s Vikash Magdani Executive Director, ACG NY deal recently. Earlier in January, Piper Jaffray completed its hometown Omaha World-Herald and [email protected] merger with Sandler O’Neil to become Piper Sandler Cos. Buffalo News, a paper he’s owned for 347.633.7734 (NYSE: PIPR). more than four decades. [email protected] UBS Investment Bank, Goldman Sachs (NYSE: GS), Ever- It’s a rare move for the conglomer- core and Kirkland & Ellis are advising Duff & Phelps. Skad- ate as Buffett has long said that he den, Arps, Slate, Meagher & Flom LLP is advising Permira. prefers to hold onto businesses. M&A Simpson Thacher & Bartlett LLP and White & Case LLP are — Bloomberg News contributed advising the buyers. Goldman Sachs is providing financing. to these reports.

TheMiddleMarket.com March 2020 Mergers & Acquisitions 13

013_MAJ0320 13 2/24/2020 4:45:51 PM Private Equity Perspective

overall. Direct lending funds, propelled by the threat of further regulation that would curtail lending from traditional banks, continue to fill the void and lend heavily to middle market companies. Additionally, private debt keeps attracting investors thirsty for yield in a low- growth regime. As capital has flooded in and AUM has skyrocketed more than 350 percent in the past decade, many industry observers fear investors have taken on

BLOOMBERG NEWS more risk than they realize.” Looking ahead, the report writers were cautiously opti- Record year for fundraising mistic. “Many of the secular tailwinds remain intact, Blackstone’s $26 billion fund marked the largest buyout fund meaning fundraising should ever raised, as appetite for the asset class grew remain robust heading into 2020,” says the report. By Mary Kathleen Flynn “However, the oft-discussed threat of an impending recession could finally put Private capital fundraising posted a ban- institutional investors increased their alloca- a meaningful dent in the ner year in 2019, with $888 billion raised tions to private markets, generally by lower- fundraising totals, and LPs’ across 1,064 funds, the most private capital ing their allocations to hedge funds and/or desire to co-invest and ever raised on an annual basis, according to public equities. execute deals directly may PitchBook’s Private Fund Strategies Report. Venture capital fundraising figures fell reduce the need for these The $26 billion flagship vehicle raised by slightly from the previous year, but PitchBook investors to make fund com- Blackstone marked the largest buyout fund says the fundraising outlook for VC remains mitments.” ever. bright. “U.S.-based funds in 2019 had a gar- For ongoing coverage of “Globally, PE firms raised more money gantuan year for investment realizations and private equity fundraising, than they have in any prior year, closing on saw exit value more than double YoY, which see Mergers & Acquisitions’ nearly half a trillion dollars with LPs plowing will eventually turn into distributions to LPs. weekly column on www. both freshly allocated capital and reinvested As LPs receive their cash, we expect them to themiddlemarket.com. And distributions into the strategy,” says the re- recycle it into new venture funds.” for more analysis on 2019, port. “Many GPs sought to capitalize on the Private debt fundraising rebounded in turn to page 30 of this favorable environment by raising substan- 2019, notching the second-highest amount of issue to read profiles of Au- tially larger amounts than they had for their capital raised annually in the strategy’s his- dax, HarbourVest, Genstar previously marketed funds.” tory, says the report. “As in other private mar- and other top firms that The role private funds play in institutional ket strategies, the number of funds closed were prolific throughout portfolios continued to grow. On average, fell YoY despite more capital being raised the year. M&A

14 Mergers & Acquisitions March 2020

014_MAJ0320 14 2/24/2020 4:37:47 PM The Buyside

business for $225 million. The target operates five Taking a new path logistics warehouses. Also, J.B. Hunt Transport Services XPO Logistics is selling assets and has hired a new CFO to Inc. (Nasdaq: JBHT) has lead the process acquired RDI Last Mile Co., which offers logistics and By Demitri Diakantonis delivery services. Automation and robot- ics is also a big need in the logistics sector. E-com- The transporta- alternatives,” Jacobs told CNBC. “We were merce company Shopify tion and logistics looking for a CFO with good relevant experi- Inc. (NYSE: SHOP) acquired sector is fragment- ences. He’s a well-rounded CFO, he’s tested, 6 River Systems for $450 ed, and companies proven, lots of experience in divestitures, million. 6 River Systems in the sector have asset sales and spinoffs.” uses cloud-based software been making deals XPO’s timing is good: M&A in the logistics and mobile robots called as they look for space is being driven by a demand for faster “Chuck” that assist employ- growth opportuni- shipping and a race to add more fulfillment ees with inventory replen- ties. There were $47 centers. More local fulfillment centers mean ishment, picking, sorting billion in transporta- faster delivery times and lower last-mile and packing. tion deals announced in North America in costs, which are costs for the last legs of XPO plans to accelerate 2019, a 47 percent rise from 2018, according deliveries for both retailers and customers. the pace of adding automa- to Bloomberg News. Some examples: C.H. Robinson World- tion in its warehouses, and XPO Logistics Inc. (NYSE: XPO) has been wide Inc. (Nasdaq: CHRW) is buying the company hopes it will very active, making 19 deals worth $7.5 bil- Roadrunner Transportation Systems Inc.’s be in a better position to lion since CEO Bradley Jacobs took over in (NYSE: RRTS) prime distribution services drive future growth. M&A 2011. Now XPO wants to slim down and is considering selling one or more assets. The company has not specified which units are for sale, mentioning only that it plans to hold on to its North American less-than- truckload business. “The process is off to an excellent start. There’s a lot of good momentum more than we had expected,” Jacobs told investors. To help lead the process, XPO named David Wyshner as chief financial officer. Wyshner most recently served as CFO of Wyndham Hotels & Resorts Inc., a spin-off of Wyndham Worldwide Corp. Wyshner led Wyndham’s $2 billion purchase of La Quinta Holdings in 2018. “He will certainly be a key member of the

team that is leading that review of strategic XPO LOGISTICS

TheMiddleMarket.com March 2020 Mergers & Acquisitions 15

015_MAJ0320 15 2/24/2020 4:38:19 PM TheMiddleMarket.com

016_MAJ0320 16 2/24/2020 5:58:46 PM A look at how five of the biggest tech companies explore new territory through early-stage investments

By Demitri Diakantonis

Once venture capital-backed startups themselves, today’s tech giants know a thing or two about VC seed money. It’s fitting that many of them have created corporate venture capital groups of their own. These CVCs help their owners experi- ment and nurture new technologies and ideas in the early stages, without requiring the commitment of an acquisition. The CVC strategy often augments a company’s research and development efforts as well as complementing its M&A strategy. Middle-market dealmakers would be wise to track the VC investments of the five companies we highlight in this story: Amazon, Google, Intel, Microsoft and Salesforce. A CVC fund can be formed either as the independent arm of a corporation or as a dedicated fund within the same company. In the past, strategic buyers invested only in tech companies that directly fit with their core products. But as time went on, CVC funds started behaving more and more like traditional venture capital funds. Using venture capital has advantages for strategic buyers. One is that they can gain access to new technologies while doing due diligence for potential deals. Corporations are partnering with AI startups in particular as they look for companies that will help them compete with new players. For example, Microsoft has partnered with KenSci, which developed AI software that predicts care and cost risks for patients. AI startups raised a worldwide record of $26.6 billion in 2019, compared to about $22 billion in 2018, according to CB Insights.

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and we want to continue to make the entire smart home experience even simpler and more convenient,” says Alexa Fund director Paul Bernard. It’s not just smart home technology that Alexa Fund is interested in: The fund is targeting businesses in education software. Alexa Fund was among the investors that closed a seed funding round in Bamboo Learning at the end of 2019. Bamboo Learning has developed an Alexa skill that allows families in more than 80 countries learn about historical figures, including writers, scientists, musicians, social BLOOMBERG NEWS BLOOMBERG NEWS justice activists and artists.

Hey Alexa… “Customers love using Google’s trifecta Alexa to control their Amazon formed a venture capital fund to find more connected devices and CapitalG, Gradient Ventures and GV allow Google to technologies for Alexa devices invest in AI and other technologies we want to continue to make the entire smart The Alexa Fund, Amazon.com Inc.’s The Alexa Fund has specific invest- home experience even Businesses are monitoring cus- (Nasdaq: AMZN) venture capital fund, ment criteria: It’s looking for compa- simpler.” tomer behavior and aiming to offer invests up to $200 million in VC in nies that can offer convenience via better experiences through artificial voice technology companies. The fund one’s voice, and businesses that solve intelligence, and this is creating in- focuses on hardware products both hard problems in creative ways and “Bamboo Learning is a true investment opportunities for technology inside and outside the home, busi- are a good fit with the Alexa Skills Kit novator in developing entertaining giants. Enter Alphabet Inc.’s (Nasdaq: nesses that deliver new services to or Alexa Voice Service. Alexa Skills Kit educational Alexa skills like Bamboo GOOG) Gradient Ventures, a venture devices enabled by Amazon’s Alexa is a set of tools that build apps for the Luminaries,” adds Bernard.” capital arm that launched in 2017 and and companies that can contribute to device; Alexa Voice Service is built into Venture capital is just one prong focuses on early-stage AI startups. the science behind voice technology. Internet-connected devices that have of Amazon’s strategy for develop- “While artificial intelligence has That includes text to speech, natural a microphone and a speaker. ing voice-assisted technology. On its been around for a long time, most AI language, automatic speech recogni- In 2020, Alexa Fund participated M&A prong, the company bought data companies are just getting started, tion and artificial intelligence. in a Series A round of VC funding for analysis and search engine company which is why we primarily invest in “We believe experiences designed Dublin-based Sweepr. Sweepr’s smart Graphiq, which collects and organizes early-stage rounds,” Gradient states around the human voice will funda- technology offers technical support product details to make it easier for on its website. mentally improve the way people use for Internet-connected homes without people to get verbal answers. Gradient led a Series A round of VC technology,” Amazon’s website states. having to go through customer service. In research and development, investment in 2019 in behavioral bio- Voice and text-assisted technology, The program delivers specific instruc- Amazon has developed Alexa-powered metrics company Typing DNA, which including the Alexa device, is becom- tions, photographs and videos in an earbuds that have a built-in voice uses AI to authenticate user identities ing ubiquitous in everyday shopping easy-to-understand format that are assistant. The company has also de- based on how they type. routines. Voice shopping on Alexa is customized for each person. veloped early-stage smart glasses that “With global regulation impacting catching on quickly, ranging from or- Sweepr can answer everyday simple access Alexa with a push of a button. face-recognition-based authentica- dering food to restocking refrigerators, questions such as “Why won’t Netflix As Amazon rolls out more voice- tion and hackers targeting SMS- and investors are figuring out how to load?” “Customers love using Alexa enabled technologies, it will look for based two-factor authentication, take advantage. to control their connected devices startups to help the company grow. typing biometrics is the best form

18 Mergers & Acquisitions March 2020 TheMiddleMarket.com

018_MAJ0320 18 2/24/2020 5:58:52 PM and we want to continue to make the people read and speak in many of the entire smart home experience even world’s most popular languages for simpler and more convenient,” says free, along with a premium service. Alexa Fund director Paul Bernard. The company, which says has more It’s not just smart home technology than 30 million users, also teaches that Alexa Fund is interested in: The fictional languages, such as Klingon. fund is targeting businesses in educa- The online language learning market tion software. Alexa Fund was among will top $20 billion by 2026, predicts the investors that closed a seed fund- Verified Market Research. Duolingo ing round in Bamboo Learning at the has been investing in AI and machine end of 2019. Bamboo Learning has learning so it can customize lessons developed an Alexa skill that allows to individual learners as a human families in more than 80 countries teacher might. learn about historical figures, including writers, scientists, musicians, social “Typing biometrics BLOOMBERG NEWS justice activists and artists. is the best form of identifying people “Customers love using Google’s trifecta without compromising Alexa to control their privacy or security.” connected devices and CapitalG, Gradient Ventures and GV allow Google to invest in AI and other technologies Google’s third fund, GV (formerly we want to continue to known as Google Ventures), invests in make the entire smart enterprise and frontier tech, includ- home experience even Businesses are monitoring cus- of identifying people without coming AI. GV has backed more than 400 simpler.” tomer behavior and aiming to offer promising privacy or security,” says companies since it was formed in better experiences through artificial Gradient Ventures general partner 2009, and it manages more than $4.5 intelligence, and this is creating in- Darian Shirazi. billion. “Bamboo Learning is a true investment opportunities for technology Google has also expanded its AI GV recently invested in Viz.ai, novator in developing entertaining giants. Enter Alphabet Inc.’s (Nasdaq: portfolio through M&A. In 2018, the which uses AI to help doctors and educational Alexa skills like Bamboo GOOG) Gradient Ventures, a venture company acquired Onward, an AI- medical professionals detect early Luminaries,” adds Bernard.” capital arm that launched in 2017 and powered chat services company that signs of stroke. Viz.ai uses deep- Venture capital is just one prong focuses on early-stage AI startups. helps businesses connect to custom- learning algorithms to look for stroke of Amazon’s strategy for develop- “While artificial intelligence has ers. symptoms in a CT scan and alerts ing voice-assisted technology. On its been around for a long time, most AI Google has other VC funds that doctors. “By alerting the right doctor M&A prong, the company bought data companies are just getting started, back AI-related companies. For ex- at the right time and synchronizing analysis and search engine company which is why we primarily invest in ample, Google’s growth equity fund, care, Viz has the potential to signifi- Graphiq, which collects and organizes early-stage rounds,” Gradient states called CapitalG, led a Series F round cantly reduce the time to treatment product details to make it easier for on its website. of VC investment in language learn- and greatly increase a patient’s people to get verbal answers. Gradient led a Series A round of VC ing application Duolingo in December chances of a good outcome,” Viz.ai In research and development, investment in 2019 in behavioral bio- 2019. “Duolingo has been adding says. Amazon has developed Alexa-powered metrics company Typing DNA, which users and revenue at an impressive Google also has long term AI proj- earbuds that have a built-in voice uses AI to authenticate user identities pace, continuing to solidify their posi- ects of its own in the pipeline such as assistant. The company has also de- based on how they type. tion as the number one way to learn wearable sensors, real-time transla- veloped early-stage smart glasses that “With global regulation impacting a language globally,” says CapitalG tions and technology that detects access Alexa with a push of a button. face-recognition-based authentica- general partner Laela Sturdy. Since sign language. As Amazon rolls out more voice- tion and hackers targeting SMS- it was founded in 2013, CapitalG has Looking ahead, AI will remain an enabled technologies, it will look for based two-factor authentication, invested in more than 25 companies. important technology for Google and startups to help the company grow. typing biometrics is the best form Duolingo, founded in 2011, lets other startups that will seek funding.

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data into business value and driving meaningful revenue for the company,” Intel adds in a release. Besides AI, Intel is looking to grow in other sectors, such as real estate software. Demand for real estate tech is rising, as firms rely on technology to assist them in managing their deals and properties, driving deal activity. Intel Capital recently backed Cherre, a Software-as-a-Service provider for the real estate industry. Cherre offers potential investment data on more than 170 million properties. BLOOMBERG NEWS BLOOMBERG NEWS “Intel’s AI strategy is Diversified investing grounded in the belief Investing abroad that harnessing the Intel’s 30-year old VC fund focuses on AI and real estate power of AI to improve Microsoft’s MI2 opened a European office to ramp up its technology business outcomes dealmaking in the region requires a broad mix of technology.” Intel Capital, the venture capital which remove some of the mystery of Founded in 2016, and formerly known arm of Intel (Nasdaq: INTC), was AI technology, will continue to gain as Microsoft Ventures, MI2 touts itself formed in 1991. Since then, the fund importance, and we look forward to “The global real estate industry is as having “the agility and pace of a has invested more than $12 billion in helping them accelerate AI adoption undergoing a transformation, cata- startup, getting deals done quickly and more than 1,500 companies, and 677 and address the need for explain- lyzed by massive data flows and the focused on the value-add that we can portfolio companies have either gone ability.” application of artificial intelligence,” bring to you as a collaborative partner, public or been involved in a merger. Intel is making acquisitions to ac- says Intel Capital senior manag- not just your investor,” according to Broadcom Inc. (Nasdaq; AVGO) and celerate growth in AI. In 2019, Intel ing director Trina Van Pelt. “Despite its website. Microsoft Corp.’s (Nasdaq: VMware Inc. (NYSE: VMW) are some paid $2 billion for Habana Labs, a its substantial impact on the global MSFT) venture capital fund concentrates of Intel Capital’s past investments. developer of AI training technology economy, this sector is still in its on AI and cloud computing. Artificial intelligence is one area for data centers. “This acquisition infancy when it comes to data-centric M12 recently invested in German that Intel Capital focuses on. The fund advances our AI strategy, which is to investing and underwriting decisions. travel software startup Comtravo. The invested in AI company Kyndi in 2019. provide customers with solutions to fit We see Cherre as critical infrastruc- target’s software translates emails and Kyndi helps businesses find hard-to- every performance need – from the ture to accelerate the future of this other text-based requests into data, and locate information within collections intelligent edge to the data center,” industry.” then uses artificial intelligence to send of documents without requiring large, says Navin Shenoy, executive vice In other recent investments, Intel customized travel options to custom- labeled data. president and general manager of the Capital and Eight Roads Ventures led ers based on previous searches and “Enterprises are turning to AI to data platforms group at Intel. a funding round in human resources bookings. Companies are implement- take advantage of new opportuni- “Intel’s AI strategy is grounded in technology company Gloat in De- ing text-supported software, such as ties and to solve pressing business the belief that harnessing the power cember 2019. Gloat’s software helps natural language processing, to improve problems, and we expect AI’s use of AI to improve business outcomes businesses retain employees through customer experiences, and they are at- in business will continue to grow as requires a broad mix of technol- AI that compares employees’ work tracting investor attention as a result. the technology matures,” says Nick ogy, hardware and software, and full skills, interests and career histories “Comtravo is disrupting the huge Washburn, senior managing director ecosystem support. Today, Intel AI to recommend potential projects and business travel market through deep of Intel Capital. “Solutions like Kyndi’s, solutions are helping customers turn career-advancing opportunities. automation and unique access to

20 Mergers & Acquisitions March 2020 TheMiddleMarket.com

020_MAJ0320 20 2/24/2020 5:58:59 PM data into business value and driving vertising, social engagement tools and meaningful revenue for the company,” parental controls. “Making the internet Intel adds in a release. safer for kids is a sector-agnostic mis- Besides AI, Intel is looking to grow sion,” says SuperAwesome CEO Dylan in other sectors, such as real estate Collins. “As increasing numbers of com- software. Demand for real estate tech panies outside of the core kids sector is rising, as firms rely on technology to realize that children cannot be ignored, assist them in managing their deals we’ve begun to shift our horizons to the and properties, driving deal activity. wider internet.” Intel Capital recently backed In the U.S., M12 backed Evisort, which Cherre, a Software-as-a-Service uses AI to automate processing and provider for the real estate industry. tracking of corporate contracts. Evisort Cherre offers potential investment reviews, analyzes, approves and tracks data on more than 170 million contracts, invoices and purchase orders. properties. BLOOMBERG NEWS MI2 opened a new “Intel’s AI strategy is London office to seek grounded in the belief Investing abroad opportunities across the that harnessing the AI, big data, analytics, power of AI to improve Microsoft’s MI2 opened a European office to ramp up its cloud infrastructure, business outcomes dealmaking in the region machine learning and requires a broad mix of Software-as-a-Service technology.” Founded in 2016, and formerly known travel providers,” says M12 partner Lior sectors. as Microsoft Ventures, MI2 touts itself Litwak. “We were very impressed with “The global real estate industry is as having “the agility and pace of a the company’s vision of increasing ef- Aside from dealmaking, internally undergoing a transformation, cata- startup, getting deals done quickly and ficiencies for both businesses and travel Microsoft is investing in AI research in lyzed by massive data flows and the focused on the value-add that we can agents without compromising on high- the healthcare sector. The company application of artificial intelligence,” bring to you as a collaborative partner, quality service and traveler experience.” recently announced plans for a five-year, says Intel Capital senior manag- not just your investor,” according to The International Air Transport Asso- $40 million AI initiative for global health ing director Trina Van Pelt. “Despite its website. Microsoft Corp.’s (Nasdaq: ciation predicts that passenger growth challenges and research. The program is its substantial impact on the global MSFT) venture capital fund concentrates will double in the next 20 years. With designed to help research organizations economy, this sector is still in its on AI and cloud computing. the rise of low-cost carriers, airlines are develop diagnostics, treatments and infancy when it comes to data-centric M12 recently invested in German competing to gain more passengers preventive measures. investing and underwriting decisions. travel software startup Comtravo. The and are looking for ways to make their “We know that putting this powerful We see Cherre as critical infrastruc- target’s software translates emails and flying experiences standout. technology into the hands of experts ture to accelerate the future of this other text-based requests into data, and For M12, the firm is ramping up its tackling this problem can accelerate new industry.” then uses artificial intelligence to send investment efforts in European start- solutions and improve access for under- In other recent investments, Intel customized travel options to custom- ups. The fund recently opened a new served populations,” Microsoft president Capital and Eight Roads Ventures led ers based on previous searches and London office to seek opportunities Brad Smith said in a statement. a funding round in human resources bookings. Companies are implement- across the AI, big data, analytics, cloud In 2019, Microsoft formed a partner- technology company Gloat in De- ing text-supported software, such as infrastructure, machine learning and ship with health insurer Humana Inc. cember 2019. Gloat’s software helps natural language processing, to improve Software-as-a-Service sectors. (NYSE: HUM) that gives Humana access businesses retain employees through customer experiences, and they are at- Earlier in 2020, M12 participated in to Microsoft’s cloud and AI resources. AI that compares employees’ work tracting investor attention as a result. a funding round for London-based Su- The deal is aimed at making more digi- skills, interests and career histories “Comtravo is disrupting the huge perAwesome, a platform that allows for tal health services available to seniors. to recommend potential projects and business travel market through deep safe web browsing for kids. The com- Microsoft indicates that it sees addition- career-advancing opportunities. automation and unique access to pany’s products include kid-friendly ad- al similar partnerships down the road.

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behind the curtains and on the store floor. With NewStore, retailers oper- ate a seamless end to end experience across all touchpoints, unlocking in- store revenue drivers including endless aisle, mobile checkout, store inventory and clienteling.” “Despite stores being a source of great frustration, they also represent a major opportunity,” says NewStore CEO Stephan Schambach. “This gives customers even more choice in how they deliver omnichannel experiences to keep pace with the rapidly changing needs of their BLOOMBERG NEWS shoppers,” adds Salesforce Commerce Cloud CEO Mike Micucci. Salesforce is also making acquisi- Buying into new habits tions in the retail tech sector. In 2020, the company acquired Evergage, Salesforce Ventures invests in retail data providers that which was previously backed by Ar- can meet shopper demands rowroot Capital, G20 Ventures and Point Judith Capital. Evergage uses data to monitor customer behavior Salesforce Ventures is the venture fund, $100 million Canada trailblazer and helps retailers offer personalized capital arm of Salesforce.com Inc. fund and $50 million Salesforce im- services. (NYSE: CRM). Since 2009, the fund pact fund. Since 2009, Salesforce has “Evergage’s mission has always has invested in over 375 companies. backed over 300 technology startups been to personalize the world, and Salesforce Venture’s previous invest- across 20 countries. we’ve been doing that one client at a ments include DocuSign, GoCard- One industry where Salesforce Ven- time for nearly 10 years,” says Ever- less, Guild Education, nCino, Twilio tures looks to help companies is retail, gage CEO Karl Wirth. “Now, as a part and Zoom. Salesforce Ventures says which relies intensely on technology of Salesforce, we’ll be able to do what it invests in “the next generation of for everything from predicting what we do better and at a much greater enterprise technology that extends customers want to delivering orders scale and pace than we ever could the power of the Salesforce Intelligent quickly. Retailers are under immense before.” Customer Success Platform, helping pressure to adapt to the rapidly In a recent similar deal from companies connect with their custom- changing consumer landscape, and Salesforce Ventures, the fund co-led a ers in entirely new ways” and describes give shoppers what they demand. $479 million VC growth funding round itself as “building the world’s largest Earlier in 2020, Salesforce Ventures in cloud data provider Snowflake. ecosystem of enterprise cloud compa- has invested in Omnichannel-as-a- The latter has worked with Conagra nies and extending that technology to Service provider NewStore, which Brands Inc. (NYSE: CAG), JetBlue Air- customers.” helps retailers run stores from iPhones. ways Corp. (Nasdaq: JBLU) and Office Salesforce Ventures has at least “Retailers have long faced hurdles Depot Inc. (Nasdaq: ODP). seven active venture capital funds fo- in offering a seamless interaction “When consumer expectations cused on global regions. They include between online and brick-and-mortar,” change faster than the speed of busi- the $50 million consultant trailblazer NewStore says in a press release. ness, you can’t afford to rely on frag- fund, $125 million Europe trailblazer “Connecting legacy systems and out- mented or stale data to make daily fund, $50 million Australia trailblazer dated technologies is time-consuming decisions that affect your bottom line,” fund, $100 million Japan trailblazer and cumbersome, creating friction Snowflake states on its website. M&A

22 Mergers & Acquisitions March 2020

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Analysts are already forecasting slowed growth for China, due to CO- VID-19. While the country’s economic growth was 6.0 percent in the fourth quarter of 2019, it may fall to as low as 3.5 percent in the first quarter of 2020, if the spread of the virus is not con- tained fast enough for manufacturing production to resume to normal levels, Morgan Stanley analysts wrote in a Feb. 19 report. While factories had started to come online, analysts found that production had only reached 30 to 50 percent of normal levels.

Earnings Calls With China’s factories producing a huge range of goods and parts, including autos, apparel, toys and smart- phones, for customers all over the world, it’s not surprising the impact is already being felt far beyond the country’s borders. The coronavirus emerged as a dominant theme in the earnings releases and conference calls of S&P BLOOMBERG NEWS 500 companies. The term “coronavirus” was used at least once in 38 percent of the 364 earnings calls that were held VIRAL IMPACT from Jan. 1 through Feb. 13, according to Brian Bunker Managing Director, Commercial Growth, The Riverside Co. By Mary Kathleen Flynn The coronavirus How are factory closings affecting the supply chain? The virus hit over Chinese New Year when factories were closed, and the high number of migrant workers had returned to is already slowing The impact of COVID-19, also known as the coronavirus, on the world’s their home town/village. Fortunately, large orders are shipped prior to the holiday to cover 2-3 weeks of factory closure. economy is likely to be significant. How it will play out in M&A and private down China’s However, eventually, there will be inventory shortages at overseas and domestic customers, stock-outs will, inevitably, growth, stalling equity is difficult to discern this early in the spread of the virus. To get a sense impact 1H revenue at portfolio companies. It is still too early to scope the full impact; however, portfolio companies are the world’s of the ramifications for the middle market, Mergers & Acquisitions examines implementing action plans, assessing stock levels, communicating with customers and trying to shift sourcing to other supply chain several factors, including the current impact on China’s economic growth; how countries. Fortunately, due to the tariff dispute, this process began 18 months ago, so, in general, dependence on China the virus was discussed in the earnings calls of U.S. public companies in January has been somewhat reduced during that time. In general, extended closure of factories impacts sales as well as Ebitda; and dampening and February; and the views of two prominent dealmakers who are based in staff still have to be paid and the facility/equipment maintained. venture capital Hong Kong. As this is an ongoing story, we’ll continue evaluating the economic fundraising. How and business effects. How is the virus affecting sales of consumer goods in China? are middle-market First, let’s consider the impact of the earlier severe acute respiratory syn- In s ome c ities, r esidents a re o nly a llowed o ut o nce e very 2 d ays t o b uy e ssentials; i n g eneral, t he p opulation i s n ot drome virus. SARS claimed around 800 lives throughout the world and shaved venturing out, thus consumer spending in China will be heavily impacted. This will affect our portfolio companies that sell dealmakers being through Chinese retail outlets. Given road transport restrictions, e-commerce sales will also be affected as goods cannot 0.5 to 1 percentage points off China’s growth in 2003. Back then, China was the affected? be delivered. Staff are mostly working from home and need to be paid even though they are not generating much revenue world’s sixth largest economy. Today, it is the second, behind only the U.S. apart from essential sales. Obviously, there will be some winners such as suppliers of face masks and hand sanitizer.

24 Mergers & Acquisitions March 2020 TheMiddleMarket.com

024_MAJ0320 24 2/24/2020 4:35:59 PM Feature

Earnings Calls With China’s factories producing a huge range of goods and parts, includ- FactSet. The industrial, IT and health- resume around the country, but we are ing autos, apparel, toys and smart- care sectors accounted for the highest experiencing a slower return to normal phones, for customers all over the world, number of companies discussing the conditions than we had anticipated,” it’s not surprising the impact is already topic. the company said in a statement. being felt far beyond the country’s MarketWatch compiled a slew of the Apple generates about 15 percent of borders. The coronavirus emerged announcements in mid-February. Here its revenue from China, and many of its as a dominant theme in the earnings are a few: products are manufactured there. releases and conference calls of S&P Apple Inc. (Nasdaq: AAPL) warned it Coca-Cola Co. (NYSE: KO) CEO BLOOMBERG NEWS 500 companies. The term “coronavirus” would not meet second-quarter finan- James Quincey said the outbreak of se- was used at least once in 38 percent of cial expectations, because production vere acute respiratory syndrome (SARS) the 364 earnings calls that were held had slowed or been halted in China due in 2003 and 2004 was less of a concern from Jan. 1 through Feb. 13, according to to the outbreak. “Work is starting to than the current virus. The Chinese mar-

Brian Bunker Managing Director, Commercial Growth, The Riverside Co.

How are factory closings affecting the supply chain? The virus hit over Chinese New Year when factories were closed, and the high number of migrant workers had returned to their home town/village. Fortunately, large orders are shipped prior to the holiday to cover 2-3 weeks of factory closure. However, eventually, there will be inventory shortages at overseas and domestic customers, stock-outs will, inevitably, impact 1H revenue at portfolio companies. It is still too early to scope the full impact; however, portfolio companies are implementing action plans, assessing stock levels, communicating with customers and trying to shift sourcing to other countries. Fortunately, due to the tariff dispute, this process began 18 months ago, so, in general, dependence on China has been somewhat reduced during that time. In general, extended closure of factories impacts sales as well as Ebitda; staff still have to be paid and the facility/equipment maintained.

How is the virus affecting sales of consumer goods in China? In some cities, residents are only allowed out once every 2 days to buy essentials; in general, the population is not venturing out, thus consumer spending in China will be heavily impacted. This will affect our portfolio companies that sell through Chinese retail outlets. Given road transport restrictions, e-commerce sales will also be affected as goods cannot be delivered. Staff are mostly working from home and need to be paid even though they are not generating much revenue apart from essential sales. Obviously, there will be some winners such as suppliers of face masks and hand sanitizer.

TheMiddleMarket.com March 2020 Mergers & Acquisitions 25

025_MAJ0320 25 2/24/2020 4:36:14 PM Feature

ket makes up 10 percent of Coca-Cola’s the current sales mix slanted heavily to- The impact is already being felt global volume. “China’s economy was in ward food and consumables, as well as in the world of venture capital, and a different place when SARS happened,” some increased expenses related to the private equity may not be far behind. he said. “It’s worth noting that China’s outbreak, we could see a couple of cents Chinese startups are struggling to economy is much bigger, and this could negative impact in Q1,” Walmart CFO raise funds as the coronavirus epi- become more connected to the rest of Brett Biggs said on an earnings call. demic complicates deal talks, reports the world.” In addition, Bradley Jacobs, the- PitchBook. Since the beginning of Hasbro Inc. (Nasdaq: HAS) continues CEO of XPO Logistics (NYSE: XPO) told the year, venture capital fundrais- to have office and third-party factory analysts during a fourth quarter earnings ing in China has fallen by more than closures in China as a result of the call in early February that the corona- half, compared with the same period outbreak. The company said that China virus outbreak and travel restrictions last year. It’s yet another blow to the is responsible for about two-thirds of its have not damped demand for logistics region’s venture capital scene, which global sourcing. “The biggest unknown yet. A significant acquirer of middle- has suffered from waning confidence right now is how quickly the manufac- market companies, XPO, headquartered from investors in recent years. The turing factories can get their production in Greenwich, Connecticut, operates 8 backup of capital poses a threat to ramp back up,” said Hasbro CFO Debo- million square feet of warehouse space in cash-strapped companies but could rah Thomas. “Travel is limited, [and] Asia, including more than 1 million square also lead to a rush of deals later in the places are still closed.” feet in China. “We have not seen a no- year, predicts PitchBook. Walmart Inc. (NYSE: WMT) an- ticeable impact as of now,” Jacobs said. Nevertheless, most dealmakers are ticipates a financial impact in the first “We are watching it. Anything that slows taking the developments in stride, as quarter and potentially the second down the global economy is not good for you can see from our interviews with two quarter to its China business. “Due to the transport and logistics industry.” middle-market professionals. M&A

Neil Torpey Partner, Corporate Development, Paul Hastings

What is the impact of the coronavirus on middle-market deals and private equity-backed portfolio companies? There was a momentary pause in activity when travel restrictions were announced and certain transportation industry players curtailed their China-related activities, but the markets snapped back into shape fairly quickly as it has begun to appear likely that the issues relating to the coronavirus outbreak, while serious, will be manageable and (as with SARS) the situation will stabilize over the coming weeks as Spring and warmer weather approaches. I don’t expect there to be any material long-term negative impact on the markets or deal activity as a result of this outbreak.

Does the inability to travel to and from China make it difficult to close deals already underway? Not really, unless the investor is still doing due diligence involving travel to China (e.g., to visit physical facilities or meet with management teams) or needs to conduct face-to-face discussions with a portfolio company or its customers or suppliers— and even in those cases, lots can be done by phone or video conferencing. Once a deal is ready to be closed, most of the execution can be done by phone, email and wire, so the China travel restrictions would not tend to cause problems in doing a closing that cannot be worked around.

Does the possibility of China being cut off for a long period affect dealmakers’ confidence in investing in companies there? So far, this seems to be a low-probability issue. It is in everyone’s interest to have China back to ordinary course operations, and we would expect enormous efforts and resources to be applied to achieving this outcome.

What about other risks? The deluge of media coverage regarding the outbreak has put every country in the world on alert to the risks associated with the virus, and governments and enterprises are responding to the potential public health and other consequences of the situation. Different countries and companies will prioritize the issues presented by the crisis in different ways and allocate resources to detection and prevention and amelioration in accordance with their respective individual circumstances.

How are issues related to the virus affecting potential investments? As far as I can ascertain, the situation is not leading investors to make material changes in their medium- or long-term investment programs or strategies.

26 Mergers & Acquisitions March 2020

026_MAJ0320 26 2/24/2020 4:36:15 PM ADOBE STOCK TOP 10 Investment Banks Some of the investment banks that closed the highest volume of U.S. private equity- backed deals in 2019 have made their own acquisitions recently

By Keith Button

Houlihan Lokey, Lincoln Inter- files of the 10 firms that led the league services to alternative investment national, Jefferies Financial Group, tables in a robust year for dealmaking. managers. In that same year, the firm William Blair and Piper Sandler Cos. formed HL Finance LLC to arrange rank as the top five most active M&A 1. Houlihan Lokey senior secured leveraged loans for fi- investment banks in 2019, based on The bank has made recent acquisi- nancial sponsor-backed, privately held the volume of completed private tions itself and public corporate entities. Houlihan equity-backed deals in the U.S., ac- Houlihan Lokey Inc. (NYSE: HLI) is Lokey’s recent deals include advising cording to PitchBook. Besides advising an investment bank that offers M&A, on Givaudan’s acquisition of Ungerer & on M&A deals, the investment banks capital markets, financial restructur- Co., TPG Growth’s acquisition of Denali on the top 10 list also had a busy year ing, valuation and strategic consulting Water Solutions and Lakeview Capital with acquisitions of their own in 2019, services. In 2019, Los Angeles-based Inc.’s acquisition of Mochi Ice Cream including two acquisitions by Houlihan Houlihan Lokey agreed to acquire Co., a portfolio company of Century Lokey and three by Stifel Financial. Freeman & Co., a New York-based Park Capital Partners. Houlihan Lokey Piper Sandler Cos., was created when independent firm advising financial advised on 81 U.S. PE-backed deals in Minneapolis-based Piper Jaffray Cos. institution clients on mergers and ac- 2019, according to PitchBook. acquired New York-based Sandler quisitions and capital raising. Houlihan O’Neill & Partners in a deal represent- Lokey also made its fifth European 2. Lincoln International ing more than half of Piper Jaffray’s acquisition in four years, acquiring Ma- The bank focuses on business services, million market capitalization. The firm drid-based Fidentiis Capital to grow its consumer, energy and healthcare also had another acquisition in 2019 European corporate finance business. Lincoln International is a middle- and sold a company to exit the tra- In 2018, the bank acquired BearTooth market investment bank that provides ditional asset management business. Advisors, a firm that provides strate- M&A, growth equity, debt advisory, Here are Mergers & Acquisitions’ pro- gic advisory and placement agency restructuring, joint ventures and valua-

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tion services. The firm was founded in Networks Ltd. (Nasdaq: GILT) on its Cos. (NYSE: PIPR) was formed in its sale to Tooling Tech Group, a port- 1996 and has more than 570 employ- $533 million sale to Comtech Telecom- January 2019 when Piper Jaffray Cos., folio company of GenNx360 Capital ees across 20 offices in 16 countries. munications Corp. (Nasdaq: CMTL). a middle-market investment bank, Partners; and advising St. Matthews Among the sectors that Lincoln Jefferies advised AmeriLife Group on acquired Sandler O’Neill & Partners, a Imports on its sale to Joe Hudson’s focuses on are business services, con- the sale of a majority stake in the firm New York-based boutique investment Collision Centers, a portfolio company sumer, energy, healthcare, industrials from J.C. Flowers & Co. to Thomas H. banking boutique focused on financial of Carousel Capital. Baird Business and technology media and telecom. Lee Partners. Jefferies advised on 61 services. Piper Jaffray was dominant Owner Solutions also recently was the Lincoln, headquartered in Chicago, U.S. PE-backed deals in 2019, accord- in the healthcare sector and the deal sellside advisor for the sale of Boutique advised on 225 deals globally in 2019 ing to PitchBook. was a bid to become a leader in the Design New York from ST Media Group and more than 200 in 2018. Almost financial services sector. The deal International and Hospitality Media half of the firm’s transactions are 4. William Blair represented more than half of Piper Group to Emerald Expositions Events cross-border. Among its recent deals, The investment bank offers buyside Jaffray’s $930 million market cap, and Inc. (NYSE: EEX). Baird advised on 53 Lincoln advised Orland, Florida-based and sellside services it followed a pattern from recent years: U.S. PE-backed deals in 2019, accord- Micross Components, a portfolio com- William Blair is global boutique to fuel expansion in some sectors ing to PitchBook. pany of Insight Equity, on its merger with expertise in investment banking, through acquisition. To grow its busi- with Corfin Industries, a portfolio investment management and private ness in financial services in 2015, the 7. Raymond James Financial company of Behrman Capital. It also wealth management. The employee- firm acquired River Branch Holdings The firm provides investment banking advised Acorn Growth Cos. on its sale owned firm was founded in 1935 by LLC and BMO Capital Markets GKST and wealth management services of UK-based Aerospheres to FDH, a William McCormick Blair and has Inc. In 2016, to grow in the energy sec- Raymond James Financial Inc. portfolio company of Audax Private 1,500 employees worldwide. William tor, Piper Jaffray bought Simmons & (NYSE: RJF) is a financial services firm Equity and advised LogiNext Solutions Blair’s investment banking group of- Company International. Later in 2019, that provides investment banking and on raising growth capital from Tiger fers buyside and sellside services for Piper Sandler acquired Weeden & Co., wealth management services. The Global and Steadview Capital. Lincoln publicly traded and privately held a broker-dealer, and exited its tradi- firm, based in St. Petersburg, Florida, advised on 67 U.S. PE-backed deals in companies. From 2015 through 2019, tional asset management business was founded in 1962 by Bob James, 2019, according to PitchBook. the firm completed 593 M&A transac- with the sale of Advisory Research and went public 1983. Raymond James tions representing about $233 billion Inc. Piper Sandler advised on 55 U.S. focuses on the consumer and retail, 3. Jefferies Financial Group in value. In 2019, William Blair advised PE-backed deals in 2019, according to financial services, healthcare and The bank has completed more than on deals including the J2 Acquisi- PitchBook. industrial sectors, among others. The 650 transactions since 2016 tion Limited acquisition of APi Group company reported record net income Jefferies is a diversified financial Inc. for $2.9 billion; Sealed Air Corp.’s 6. Baird Business Owner of $268 million for its fiscal quarter services company involved in invest- (NYSE: SEE) acquisition of Automated Solutions ended Dec. 31, 2019, but its $60 mil- ment banking, capital markets, asset Packaging Systems Inc. (APS), maker The M&A advisory arm of R.W. Baird lion in investment banking M&A and management and direct investing. On of automated bagging systems, for advises lower mid-market companies advisory revenues for the quarter was the M&A side, Jefferies has completed $510 million; the Perrigo Co. plc (NYSE: Louisville, Kentucky-based Baird down 35 percent from the previous more than 650 transactions valued at PRGO) acquisition of Ranir Global Business Owner Solutions is an M&A quarter and down 29 percent from over $600 billion since the beginning Holdings LLC for $750 million; pharma advisory arm of R.W. Baird, an employ- one year before. That was despite a of 2016. About 70 percent of its M&A company Catalent Inc.’s (NYSE: CTLT) ee-owned investment bank, private eq- healthy pipeline for M&A deals, said deals were sellside transactions and acquisition of gene therapy company uity firm and wealth management firm CEO Paul Reilly. In recent deals, Ray- 60 percent involved strategic buyers. Paragon Bioservices Inc. for $1.2 billion; with about 3,500 employees. Baird mond James advised Gryphon Inves- More than 20 percent were cross- and Carbonite Inc.’s (NASDAQ: CARB) Business Owner Solutions advises tors on its acquisition of Ncontracts, a border deals. Earlier in 2020, Jefferies acquisition of Webroot Inc. for $618.5 lower middle-market and emerging provider of risk management software advised RS Energy on its sale from million. William Blair advised on 58 growth companies and their owners on for the financial services sector; and Warburg Pincus to Genstar-backed U.S. PE-backed deals in 2019, accord- business sales, mergers, acquisitions, Campus Management and Edcentric Enverus. It also advised West Der- ing to PitchBook. employee stock ownership plans, valu- college student information systems on matology on its sale to Sun Capital ations and transition planning. In 2019, their sale from Leeds Equity Partners Partners from Enhanced Healthcare 5. Piper Sandler Cos. the firm’s deals included advising the to Veritas. Raymond James advised on Partners, XCessories & Services LLC Piper Jaffray bought Sander O’Neill & Dental Care Plus Group on its sale to 52 U.S. PE-backed deals in 2019, the on its sale to Clearlake Capital from Partners, creating a powerhouse. GroupDentaQuest; advising specialty same number as Harris Williams, ac- Olympus Partners, and Gilat Satellite Minneapolis-based Piper Sandler manufacturer Alpha Integration Inc. on cording to PitchBook.

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Cos. (NYSE: PIPR) was formed in its sale to Tooling Tech Group, a port- 7. Harris Williams vestors, government agencies, private January 2019 when Piper Jaffray Cos., folio company of GenNx360 Capital The PNC subsidiary specializes in M&A individuals and families. Goldman a middle-market investment bank, Partners; and advising St. Matthews advisory services Sachs has nine investment banking acquired Sandler O’Neill & Partners, a Imports on its sale to Joe Hudson’s Harris Williams, a subsidiary of groups dedicated to certain industry New York-based boutique investment Collision Centers, a portfolio company PNC Financial Services Group Inc. sectors: consumer retail, financial in- banking boutique focused on financial of Carousel Capital. Baird Business (NYSE: PNC), is an investment bank stitutions, financial and strategic inves- services. Piper Jaffray was dominant Owner Solutions also recently was the specializing in M&A advisory services. tors, healthcare, industrials, municipal in the healthcare sector and the deal sellside advisor for the sale of Boutique The Richmond, Virginia-based firm finance, natural resources, real estate was a bid to become a leader in the Design New York from ST Media Group concentrates on the aerospace and and technology, media and telecom. financial services sector. The deal International and Hospitality Media defense, building products, business The firm, through its special situations represented more than half of Piper Group to Emerald Expositions Events services, consumer, energy and power, group, lends and invests up to $150 Jaffray’s $930 million market cap, and Inc. (NYSE: EEX). Baird advised on 53 healthcare, industrials, specialty dis- million directly to mid-sized compa- it followed a pattern from recent years: U.S. PE-backed deals in 2019, accord- tribution, technology-media-telecom nies. The special situations group pro- to fuel expansion in some sectors ing to PitchBook. and transportation sectors. Harris vides lending, mezzanine and growth through acquisition. To grow its busi- Williams, founded in 1999, recently capital to mid-market businesses in ness in financial services in 2015, the 7. Raymond James Financial advised Kronos Foods Inc., a portfolio the U.S. and in Europe. Goldman Sachs firm acquired River Branch Holdings The firm provides investment banking company of Grey Mountain Partners, advised on 44 U.S. PE-backed deals in LLC and BMO Capital Markets GKST and wealth management services on its sale to Entrepreneurial Equity 2019, according to PitchBook. Inc. In 2016, to grow in the energy sec- Raymond James Financial Inc. Partners; Integrated Global Services tor, Piper Jaffray bought Simmons & (NYSE: RJF) is a financial services firm Inc., a portfolio company of Industrial 10. Stifel Financial Company International. Later in 2019, that provides investment banking and Growth Partners, on its sale to an The firm made several acquisitions of Piper Sandler acquired Weeden & Co., wealth management services. The investment affiliate of J.F. Lehman & its own recently a broker-dealer, and exited its tradi- firm, based in St. Petersburg, Florida, Co.; and Elliott Aviation on its major- Stifel Financial Corp. (NYSE: SF) is tional asset management business was founded in 1962 by Bob James, ity recapitalization by Summit Park. It a diversified wealth management and with the sale of Advisory Research and went public 1983. Raymond James also advised Specialty Welding and investment bank. The firm’s middle- Inc. Piper Sandler advised on 55 U.S. focuses on the consumer and retail, Turnarounds, a portfolio company of market investment banking division PE-backed deals in 2019, according to financial services, healthcare and Hastings Equity Partners, on its sale to focuses on the consumer and retail, PitchBook. industrial sectors, among others. The Orix Capital Partners. Harris Williams healthcare, gaming and leisure, real company reported record net income advised on 52 U.S. PE-backed deals in estate and technology sectors. The 6. Baird Business Owner of $268 million for its fiscal quarter 2019, the same number as Raymond firm’s closed deals since 2000 have Solutions ended Dec. 31, 2019, but its $60 mil- James, according to PitchBook. averaged $388.8 million, and its 178 The M&A advisory arm of R.W. Baird lion in investment banking M&A and cross-border transaction since 2000 advises lower mid-market companies advisory revenues for the quarter was 9. Goldman Sachs Group have totaled $130 billion. St. Louis- Louisville, Kentucky-based Baird down 35 percent from the previous The firm offers a wide range of servic- based Stifel owns Eaton Partners, Business Owner Solutions is an M&A quarter and down 29 percent from es, including middle-market investing Keefe, Bruyette & Woods and Miller advisory arm of R.W. Baird, an employ- one year before. That was despite a Goldman Sachs Group (NYSE: GS) is Buckfire. In December 2019, the firm ee-owned investment bank, private eq- healthy pipeline for M&A deals, said an investment and investment man- acquired the capital markets business uity firm and wealth management firm CEO Paul Reilly. In recent deals, Ray- agement firm that offers a range of of GMP Capital Inc., a Toronto-based with about 3,500 employees. Baird mond James advised Gryphon Inves- services including: M&A and invest- independent investment bank. In 2019, Business Owner Solutions advises tors on its acquisition of Ncontracts, a ment banking, consumer banking, a Stifel subsidiary acquired MainFirst lower middle-market and emerging provider of risk management software asset management, private wealth Bank AG, an independent European growth companies and their owners on for the financial services sector; and management, direct private invest- investment bank, and Stifel acquired business sales, mergers, acquisitions, Campus Management and Edcentric ing and middle-market financing and George K. Baum & Co., an underwriter employee stock ownership plans, valu- college student information systems on investing. Its M&A services include and financial advisor. Recent deals ations and transition planning. In 2019, their sale from Leeds Equity Partners advice on mergers, sales, acquisitions, have include: advising Richard Barasch the firm’s deals included advising the to Veritas. Raymond James advised on leveraged buyouts, joint ventures, raid on its acquisition of AdaptHealth Dental Care Plus Group on its sale to 52 U.S. PE-backed deals in 2019, the defenses, spin-offs, divestitures and Holdings. Stifel advised on 37 U.S. GroupDentaQuest; advising specialty same number as Harris Williams, ac- other restructurings; its M&A services PE-backed deals in 2019, according to manufacturer Alpha Integration Inc. on cording to PitchBook. clients include businesses, private in- PitchBook. M&A

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lion directly in operating companies mostly in communications, consumer, financial, healthcare, industrial and information technology sectors. It invests in buyout, growth equity and mezzanine stages. HarbourVest has more than 600 employees, including more than 125 investment profession- ADOBE STOCK als. The firm is based in Boston with offices also in Beijing, Bogotá, Dublin, Hong Kong, London, Seoul, Tel Aviv, Tokyo and Toronto. Earlier in 2020 HarbourVest closed its flagship US fund, HarbourVest Fund XI, at $2.6 bil- TOP 10 lion. The fund invests mostly in primary partnerships in US buyouts, comple- Private Equity Firms mented by secondary investments and direct co-investments. Among its deals in 2019, HarbourVest, along with JMI The PE firms that closed the highest volume of U.S. deals in 2019 focused on software, Equity, sold software developer Intelex technology, healthcare, financial services and consumer services to Industrial Scientific, a subsidiary of Fortive Corp. (NYSE: FTV). HarbourVest closed 64 U.S. deals in 2019, according By Keith Button to PitchBook.

Audax, HarbourVest and Genstar 1. Audax Group the U.S. and Canada, with operations 3. Genstar Capital ranked as the top three most active The private equity unit takes a buy- in 21 countries. The companies are The firm partners with management private equity firms in 2019, based on and-build approach in business and consumer services, teams and a network of strategic the volume of completed deals in the Audax Group, founded in 1999, healthcare, software and technol- advisors U.S., according to PitchBook. Three invests in middle-market companies ogy, chemicals, energy, engineered Genstar Capital is a San Francisco companies tied for fourth place: Abry, through Audax Private Equity and Au- products and materials industries. PE firm that has been investing in Carlyle and Shore Capital. dax Private Debt. Audax Private Equity, Earlier in 2020, Audax Private Equity middle-market companies since 1988. Where were these PE firms looking based in Boston and San Francisco, acquired a controlling interest in Kofile Genstar partners with its management for deals? Eight of the firms on our list takes a buy-and-build investment Inc., a Dallas company that provides teams and a network of strategic name the software and technology approach, partnering with established records management systems. Audax advisors, including current and former sector among their top investment companies to create larger entities closed 87 U.S. deals in 2019, according C-level executives from the industries targets, and seven put healthcare through acquisitions and organic to PitchBook. in which it invests. The firm employs companies on their priority list. Finan- growth. The firm has invested more more than 35 professionals and man- cial services and consumer services than $6 billion in 130 platform invest- 2. HarbourVest Partners ages funds with total capital commit- are each named by five of the firms ments and 825 add-on acquisitions. The firm invests in buyout, growth ments of $17 billion. Genstar invests as industries they focus on, with four New York-based Audax Private Debt equity and mezzanine in targeted segments of only four naming business services companies. invests through first lien, stretch senior, HarbourVest Partners is global sectors: financial services, software, Fundraising from investors in 2019 led unitranche, second lien, subordi- private markets investment firm with industrial technology and healthcare, to two notable fund launches earlier nated debt and equity co-investment more than $68 billion in assets under and focuses on global companies in 2020: KKR’s $1.3 billion KKR Global solutions, with more than $19 billion management as of yearend 2019, headquartered in North America. It is Impact Fund and HarbourVest’s $2.6 invested since 2000. The private equity including primary fund investments, currently managing its ninth fund and billion HarbourVest Fund XI. team has more than 100 investment secondary investments and direct is seeking investment opportunities Here are Mergers & Acquisitions’ professionals. Audax Private Equity’s co-investments. The firm, founded in in founder-owned companies, public profiles of the top 10 firms. investments are headquartered in 1982, has invested more than $17 bil- company orphans, corporate carve-

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lion directly in operating companies outs and traditional buyouts. Among 4. The Carlyle Group mostly in communications, consumer, its recent deals, Genstar-backed The firm has invested $106 billion in financial, healthcare, industrial and Enverus, an energy data analytics equity in 650 transactions since 1990 information technology sectors. It company, acquired RS Energy Group, The Carlyle Group (Nasdaq: CG) invests in buyout, growth equity and an oil-and-gas-focused technology is a global investment firm with $224 mezzanine stages. HarbourVest has firm; Genstar sold plastic container billion under management. The firm’s more than 600 employees, including maker Pretium Packaging to Clear- corporate PE business, with 272 in- more than 125 investment profession- lake Capital Group; and Genstar sold vestment professionals in 22 offices, ADOBE STOCK als. The firm is based in Boston with ECM Industries, provider of electrical is invested in 181 portfolio compa- offices also in Beijing, Bogotá, Dublin, products, to Sentinel Capital Partners. nies through 35 buyout and growth Hong Kong, London, Seoul, Tel Aviv, Genstar closed 58 U.S. deals in 2019, capital funds. The buyout teams invest Tokyo and Toronto. Earlier in 2020 according to PitchBook. through funds with $79 billion under HarbourVest closed its flagship US management that focus on the U.S. fund, HarbourVest Fund XI, at $2.6 bil- 4. Abry Partners and other geographic areas globally, TOP 10 lion. The fund invests mostly in primary The firm backs companies in a wide as well as technology and financial partnerships in US buyouts, comple- range of industries with four funds services. The growth teams invest Private Equity Firms mented by secondary investments and Abry Partners, a PE firm head- through funds with $7 billion under direct co-investments. Among its deals quartered in Boston, focuses on management focused on middle- in 2019, HarbourVest, along with JMI investments in media, communica- market and growth companies in the The PE firms that closed the highest volume of U.S. deals in 2019 focused on software, Equity, sold software developer Intelex tions, insurance, business and in- U.S., Asia and Europe. Since 1990, the technology, healthcare, financial services and consumer services to Industrial Scientific, a subsidiary of formation services, with industry corporate PE unit has invested $106 Fortive Corp. (NYSE: FTV). HarbourVest expertise in broadband, business billion in equity in 650 transactions closed 64 U.S. deals in 2019, according services,communications, cybersecu- and generated more than $85 billion By Keith Button to PitchBook. rity, healthcare information technol- in gains. Among its recent deals, Car- ogy, information services, insurance lyle sold its majority stake in Golden the U.S. and Canada, with operations 3. Genstar Capital services, Internet of Things, logistics, Goose sneakers to a company backed in 21 countries. The companies are The firm partners with management media and Software-as-a-Service. by Permira funds and a company in business and consumer services, teams and a network of strategic Since its founding in 1989, Abry has controlled by Carlyle and Stellex Capi- healthcare, software and technol- advisors completed more than 550 transac- tal Management, Titan Acquisition ogy, chemicals, energy, engineered Genstar Capital is a San Francisco tions. The firm has $12.8 billion under Holdings, acquired Huntington Ingalls’ products and materials industries. PE firm that has been investing in active management in four fund San Diego Shipyard. Carlyle closed 45 Earlier in 2020, Audax Private Equity middle-market companies since 1988. strategies. Its flagship private equity U.S. deals in 2019, the same number as acquired a controlling interest in Kofile Genstar partners with its management fund is the $2.1 billion Abry Partners IX, Abry and Shore Capital, according to Inc., a Dallas company that provides teams and a network of strategic targeting investments of $20 million PitchBook. records management systems. Audax advisors, including current and former to $200 million. The $525 million Abry closed 87 U.S. deals in 2019, according C-level executives from the industries Heritage Partners fund focuses on 4. Shore Capital Partners to PitchBook. in which it invests. The firm employs lower middle-market companies with The lower mid-market firm backs more than 35 professionals and man- investments of $20 million to $50 mil- companies in healthcare and food and 2. HarbourVest Partners ages funds with total capital commit- lion. Its $1.05 billion structured equity beverage The firm invests in buyout, growth ments of $17 billion. Genstar invests investment fund, Abry Senior Equity V, Chicago-based PE firm Shore Capi- equity and mezzanine in targeted segments of only four targets investments of $20 million to tal Partners has about $1 billion under HarbourVest Partners is global sectors: financial services, software, $75 million, and its $1.5 billion senior management. The firm invests through private markets investment firm with industrial technology and healthcare, debt securities fund, Abry Advanced two microcap focused funds: Shore more than $68 billion in assets under and focuses on global companies Securities Fund IV, focuses on first and Capital Healthcare Partners, which management as of yearend 2019, headquartered in North America. It is second lien bank debt securities raised invests in healthcare companies, and including primary fund investments, currently managing its ninth fund and to support leveraged buyouts. Abry Shore Capital Food Beverage Part- secondary investments and direct is seeking investment opportunities closed 45 U.S. deals in 2019, the same ners, which invests in food, beverage co-investments. The firm, founded in in founder-owned companies, public number as Carlyle and Shore Capital, and related companies. Shore raised 1982, has invested more than $17 bil- company orphans, corporate carve- according to PitchBook. Healthcare Partners, its third health-

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care fund, at $293 million and Food lier in 2020, KKR raised the $1.3 billion ment, the firm has invested in more Beverage Partners, its first food and KKR Global Impact Fund to make PE than 500 companies in technology, beverage fund, at $148 million, both investments in lower middle-market healthcare, consumer, financial and in 2019. The healthcare fund invests companies that provide commercial business services and other growth in platform companies with $5 million solutions to environmental and social industries. Since its start in 1984, to $100 million in annual revenue and challenges. KKR closed 42 U.S. deals in Summit Partners has completed more add-on companies with more than $1 2019, according to PitchBook. than 190 strategic sales and mergers million in annual revenue. The food and more than 140 public offerings. and beverage fund targets companies 8. Insight Partners The firm maintains offices in North with $10 million to $100 million in an- The firm invests in high-growth tech- America and Europe, and invests in nual revenue. Among its deals in 2019, nology and software companies companies around the world. In 2019, Shore Capital invested in Main Street Insight Venture Partners is a New Summit invested in $2.5 billion in Gourmet, a wholesale bakery, and it York-based global venture capital and 50 companies, made more than 70 made a platform investment by form- private equity firm with more than $20 acquisitions through its portfolio coming Southern Ear, Nose, Throat and billion under management. The firm panies and made 19 strategic sales Allergy Partners and partnering with invests in high-growth technology and and public offerings. Among its recent Northwest ENT and Allergy Center software companies. Since Insight deals, Summit has invested in Akemo, in Georgia. Shore Capital closed 45 was founded in 1995, it has invested a Software-as-a-Service provider to U.S. deals in 2019, the same number in more than 300 companies, com- brands and retailers; EClinical Solu- as Abry and Carlyle, according to pleted more than 200 M&A transactions, provider of data services to life PitchBook. tions for its portfolio companies and sciences organizations; and gamified made more than 200 strategic exits, cybersecurity trainer Immersive Labs; 7. Kohlberg Kravis Roberts with more than 40 initial public of- Summit closed 41 U.S. deals in 2019, The firm invests in management buy- ferings. The firm advises its portfolio according to PitchBook. outs and growth capital companies through its Insight Onsite KKR & Co. (NYSE: KKR) manages program, providing advice targeted 10. Harvest Partners private equity, energy, infrastructure, at product and technology, market- Harvest focuses on healthcare, indus- real estate and credit investments, ing, sales, strategy and M&A, talent, trials and manufacturing plus it has partners that manage business development and customer Harvest Partners is a middle-market hedge funds and it provides financ- success functions. Among recent deals, PE firm headquartered in New York ing and investments through a capital Insight Venture invested in Lakeside that invests through private equity and markets business. KKR was founded in Software, developer of workplace data structured capital arms. The private 1976, and through Sept. 30, 2019, the analytics software, and it invested equity business focuses on investments firm had $208.4 billion under manage- $500 million in cloud data manage- in the business services and con- ment, 109 portfolio companies with ment company Veeam Software, with sumer, healthcare, industrial services, $157 billion in annual revenues, and 21 Canada Pension Plan Investment and manufacturing and distribution private equity funds raised since in- Board investing alongside the PE firm. industries. It targets companies with ception. Those funds have completed Insight closed 41 U.S. deals in 2019, the annual revenues of $100 million to $1 PE transactions with about $615 billion same number as Summit, according to billion. Among its recent deals, Harvest of total enterprise value. KKR’s PE PitchBook. invested in Integrity Marketing Group, business invests in management buy- distributor of life and health insurance outs and build-ups, minority positions, 9. Summit Partners for seniors; bought outsourced railroad public company toe-hold investments The firm invests in technology, health- yard manager Lazer Spot Inc.; invested and growth capital opportunities. Its care, consumer and financial services in MRI Software, provider of real estate Americas PE teams focus on indus- Boston-based Summit Partners is a management software; and bought trials, financial services, retail and global alternative investment firm fo- Service Express, provider of mainte- consumer, energy, technology, media cused on growth equity, fixed income nance and hardware support for data and communications, healthcare, and and public equity opportunities. With centers. Harvest closed 38 U.S. deals in hospitality and leisure industries. Ear- more than $19 billion under manage- 2019, according to PitchBook. M&A

32 Mergers & Acquisitions March 2020

032_MAJ0320 32 2/24/2020 4:35:04 PM Guest Article ADOBE STOCK

with mostly male boards saw growth in Women on board employee productivity 1.2 percentage points below industry medians. Gender diversity on corporate boards is good for Having a more diverse workforce and performance and for shareholders board of directors leads to a greater diversity of ideas, MSCI found. But it’s not just greater diversity of ideas which By Belinda Martinez Vega leads to innovation; greater board diversity also sets the tone for a more Pushed by a groundbreaking Califor- panies and shareholders are getting inclusive workplace culture from the nia law mandating it, more companies the message that, mandated or not, top of the organization. According to are putting women on their public cor- gender diversity on corporate boards MSCI, strong talent management prac- porate boards. The law faces pressure makes good business sense. tices have long been proven to lead to in court and may not stand, but its Women on public corporate boards growth in revenue by employees. rippling effect has already started to is good for shareholders. According to Wall Street is starting to get the pic- increase the visibility and awareness a study published by MSCI in March ture. The share of female board mem- of the important benefits of board di- 2018, having three or more women on a bers in the Russell 3000 index, which versity. Investors are taking notice and company’s board of directors trans- includes most public companies on trying to get ahead of the curve. Here’s lates to a 1.2% median productivity major U.S. stock exchanges, increased where the issue stands, and why com- above competitors. In contrast, those to 20% in the second quarter of 2019

TheMiddleMarket.com March 2020 Mergers & Acquisitions 33

033_MAJ0320 33 2/24/2020 4:36:44 PM Guest article

from 19% the previous quarter, accord- male boards when the law passed have as on how they promote diversity at the ing to Equilar Inc., a governance-data added at least one woman, according board and executive level. Other states firm. When Equilar began tracking the to Athena Alliance, a nonprofit that are likely to follow. measure in late 2016, 15% of board helps women land board directorships. seats were filled by women. What can Wall Street do to This increase in diver- The law faces an uphill change the landscape? sity is partly as a result legal battle Whether SB 826 survives judicial of California pushing for On August 9, 2019, scrutiny or not, some public and action. On September Judicial Watch, a Wash- private investors are starting to take 30, 2018, former Gover- ington-based conserva- independent action towards including nor Jerry Brown signed tive activist group, filed more women on board seats. Black- a law, Senate Bill 826, a lawsuit, Crest v. Alex Rock, the world’s largest asset man- making California the Padilla, in California state ager with $6.3 trillion of assets under first state to mandate court on behalf of three management, stipulated in its Proxy female representation on California taxpayers seek- Guidelines for 2018 that it “expects to corporate boards. ing to prevent implemen- see at least two women directors on tation and enforcement of every board.” Vanguard, with more Belinda Martinez Vega What does the SB 826. They allege that than $5 billion in assets under man- California bill do? spending taxpayer money agement, did not assign a metric, but SB 826 requires public companies enforcing SB 826 is illegal under the nevertheless advocated for gender with principal executive offices in Cali- California constitution. They further al- board diversity, noting in its Open Let- fornia to meet certain gender-inclusion lege that the legislation’s quota system ter to Directors of Public Companies requirements on their boards, based for female representation on corporate Worldwide that its position on board on a tiered system. All publicly held boards employs express gender classi- diversity is “an economic imperative, corporations had to have at least one fications. As a result, they claim, SB 826 not an ideological choice.” woman director by December 31, 2019. is immediately suspect and presump- By the end of 2021 companies must tively invalid under the equal protection Investors are starting meet the following requirements: provisions of the California Constitution to take independent 1. If the number of directors is six or and triggers strict scrutiny review. action towards more, it must have a minimum of three female directors; California is not alone including more women 2. If the number of directors is five, But SB 826 is not alone. It mirrors on board seats. it must have a minimum of two female requirements that European countries directors; and have previously passed to increase Based on these high-profile ex- 3. If the of directors is four or fewer, women’s representation in business amples, even if California’s law is struck it must have a minimum of one female governance. France, Spain, Norway and down, it looks like companies are director. Iceland already require public compa- recognizing that gender diversity on The California Secretary of State will nies to have at least 40 percent female boards is a smart financial move. While publish names of compliant and non- board representation. Similar require- this trend is just beginning to gather compliant companies annually. Failure ments exist in Italy (one-third), Germany momentum and more action will be to comply with the new law by the end (30 percent), the Netherlands (30 per- needed both from Wall Street and the of 2019 (or 2021 for larger boards) will cent, nonbinding) and other countries. government, you as a company inves- lead to fines of $100,000 for each first In addition, Illinois’s governor, in tor, advisor or decision makers should violation and $300,000 per violation in late August 2019, signed a bill requiring consider getting ahead of the curve subsequent years. public companies based in the state and putting a plan in place for more As of September 2019, 68% of the 94 to report on the composition of their gender diversity on your company’s public companies in California with all- boards, by gender and ethnicity, as well corporate board. M&A

Belinda Martinez Vega, partner, Venable LLP

34 Mergers & Acquisitions March 2020

034_MAJ0320 34 2/24/2020 4:36:46 PM Key Middle-Market M&A Deals Completed in January 2020

Date Acquirer Target Target Industry Value ($mil)

01/24/20 F5 Networks Inc Shape Security Inc Prepackaged Software 1,000.0 01/24/20 Sonangol Sociedade Nacional PT Ventures SGPS SA Telecommunications 1,000.0 01/02/20 CIT Bank NA Mutual of Omaha Bank Savings and Loans, Mutual Savings Banks 988.1 01/22/20 Dubai Islamic Bank PSJC Noor Bank PJSC Commercial Banks, Bank Holding Companies 960.9 01/31/20 FCF Fishery Co Ltd Bumble Bee Foods LLC Food and Kindred Products 928.0 01/24/20 VICI Properties Inc JACK Cleveland Casino Hotels and Casinos 843.3 01/28/20 Shinhan Financial Group Ltd Orange Life Insurance Co Ltd Insurance 817.8 01/02/20 China Lodging Hldg Singapore Steigenberger Hotels AG Hotels and Casinos 803.8 01/02/20 Northern Star Resources Ltd Kalgoorlie Lake View Pty Ltd Mining 800.0 01/20/20 Yanlord Invest (Singapore) United Engineers Ltd Real Estate; Mortgage Bankers and Brokers 767.2 01/10/20 HomeStar InvestCo AB Hembla AB Real Estate; Mortgage Bankers and Brokers 737.4 01/14/20 Northland Power Inc Empresa de Energia de Boyaca Electric, Gas, and Water Distribution 735.3 01/15/20 OVO Energy Ltd SSE PLC-Hsehld Energy & Svcs Electric, Gas, and Water Distribution 616.6 01/14/20 Partners Group AG Imfarr-Property Portfolio Real Estate; Mortgage Bankers and Brokers 612.3 01/03/20 Olympus Partners LP Soliant Health Business Services 612.0 01/10/20 Savon Voima Oyj Fortum Oyj-District Heating Electric, Gas, and Water Distribution 589.4 01/30/20 Raytheon Co Forcepoint LLC Prepackaged Software 588.0 01/29/20 CNX Midstream Partners LP CNX Midstream GP LLC Oil and Gas; Petroleum Refining 577.8 01/07/20 HML Holdings PLC Leasehold Management Ltd Real Estate; Mortgage Bankers and Brokers 576.7 01/31/20 IOOF Holdings Ltd Australia & New Zealand Bkg-On Insurance 574.3 01/08/20 Assicurazioni Generali SpA Seguradoras Unidas SA Insurance 572.4 01/15/20 Investor Group Digital Realty-Data Centers Real Estate; Mortgage Bankers and Brokers 557.0 01/15/20 Mapletree Investments Pte Ltd Digital Rlty Tr Inc-Powered Real Estate; Mortgage Bankers and Brokers 557.0 01/08/20 Cresco Labs Inc CannaRoyalty Corp Investment & Commodity Firms,Dealers,Exchanges 532.3 01/02/20 ReAssure Group PLC Old Mutual Wealth Life Assur Investment & Commodity Firms,Dealers,Exchanges 516.5 01/06/20 Piper Jaffray Cos Sandler O’Neill Partners LP Investment & Commodity Firms,Dealers,Exchanges 485.0 01/16/20 Sealink Travel Group Ltd Transit Systems Pty Ltd Transportation and Shipping (except air) 472.4 01/02/20 Allianz Holdings PLC LV-General Insurance Business Insurance 460.1 01/21/20 Arcline Investment Management Fairbanks Morse LLC Wholesale Trade-Durable Goods 450.0 01/31/20 Sandoz International GmbH Aspen Japan KK Drugs 440.6 01/23/20 CVC Capital Partners DMV-Fonterra Excipients GmbH Drugs 425.9 01/02/20 Wellbore Integrity Solutions Schlumberger-Drilling Assets Prepackaged Software 400.0 01/30/20 Banco Santander(Brasil)SA Banco Ole Bonsucesso Credit Institutions 395.3 01/08/20 CITIC Ltd Dah Chong Hong Holdings Ltd Transportation Equipment 385.3 01/06/20 ADT Inc Defenders Inc Business Services 381.0 01/20/20 Steel Reef Infrastructure Corp Crescent Point Energy Corp-Cer Oil and Gas; Petroleum Refining 377.4 01/31/20 RELX PLC ID Analytics Inc Prepackaged Software 375.0 01/31/20 Towa Pharmaceutical Co Ltd Pensa Investments SL Drugs 364.5 01/03/20 Charles River Labs Intl Inc Hemacare Corp Business Services 359.9 01/01/20 Investor Group SPM Argentina SA Oil and Gas; Petroleum Refining 355.0 01/21/20 Jewel Bidco Ltd Charles Taylor PLC Business Services 344.4 01/31/20 Domo Chemicals GmbH Solvay SA-Polyamid Bus Chemicals and Allied Products 335.1 01/08/20 Banque Des Territoires JMB Solar Nogara SASU Electric, Gas, and Water Distribution 334.5 01/22/20 Grain Management LLC Summit Broadband Inc Radio and Television Broadcasting Stations 332.5 01/03/20 Kaman Corp Bal Seal Engineering Inc Wholesale Trade-Durable Goods 330.0 01/09/20 Cording Real Estate Group Ltd The Holborn Links Estate Real Estate; Mortgage Bankers and Brokers 320.9

TheMiddleMarket.com March 2020 Mergers & Acquisitions 35

035_MAJ0320 35 2/24/2020 4:33:48 PM Key Middle-Market M&A Deals Completed in January 2020

Date Acquirer Target Target Industry Value ($mil) Date Acquirer Target Target Industry Value ($mil)

01/07/20 Hostess Brands Inc Voortman Cookies Ltd Food and Kindred Products 320.2 N/A Boubyan Bank K.S.C.P. Bnk of Lndn & The Middle East Commercial Banks, Bank Holding Companies 151.2 01/13/20 Tian Jin Global Magnetic Card Tianjin Bohai Petrochem Co Oil and Gas; Petroleum Refining 308.8 01/09/20 Guardian Life Ins Co Hanover Cambridge Park Real Estate; Mortgage Bankers and Brokers 150.0 01/31/20 Jost Werke AG Alo Holding AB Machinery 306.0 01/31/20 Momentum Metro Strategic Ltd Alexander Forbes Grp Hldg-Insu Insurance 146.9 01/02/20 Allianz Holdings PLC Legal & General Insurance Ltd Insurance 305.1 N/A Flotonic Ltd AFI Development PLC Real Estate; Mortgage Bankers and Brokers 145.0 01/16/20 GeoPark Colombia SA Amerisur Resources PLC Oil and Gas; Petroleum Refining 300.6 01/13/20 TAG Beteilgungs und Imbil GmbH Vantage Development SA Real Estate; Mortgage Bankers and Brokers 144.9 01/13/20 Tsentr Khraneniia Dannykh DataLine LLC Business Services 286.8 01/11/20 Oak Coast Properties LLC The Courtyards at Buckley,CO Real Estate; Mortgage Bankers and Brokers 143.0 01/16/20 Kinross Gold Corp Third Mining Expl Co LLC Mining 283.0 01/31/20 Momentum Metro Strategic Alexander Forbes Ltd-Alexander Insurance 139.7 01/02/20 Allianz SE LV-General Insurance Business Insurance 279.8 01/27/20 Halma PLC NovaBone Products LLC Measuring, Medical, Photo Equipment; Clocks 137.0 01/02/20 Quetzal Capital Pte Ltd PACC Offshore Svcs Hldg Ltd Transportation and Shipping (except air) 277.4 01/31/20 First State Investments Ltd Vopak Terminal Algeciras SA Transportation and Shipping (except air) 136.9 01/08/20 Investor Group ARTESP-Road Concession PiPa Construction Firms 270.4 01/12/20 Junshi Educ Consulting Shuren Educ Mgmt Co Ltd Educational Services 135.3 01/09/20 Blackstone Group Inc Sheraton Grand Hotel,Phoenix Hotels and Casinos 268.0 01/02/20 Abcam PLC Expedeon-Immo & Proteomics Drugs 132.2 01/07/20 KKR & Co Inc Riata Corporate Pk Amusement and Recreation Services 258.0 01/02/20 Curtiss-Wright Corp 901D LLC Measuring, Medical, Photo Equipment; Clocks 132.0 01/23/20 Helen of Troy Ltd Drybar Holdings LLC Personal Services 255.0 01/09/20 Pavilion Energy Trading Iberdrola SA-LNG Oil and Gas; Petroleum Refining 129.1 01/02/20 Americold Realty Trust Nova Cold Logistics Transportation and Shipping (except air) 253.3 01/01/20 John Wiley & Sons Inc MThree Corporate Consult Ltd Educational Services 129.0 01/30/20 Faurecia SA SAS Autosystemtechnik Transportation Equipment 248.4 01/16/20 Investcorp Bank BSC 535-545 Boylston Street,MA Real Estate; Mortgage Bankers and Brokers 128.0 01/31/20 France Air Management SA Sig Air Handling Netherlands Wholesale Trade-Durable Goods 244.4 01/13/20 Alvogen Inc Assertio Therapeutics-Gralise Drugs 127.5 01/14/20 Clearwater U.S. Multi-Family Starlight US-Portfolio Construction Firms 239.6 01/06/20 Taehun Lee Fiber Tech Co Ltd Textile and Apparel Products 123.9 01/10/20 Jinushi Pte REIT Invest Corp Nippon Coml Dvlp Co Ltd-Ppty Real Estate; Mortgage Bankers and Brokers 239.2 01/19/20 Gold Cup Elec Apparatus Co Wuhan No.2 Elec Wire & Cable Metal and Metal Products 122.3 01/07/20 Zeus Investments Peru SRL Hermes Transportes Blindados Business Services 236.4 01/21/20 Union Invest RE GmbH Thompson Washington DC Hotel Hotels and Casinos 120.0 01/14/20 Alexandria RE Equities Inc Hines Global REIT-Riverside Real Estate; Mortgage Bankers and Brokers 235.0 01/02/20 Scandinavian Tobacco Group A/S Agio Beheer BV Tobacco Products 232.5 01/09/20 Ingka Centres Holding BV Kings Mall Shopping Centre Ltd Real Estate; Mortgage Bankers and Brokers 222.6 01/09/20 Siemens Gamesa Renewable Senvion Hldg Gmbh-Svcs & Electric, Gas, and Water Distribution 221.5 ® 01/13/20 Inphi Corp eSilicon Corp Electronic and Electrical Equipment 216.0 01/20/20 Hefei Urban Constr Dvlp Co Ltd Hefei Industrial Invest Real Estate; Mortgage Bankers and Brokers 212.4 01/01/20 First Financial Bankshares Inc TB&T Bancshares Inc Commercial Banks, Bank Holding Companies 210.1 01/23/20 Singapore Exchange Ltd Scientific Beta Pte Ltd Investment & Commodity Firms,Dealers,Exchanges 206.4 01/02/20 China Resources Sanjiu Med & Aonuo (China) Pharms Co Ltd Drugs 202.0 01/02/20 Varta AG VARTA Consumer Batteries GmbH Electronic and Electrical Equipment 201.8 01/07/20 Revolution Resources LLC Jones Energy II Inc Oil and Gas; Petroleum Refining 201.5 01/07/20 Zhenjiang Xingxin Electn Tech Jiangsu Acetec Semiconductor Business Services 198.9 01/06/20 AEA Investors LP Univar Solutions Inc- Envi Agriculture, Forestry, and Fishing 195.0 01/09/20 Housing Dvlp Fin Corp Ltd Apollo Munich Health Ins Co Insurance 193.5 01/02/20 Sonoco Products Co Thermoform Engineered Quality Rubber and Miscellaneous Plastic Products 187.0 01/06/20 Colony Capital Inc Databank Ltd Business Services 185.0 01/01/20 OceanFirst Financial Corp Two River Bancorp Commercial Banks, Bank Holding Companies 183.1 01/20/20 Hood Packaging Corp Transcontinental Inc-Paper & Rubber and Miscellaneous Plastic Products 180.0 01/31/20 PAC Carveout LLC NMP Advisors LLC Investment & Commodity Firms,Dealers,Exchanges 179.0 01/31/20 PAC Carveout LLC Preferred Apartment Advisors Investment & Commodity Firms,Dealers,Exchanges 179.0 01/15/20 Tikehau Investment Management Covivio SA-500 Lots Real Estate; Mortgage Bankers and Brokers 178.0 01/14/20 Wujiang Econ & Tech Dvlp Zone Chunghwa Picture Tubes Electronic and Electrical Equipment 177.5 01/09/20 Equinix Inc Axtel SAB de CV-Data Centers(3 Telecommunications 175.0 01/22/20 Brookfield Business Partners Teekay Offshore Partners LP Transportation and Shipping (except air) 170.2 01/15/20 HIG Capital LLC Portopiccolo Residence Srl Hotels and Casinos 166.9 01/01/20 Momq Hldg Co Momentive Performance Chemicals and Allied Products 165.6 01/27/20 K12 Inc Galvanize LLC Investment & Commodity Firms,Dealers,Exchanges 165.0 01/02/20 Konecranes Abp MHE-Demag (S) Pte Ltd Machinery 162.8 01/31/20 Amalgamated Bank,New York,NY Renew Finl Grp-PACE Assets Business Services 160.0 01/15/20 Cadence Design Systems Inc AWR Corp Prepackaged Software 160.0 01/14/20 Blackstone RE Partners LP Invesco Re Ltd-Office Bldg Real Estate; Mortgage Bankers and Brokers 155.7 01/31/20 Tailim Paper Co Ltd Tailim Packaging Co Ltd Paper and Allied Products 155.1

36 Mergers & Acquisitions March 2020 TheMiddleMarket.com

036_MAJ0320 36 2/24/2020 4:33:50 PM Key Middle-Market M&A Deals Completed in January 2020

Date Acquirer Target Target Industry Value ($mil) Date Acquirer Target Target Industry Value ($mil)

01/07/20 Hostess Brands Inc Voortman Cookies Ltd Food and Kindred Products 320.2 N/A Boubyan Bank K.S.C.P. Bnk of Lndn & The Middle East Commercial Banks, Bank Holding Companies 151.2 01/13/20 Tian Jin Global Magnetic Card Tianjin Bohai Petrochem Co Oil and Gas; Petroleum Ref ning 308.8 01/09/20 Guardian Life Ins Co Hanover Cambridge Park Real Estate; Mortgage Bankers and Brokers 150.0 01/31/20 Jost Werke AG Alo Holding AB Machinery 306.0 01/31/20 Momentum Metro Strategic Ltd Alexander Forbes Grp Hldg-Insu Insurance 146.9 01/02/20 Allianz Holdings PLC Legal & General Insurance Ltd Insurance 305.1 N/A Flotonic Ltd AFI Development PLC Real Estate; Mortgage Bankers and Brokers 145.0 01/16/20 GeoPark Colombia SA Amerisur Resources PLC Oil and Gas; Petroleum Ref ning 300.6 01/13/20 TAG Beteilgungs und Imbil GmbH Vantage Development SA Real Estate; Mortgage Bankers and Brokers 144.9 01/13/20 Tsentr Khraneniia Dannykh DataLine LLC Business Services 286.8 01/11/20 Oak Coast Properties LLC The Courtyards at Buckley,CO Real Estate; Mortgage Bankers and Brokers 143.0 01/16/20 Kinross Gold Corp Third Mining Expl Co LLC Mining 283.0 01/31/20 Momentum Metro Strategic Alexander Forbes Ltd-Alexander Insurance 139.7 01/02/20 Allianz SE LV-General Insurance Business Insurance 279.8 01/27/20 Halma PLC NovaBone Products LLC Measuring, Medical, Photo Equipment; Clocks 137.0 01/02/20 Quetzal Capital Pte Ltd PACC Offshore Svcs Hldg Ltd Transportation and Shipping (except air) 277.4 01/31/20 First State Investments Ltd Vopak Terminal Algeciras SA Transportation and Shipping (except air) 136.9 01/08/20 Investor Group ARTESP-Road Concession PiPa Construction Firms 270.4 01/12/20 Junshi Educ Consulting Shuren Educ Mgmt Co Ltd Educational Services 135.3 01/09/20 Blackstone Group Inc Sheraton Grand Hotel,Phoenix Hotels and Casinos 268.0 01/02/20 Abcam PLC Expedeon-Immo & Proteomics Drugs 132.2 01/07/20 KKR & Co Inc Riata Corporate Pk Amusement and Recreation Services 258.0 01/02/20 Curtiss-Wright Corp 901D LLC Measuring, Medical, Photo Equipment; Clocks 132.0 01/23/20 Helen of Troy Ltd Drybar Holdings LLC Personal Services 255.0 01/09/20 Pavilion Energy Trading Iberdrola SA-LNG Oil and Gas; Petroleum Ref ning 129.1 01/02/20 Americold Realty Trust Nova Cold Logistics Transportation and Shipping (except air) 253.3 01/01/20 John Wiley & Sons Inc MThree Corporate Consult Ltd Educational Services 129.0 01/30/20 Faurecia SA SAS Autosystemtechnik Transportation Equipment 248.4 01/16/20 Investcorp Bank BSC 535-545 Boylston Street,MA Real Estate; Mortgage Bankers and Brokers 128.0 01/31/20 France Air Management SA Sig Air Handling Netherlands Wholesale Trade-Durable Goods 244.4 01/13/20 Alvogen Inc Assertio Therapeutics-Gralise Drugs 127.5 01/14/20 Clearwater U.S. Multi-Family Starlight US-Portfolio Construction Firms 239.6 01/06/20 Taehun Lee Fiber Tech Co Ltd Textile and Apparel Products 123.9 01/10/20 Jinushi Pte REIT Invest Corp Nippon Coml Dvlp Co Ltd-Ppty Real Estate; Mortgage Bankers and Brokers 239.2 01/19/20 Gold Cup Elec Apparatus Co Wuhan No.2 Elec Wire & Cable Metal and Metal Products 122.3 01/07/20 Zeus Investments Peru SRL Hermes Transportes Blindados Business Services 236.4 01/21/20 Union Invest RE GmbH Thompson Washington DC Hotel Hotels and Casinos 120.0 01/14/20 Alexandria RE Equities Inc Hines Global REIT-Riverside Real Estate; Mortgage Bankers and Brokers 235.0 01/02/20 Scandinavian Tobacco Group A/S Agio Beheer BV Tobacco Products 232.5 01/09/20 Ingka Centres Holding BV Kings Mall Shopping Centre Ltd Real Estate; Mortgage Bankers and Brokers 222.6 01/09/20 Siemens Gamesa Renewable Senvion Hldg Gmbh-Svcs & Electric, Gas, and Water Distribution 221.5 ® 01/13/20 Inphi Corp eSilicon Corp Electronic and Electrical Equipment 216.0 01/20/20 Hefei Urban Constr Dvlp Co Ltd Hefei Industrial Invest Real Estate; Mortgage Bankers and Brokers 212.4 01/01/20 First Financial Bankshares Inc TB&T Bancshares Inc Commercial Banks, Bank Holding Companies 210.1 01/23/20 Singapore Exchange Ltd Scientif c Beta Pte Ltd Investment & Commodity Firms,Dealers,Exchanges 206.4 01/02/20 China Resources Sanjiu Med & Aonuo (China) Pharms Co Ltd Drugs 202.0 01/02/20 Varta AG VARTA Consumer Batteries GmbH Electronic and Electrical Equipment 201.8 01/07/20 Revolution Resources LLC Jones Energy II Inc Oil and Gas; Petroleum Ref ning 201.5 01/07/20 Zhenjiang Xingxin Electn Tech Jiangsu Acetec Semiconductor Business Services 198.9 01/06/20 AEA Investors LP Univar Solutions Inc- Envi Agriculture, Forestry, and Fishing 195.0 01/09/20 Housing Dvlp Fin Corp Ltd Apollo Munich Health Ins Co Insurance 193.5 01/02/20 Sonoco Products Co Thermoform Engineered Quality Rubber and Miscellaneous Plastic Products 187.0 01/06/20 Colony Capital Inc Databank Ltd Business Services 185.0 01/01/20 OceanFirst Financial Corp Two River Bancorp Commercial Banks, Bank Holding Companies 183.1 01/20/20 Hood Packaging Corp Transcontinental Inc-Paper & Rubber and Miscellaneous Plastic Products 180.0 01/31/20 PAC Carveout LLC NMP Advisors LLC Investment & Commodity Firms,Dealers,Exchanges 179.0 01/31/20 PAC Carveout LLC Preferred Apartment Advisors Investment & Commodity Firms,Dealers,Exchanges 179.0 01/15/20 Tikehau Investment Management Covivio SA-500 Lots Real Estate; Mortgage Bankers and Brokers 178.0 01/14/20 Wujiang Econ & Tech Dvlp Zone Chunghwa Picture Tubes Electronic and Electrical Equipment 177.5 01/09/20 Equinix Inc Axtel SAB de CV-Data Centers(3 Telecommunications 175.0 01/22/20 Brookf eld Business Partners Teekay Offshore Partners LP Transportation and Shipping (except air) 170.2 01/15/20 HIG Capital LLC Portopiccolo Residence Srl Hotels and Casinos 166.9 01/01/20 Momq Hldg Co Momentive Performance Chemicals and Allied Products 165.6 01/27/20 K12 Inc Galvanize LLC Investment & Commodity Firms,Dealers,Exchanges 165.0 01/02/20 Konecranes Abp MHE-Demag (S) Pte Ltd Machinery 162.8 01/31/20 Amalgamated Bank,New York,NY Renew Finl Grp-PACE Assets Business Services 160.0 01/15/20 Cadence Design Systems Inc AWR Corp Prepackaged Software 160.0 01/14/20 Blackstone RE Partners LP Invesco Re Ltd-Off ce Bldg Real Estate; Mortgage Bankers and Brokers 155.7 01/31/20 Tailim Paper Co Ltd Tailim Packaging Co Ltd Paper and Allied Products 155.1

TheMiddleMarket.com March 2020 Mergers & Acquisitions 37

037_MAJ0320 37 2/24/2020 4:33:51 PM Key Middle-Market M&A Deals Completed in January 2020

Date Acquirer Target Target Industry Value ($mil) Date Acquirer Target Target Industry Value ($mil)

01/02/20 ConnectOne Bancorp Inc Bancorp of New Jersey Inc Commercial Banks, Bank Holding Companies 118.5 01/02/20 Prologis Inc Ravenside Retail Park,Edmont Real Estate; Mortgage Bankers and Brokers 68.1 01/29/20 Sony Life Insurance Co Ltd SA Reinsurance Ltd Insurance 116.1 01/02/20 Level One Bancorp Inc Ann Arbor State Bank Commercial Banks, Bank Holding Companies 67.8 01/02/20 Avon Rubber PLC 3M Co-Ballistic Protection Textile and Apparel Products 116.0 01/01/20 Genesco Inc Togast Llc Wholesale Trade-Nondurable Goods 67.7 01/19/20 Wenshi (Shenzhen) Eq Invest Henan Xinda Animal Husbandry Agriculture, Forestry, and Fishing 115.2 01/31/20 Pandox AB Maritim Hotel GmbH-Nuernberg Hotels and Casinos 67.3 01/29/20 Gisla Sp z o o Develia SA-Wola Center Real Estate; Mortgage Bankers and Brokers 111.7 01/27/20 Harbor Group International LLC Luxe Scottsdale Apartments Real Estate; Mortgage Bankers and Brokers 65.5 01/23/20 BNP Paribas REIM SGR SpA Buildings Portfolio, Milan Real Estate; Mortgage Bankers and Brokers 110.9 01/27/20 Jrk Property Holdings Inc RLJ Lodging Tr-Marriott Hotels Hotels and Casinos 65.0 01/17/20 Tokyo Tr Capital Co Ltd Savanna Invest Mgmt LLC-434 Real Estate; Mortgage Bankers and Brokers 103.5 01/23/20 POP NPLs 2019 SRL NPL Portfolio. Italy Credit Institutions 64.4 01/17/20 HJ Capital (Intl) Hldg Co Ltd Concord Bright Hldg Ltd Investment & Commodity Firms,Dealers,Exchanges 103.5 01/30/20 Solucoes em Software Consinco SA Prepackaged Software 62.1 01/13/20 Perial Assets Management SASU Fortress Invest Grp Llc-Adam Real Estate; Mortgage Bankers and Brokers 103.4 01/09/20 Vingroup JSC Saidong Urban Dvlp & Invest Real Estate; Mortgage Bankers and Brokers 62.1 01/17/20 Nihon Restaurant Holdings Coco’s Japan Co Ltd Retail Trade-Eating and Drinking Places 102.7 01/08/20 TA Associates Management LP Netrisk.Hu Elso Online Business Services 61.9 01/01/20 OceanFirst Financial Corp Country Bank Holding Co Inc Commercial Banks, Bank Holding Companies 102.2 01/24/20 Consolidated-Tomoka Land Co Crossroads Towne Ctr Real Estate; Mortgage Bankers and Brokers 61.8 01/07/20 Dehua TB Invest Mgmt Co Ltd Qingdao Yufeng Hantang Wood Wood Products, Furniture, and Fixtures 102.2 01/21/20 Iguatemi Empresa de Shopping Praia de Belas Shopping Center Real Estate; Mortgage Bankers and Brokers 61.0 01/08/20 Assicurazioni Generali SpA Advancecare Gestao de Servicos Insurance 101.0 01/02/20 AirBoss of America Corp-Defens Critical Solutions Transportation Equipment 60.0 01/03/20 Carolina Financial Corp Carolina Trust BancShares Inc Commercial Banks, Bank Holding Companies 100.3 01/11/20 ACNB Corp Frederick County Bancorp Inc Commercial Banks, Bank Holding Companies 57.6 01/27/20 Columbia Property Trust Inc Normandy Real Estate Partners Investment & Commodity Firms,Dealers,Exchanges 100.0 01/21/20 Golfzon Newdin Holdings CO LTD Namyang Leisure Co Ltd Amusement and Recreation Services 56.1 01/14/20 Gulf Capital PJSC Ivi Rma Global Sl-Middle E Health Services 99.9 01/09/20 Americold Realty Trust Newport-St. Paul Cold Storage Transportation and Shipping (except air) 56.0 01/27/20 Divitias Bidco Ltd Nasstar PLC Business Services 98.1 01/21/20 Aberdeen Standard European Logistics Asset Transportation and Shipping (except air) 55.5 01/20/20 CNT Israel Hldg Ltd 6 Over 6 Vision Ltd Business Services 97.4 01/31/20 ESG Eko Agro Group AG ESG Technology Investments AG Investment & Commodity Firms,Dealers,Exchanges 54.7 01/13/20 San Tai Investment Co Ltd Hillview Golf Dvlp Co Ltd Amusement and Recreation Services 96.7 01/29/20 Sony Life Insurance Co Ltd Aegon Sony Life Insurance Co Insurance 54.6 01/15/20 Hillview Hldg Ltd Hillview Golf Dvlp Co Ltd Amusement and Recreation Services 96.3 01/22/20 Pingtan Xinzhi Asts Mgmt Co Gu’an Huiyuan Supply Chain Business Services 54.3 01/06/20 Sim Lian - Metro Capital Pte Rockworth (Australia) Pty Ltd Investment & Commodity Firms,Dealers,Exchanges 96.1 01/06/20 Bright World Investment Ltd Alpha Youth Ltd Stone, Clay, Glass, and Concrete Products 52.9 01/07/20 ELF 3 Barings LLC-Distn Ctr Transportation and Shipping (except air) 93.8 01/28/20 Db Fin No.6 Special Purpose Neon Tech Co Ltd Machinery 52.2 01/08/20 Savills IM Barings LLC-Prime Grade A Transportation and Shipping (except air) 93.4 01/24/20 Twin River Worldwide Holdings Affinity - Casinos(3) Amusement and Recreation Services 51.0 01/16/20 Swiss Prime Site AG Re Ppty (04) Real Estate; Mortgage Bankers and Brokers 93.4 01/06/20 Covivio Hotels SCA Hilton Hotels (Ireland) Ltd Hotels and Casinos 50.8 01/21/20 Multiplan Empreendimentos Atletico Mineiro-Diamond Mall Real Estate; Mortgage Bankers and Brokers 93.2 01/01/20 Momentive Performance Wuxi Momentive Performance Paper and Allied Products 50.7 01/10/20 Brother S Africa Proprietary LANXESS CISA Proprietary Ltd Chemicals and Allied Products 93.0 01/17/20 Sprott Inc Tocqueville Asset Mgmt LP-Tocq Investment & Commodity Firms,Dealers,Exchanges 50.0 01/21/20 S Lew & Assoc Inc The Conam Grp-401 Unit Real Estate; Mortgage Bankers and Brokers 90.0 01/20/20 Primus Valor AG Ibh Funds Investment & Commodity Firms,Dealers,Exchanges 49.9 01/01/20 Getinge AB Applikon Biotechnology BV Business Services 89.1 01/31/20 Northwest Pipe Co Geneva Pipe Inc Stone, Clay, Glass, and Concrete Products 49.4 01/29/20 Rfr Holding GmbH Avignon Capital Ltd-Ampere Real Estate; Mortgage Bankers and Brokers 88.2 01/30/20 Cerved Credit Management Group Quaestio Cerved Credit Mgmt Investment & Commodity Firms,Dealers,Exchanges 47.6 01/16/20 Jiangsu Leike Defense Tech Co Xi’an Hengda Microwave Tech Electronic and Electrical Equipment 87.1 01/30/20 Linx Pay Meios De Pagamento Esmeralda Servicos Digitais Business Services 47.3 01/04/20 Shenzhen Harmony Invest Funds Shenzhen Tongxin Small Reloan Credit Institutions 85.3 01/16/20 Hindustan Foods Ltd Avalon Cosmetics Pvt - CMB Soaps, Cosmetics, and Personal-Care Products 47.1 01/09/20 CIE Automotive SA Somaschini SPA Transportation Equipment 84.9 01/21/20 Kanglim Co Ltd NAMYEUNG VIVIEN CORP Textile and Apparel Products 46.2 01/03/20 Lassonde Industries Inc Sun-Rype Products Ltd Food and Kindred Products 84.5 01/22/20 Truking Asset Mgmt (Changsha) Romaco Pharmatechnik GmbH Machinery 45.5 01/29/20 Orange Capital Partners BV Belgrave II Collection Investment & Commodity Firms,Dealers,Exchanges 82.7 01/15/20 AI Global Invests (C) Pcc Ltd DFM Foods Ltd Food and Kindred Products 43.4 01/29/20 The Peterson Cos Regency Centers-Gainesville Real Estate; Mortgage Bankers and Brokers 82.6 01/30/20 Custodia Valore SpA Creval SpA-InPegno Credit Institutions 42.6 01/02/20 Clark Equipment Co Schiller Grounds Care-Mower Machinery 81.7 01/09/20 Proteon Therapeutics Inc Artara Therapeutics Inc Business Services 42.5 01/14/20 Retelit Digital Services SpA Partners Associates SpA Business Services 81.4 01/30/20 Jones Lang LaSalle Income Milford Crossing Real Estate; Mortgage Bankers and Brokers 42.0 01/14/20 Barings LLC Kennedy Wilson-Retail Real Estate; Mortgage Bankers and Brokers 81.0 01/15/20 Killam Apartment REIT Christie Point Apartments,BC Real Estate; Mortgage Bankers and Brokers 41.3 01/23/20 Manulife Invest Mgmt EQ8 Multifamily Buildings,QC Real Estate; Mortgage Bankers and Brokers 79.9 01/03/20 Guilin Wuzhou Tourism Co Ltd Guilin Coml Co Ltd Wholesale Trade-Durable Goods 41.1 01/06/20 DVP Hotel Development LP Toronto Don Valley Hotel Hotels and Casinos 77.9 01/22/20 Henan Tian Lun Gas Group Ltd Shenqiu Huixin Natural Gas Co Electric, Gas, and Water Distribution 40.6 01/21/20 3i Eurpn Opl Prjcts Fnd Sociedad Concesionaria Autovia Construction Firms 77.5 01/10/20 Community First Bancshares Inc Abb Financial Group Inc Commercial Banks, Bank Holding Companies 40.3 01/09/20 ANI Pharmaceuticals Inc Amerigen Pharms Ltd-Coml And Drugs 77.5 01/09/20 Vinci Energies Portugal SA Novabase Digital SA Business Services 40.2 01/03/20 XP Malls Fundo de Investimento IRB Intl FII Insurance 76.5 01/15/20 Hokkaido Airports Co Ltd Hakodate Airport Terminal Bldg Business Services 40.1 01/30/20 Employee Stock Ownership Plan Iec Corp Electric, Gas, and Water Distribution 75.0 01/02/20 Enghouse Systems Ltd Dialogic Group Inc Telecommunications 40.0 01/10/20 Entegris Inc Sinmat Inc Electronic and Electrical Equipment 75.0 01/09/20 Regal Petroleum PLC NVK UkrNaftInvest PrAT Aerospace and Aircraft 40.0 01/09/20 Tryggingamidstodin hf Lykill Fjarmognun hf Credit Institutions 74.1 01/17/20 CCL Industries Inc ID&C World Holdco Ltd Business Services 40.0 01/06/20 XP Ppty Fundo de Investimento Noctus Empreendimentos Real Estate; Mortgage Bankers and Brokers 74.0 01/07/20 Farmers National Banc Corp Maple Leaf Financial Inc Commercial Banks, Bank Holding Companies 39.6 01/17/20 Fossa Holdco Ltd Agregtd Mcro Pwr Hldg PLC Electric, Gas, and Water Distribution 73.7 01/22/20 Mirae Asset Daewoo SPAC 2 Aniplus Inc Radio and Television Broadcasting Stations 39.6 01/14/20 Perion Network Ltd Content IQ Prepackaged Software 73.1 01/31/20 BWREFI Royal Palm Way LLC Palm Beach Park Centre,FL Real Estate; Mortgage Bankers and Brokers 38.5 01/04/20 Guangxi Xinze Huanfeng Invest Guangxi Huanjiang Yuanfeng Food and Kindred Products 71.3 01/02/20 Reliant Bancorp Inc Tennessee Cmnty Bk Hldg Inc Commercial Banks, Bank Holding Companies 38.0 01/07/20 Avic Airborne Systems Co Ltd Shaanxi Baocheng Aviation Measuring, Medical, Photo Equipment; Clocks 68.4 01/14/20 WP Carey Inc Moorfield Logistics Partner-Di Transportation and Shipping (except air) 37.7

38 Mergers & Acquisitions March 2020 TheMiddleMarket.com

038_MAJ0320 38 2/24/2020 4:33:52 PM Key Middle-Market M&A Deals Completed in January 2020

Date Acquirer Target Target Industry Value ($mil) Date Acquirer Target Target Industry Value ($mil)

TheMiddleMarket.com March 2020 Mergers & Acquisitions 39

039_MAJ0320 39 2/24/2020 4:33:53 PM Key Middle-Market M&A Deals Completed in January 2020

Date Acquirer Target Target Industry Value ($mil)

01/03/20 Amazon.com Inc Net Insight AB-Sye Business Business Services 37.4 01/06/20 Sirius Real Estate Ltd Otto Immobilien GmbH-Neuruppin Real Estate; Mortgage Bankers and Brokers 37.3 01/06/20 Clal Insurance Entrp Hldg Ltd Haarbaa Towers 4 Floors Real Estate; Mortgage Bankers and Brokers 37.1 01/10/20 NeoGenomics Inc Human Longevity Inc-Oncology Drugs 37.0 01/13/20 Corporate Travel Management Corporate Travel Planners Inc Transportation and Shipping (except air) 36.0 01/16/20 Progress Realty Partners Marketfair Shopping Center,NC Real Estate; Mortgage Bankers and Brokers 36.0 01/02/20 US Solar Fund PLC Greenbacker Renewable-39 MWDC Electric, Gas, and Water Distribution 36.0 01/31/20 Montana Ave Capital Partners Castilian Technical Center Real Estate; Mortgage Bankers and Brokers 35.7 01/14/20 If Skadeforsakring Holding AB Viking Redningstjeneste TopCo Investment & Commodity Firms,Dealers,Exchanges 35.5 01/17/20 Shanghai Jielong Group Co Ltd Shanghai Jielong Pudong Color Printing, Publishing, and Allied Services 35.2 01/24/20 Anika Therapeutics Inc Parcus Medical LLC Rubber and Miscellaneous Plastic Products 35.0 01/03/20 Yap Kian Peng Jackspeed Corp Ltd Leather and Leather Products 34.9 01/30/20 Plymouth Industrial REIT Inc Five-Bldg Industrial Real Estate; Mortgage Bankers and Brokers 34.7 01/12/20 Junshi Educ Consulting Ganzhou Meizhi Educ Investment & Commodity Firms,Dealers,Exchanges 34.4 01/30/20 Employee Stock Ownership Plan Turelk Inc Construction Firms 34.0 01/06/20 Hao Zhi Intl (Hong Kong) Ltd Infranor Holding SA Measuring, Medical, Photo Equipment; Clocks 33.5 01/01/20 Momq Hldg Co Momentive Performance Mining 33.3 01/22/20 Dws Investment GmbH Sebel Canberra Hotel Hotels and Casinos 32.9 01/13/20 RBB Bancorp PGB Holdings Inc Commercial Banks, Bank Holding Companies 32.5 01/29/20 ARA US Hospitality Trust AC Hotel Raleigh, North Caroli Real Estate; Mortgage Bankers and Brokers 32.2 01/24/20 Ocean Bidco Ltd AdCityMedia AB Advertising Services 32.0 01/02/20 Employee Stock Ownership Plan Andesa Services Inc Business Services 31.5 01/13/20 MPG Funds Management Ltd Bunnings Centre Transportation and Shipping (except air) 30.0 01/03/20 Adapthealth Corp Mckesson Patient Care Retail Trade-Food Stores 30.0 01/14/20 Arcplus Group PLC Shanghai Jingyu Landscape Agriculture, Forestry, and Fishing 29.6 01/17/20 Osung Advanced Materials Co Lumi Tech Endabu Co Ltd Electronic and Electrical Equipment 29.0 01/08/20 Westinghouse Air Brake Tech RELCO Locomotives Inc Transportation and Shipping (except air) 29.0 01/01/20 Siebert Financial Corp StockCross Financial Services Investment & Commodity Firms,Dealers,Exchanges 28.5 01/02/20 Summit Financial Group Inc,WV Cornerstone Financial Services Commercial Banks, Bank Holding Companies 28.5 01/13/20 Shanghai AEG Entrp Dvlp Co Ltd Shanghai ABB Switch Co Ltd Electronic and Electrical Equipment 28.4 01/06/20 China Merchants Ind Invest Ltd AVIC Intl Maritime Hldg Ltd Transportation Equipment 28.1 01/10/20 Fleury SA Diagmax Participacoes Health Services 26.9 01/06/20 Avesoro Jersey Ltd Avesoro Resources Inc Mining 26.8 01/15/20 M&G Investment Management Ltd Prologis-Logistic Asset Transportation and Shipping (except air) 26.7 01/07/20 Employee Stock Ownership Plan JCS Family Co Inc Electronic and Electrical Equipment 26.0 01/14/20 Interpump Group SpA Transtecno Srl Transportation Equipment 25.9 01/06/20 Imdex Ltd Flexidrill Ltd Machinery 25.4 01/03/20 Daekyo Co Ltd Tn Hldg Co Ltd Business Services 25.1 01/07/20 Crocker Partners LLC 5600 Glenridge Real Estate; Mortgage Bankers and Brokers 25.0 01/09/20 Weyland Tech Inc Push Hldg Inc Business Services 25.0 01/21/20 ITS Participations SASU ITS Group SA Business Services 24.8 01/08/20 Securitas AB Techco Security Espana SLU Business Services 24.5 01/02/20 Zhuhai Hengqin Xuanyuan No. 8 Shenzhen Belter Health Measuring, Medical, Photo Equipment; Clocks 24.2 01/22/20 Brno Technology Park Brno As Real Estate; Mortgage Bankers and Brokers 23.6 01/08/20 SMC Fulham Ltd CLS Holdings PLC-Quayside Lodg Hotels and Casinos 23.6 01/02/20 Shenzhen Keli Invest Hldg Co Shenzhen Keli Motor Co Ltd Electronic and Electrical Equipment 23.4 01/29/20 Comtech Telecommun Corp CGC Technology Ltd Wholesale Trade-Durable Goods 23.2 Editor’s note: To measure activity in the middle market, Mergers & Acquisitions looks at transactions that fulfill several requirements: Deals must have a value of roughly $1 billion or less; they must be completed (not just announced) within the timeframe designated; the coverage is global. Excluded from our charts are: recapitalizations; self-tenders; exchange offers; repurchases; stake purchases; and transactions with undisclosed buyers or sellers. Our data provider is Refinitiv, which updates its databases continuously. We use the data available at press time. Data for this table was collected on February 13, 2020. Source: Refinitiv

40 Mergers & Acquisitions March 2020

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