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With banks in retreat, PE fi rms are pursuing a new opportunity: SPEND IT OR

extending credit to support competitors’ LENDmiddle-market deals IT

OCTOBER 2019

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0C2_MAJ1019 2 9/9/2019 9:30:49 AM Contents October 2019 | VOL. 54 | NO. 9

Cover Story 20 LEVERAGE With banks in retreat, PE firms are pursuing a new opportunity: extending credit to support competitors’ middle- market deals. Private Equity Perspective 16 Complete control We spoke with Blackstone co-founder Stephen A. Schwarzman about why he SPEND IT likes the PE model. The Buyside OR 18 Expanding e-commerce Logistics and distribution centers are racing to keep up with demand, LEND IT enticing buyer interest. Features 26 Lenders and struggling restaurants Banks are reporting issues tied to the bankruptcies of casual dining chains. 28 Betting on sports Both Worldpay and First Data bring gambling processing businesses and experience to their new owners.

Watercooler Guest Article Q&A 6 30 32 Lending together Why PE firms are (hidden) investors Fostering flexibility Crescent expands BDC services with Private equity firms forge new ideas, Prokanga helps financial services Alcentra purchase. products and methods to change com- professionals find roles that offer more 10 panies for the better, writes Chicago balance between work and life. Better for you Pacific Founders’ Matthew Doyle. Hershey buys again. This time the company picks up One Brands to broaden healthy snack offerings. People Moves Data 12 34 35 Thoma Bravo fills tech gap New hires and promotions Completed deals OGsys addresses accounting needs Michael Bernstein gets hired by Arse- H&R Block’s purchase of Wave among in the oil and gas sector, as operators nal. Bruce Larson joins Carlyle. Scott the deals that recently closed. look to tech to make improvements. Schebelsky gets promoted at Lovell Minnick. John Sheputis gets hired by Shaq Backs GI Partners. BlackRock invests in Shaquille O’Neal- backed Authentic Brands Group.

TheMiddleMarket.com October 2019 Mergers & Acquisitions 1

001_MAJ1019 1 9/9/2019 6:54:09 PM Inside Word October 2019 | VOL. 54 | NO. 9

TheMiddleMarket.com 1 STATE STREET PLAZA, 27TH FLOOR NEW YORK, NY 10004-1505 • (212) 803-8200 EDITOR-IN-CHIEF Follow the money Mary Kathleen Flynn MANAGING EDITOR Demitri Diakantonis CONTRIBUTING EDITORS Facing increased pressure to grow, private equity Keith Button, Danielle Fugazy GROUP EDITORIAL DIRECTOR, firms turn to lending BANKING AND CAPITAL MARKETS Richard Melville

EXECUTIVE DIRECTOR, CONTENT OPERATIONS It’s no wonder private equity firms are getting into AND CREATIVE SERVICES Michael Chu the loan business. “Leveraged loans, by and large, SR. ART DIRECTOR Nick Perkins are cheap and a very good place to invest capital,” said David Miller, global head of credit at Credit VICE PRESIDENT, CAPITAL MARKETS Harry Nikpour (212) 803-8638 Suisse (NYSE: CS), at a recent conference. With inter- SENIOR MARKETING MANAGER est rates likely to continue declining, the appeal of Jamie Billington middle-market lending may increase. CHIEF EXECUTIVE OFFICER ������������������������ Gemma Postlethwaite PE firms including the Blackstone Group (NYSE: CHIEF FINANCIAL OFFICER ���������������������������������������������Sean Kron BX), KKR, the Carlyle Group (Nasdaq: CG), and CHIEF STRATEGY OFFICER ������������������������������������������� Jeff Mancini

Apollo (NYSE: APO) have all grown their credit business substantially over CHIEF REVENUE OFFICER �������������������������������������������Dave Colford

the past couple of years. For example, in 2018, KKR closed on $2.2 billion for CHIEF CONTENT OFFICER ������������������������������������������� David Evans

its KKR Private Credit Opportunities II fund, more than twice its predecessor SVP, CONFERENCES & EVENTS ������������������������������John DelMauro

fund, KKR Mezzanine Partners I, which was raised in 2015. In 2019, Silver Lake VP, PEOPLE & CULTURE ����������������������������������������������������Lee Gavin raised $2.5 billion for its first ever credit and structured equity fund. Many middle market firms have also expanded or launched credit strategies. Firms LICENSING AND REUSE OF CONTENT: such as Thoma Bravo, Adams Street, the Sterling Group, the Riverside Co., Contact our official partner, Wright’s Media, about available usages, license and reprint fees, and award seal artwork H.I.G., BC Partners, Silver Lake, Gryphon Investments and Francisco Partners at [email protected] or (877) 652-5295 for more information. Please note that Wright’s Media is the only authorized company that we’ve partnered with for have launched credit arms. SourceMedia materials. “A lot of firms have added credit as part of their expansion,” said Jeffrey Stevenson, a managing partner with VSS, one of several firms featured in our CUSTOMER SERVICE [email protected] or (212) 803-8500 cover story. “The banks left a big void, and the LP market is eager for yield.

Private equity is pretty good at going where the money is.” Mergers & Acquisitions Vol. 54/No. 9 (ISSN 0026-0010) is “The private credit market is still in its ascendancy,” said Bill Sacher, a part- published monthly with combined issues in July/August and November/December by SourceMedia, One State ner and the head of private credit at Adams Street. “There is a supply and Street Plaza, 27th Floor, New York, NY 10004-1505. Yearly subscription is $1,995; $2035 for one year in all other demand imbalance that was created when the banks exited the market. That countries. Periodical postage paid at New York, NY and U.S. additional mailing offices. POSTMASTER: Send address void has yet to be filled,” says Sacher. “And even though the private market changes to Mergers & Acquisitions / SourceMedia, One State Street Plaza, New York, NY 10004. For subscriptions, has become more crowded, the supply-demand imbalance remains largely renewals, address changes and delivery service issues contact our Customer Service department at (212) 803- intact. The total pool of dry powder in private credit funds today is about 8500 or email: [email protected]. This publication is $100 billion. That is up two- or three-fold from 10 years ago, but there is still designed to provide accurate and authoritative information regarding the subject matter covered. It is sold with about $800 billion in visible forward demand with upcoming mid-market loan the understanding that the publisher is not engaged in rendering financial, legal, accounting, tax, or other maturities and private equity dry powder.” M&A professional service. Mergers & Acquisitions is a registered trademark used herein under license. © 2019 Mergers & – Mary Kathleen Flynn Acquisitions and SourceMedia, Inc. All rights reserved.

2 Mergers & Acquisitions October 2019

002_MAJ1019 2 9/9/2019 4:17:51 PM 003_MAJ1019 3 9/9/2019 9:30:51 AM What’s going on @TheMiddleMarket.com

www.themiddlemarket.com

Special reports Voices Data

5 hiring trends in private equity The mid market needs big data H&R Block purchases Wave What does a PE firm look for in a By embracing big data, companies can M&A is poised to remain robust for the potential employee these days? Just improve their business models and tap remainder of 2019, predict deal observ- about every PE firm you talk to seems into its benefits to assist in M&A. Orga- ers. Among the mid-market deals that intent on becoming attractive to nizations must also address the risks, recently closed: H&R Block Inc.s pur- diverse candidates — whether it’s by writes Bank of America Merill Lynch’s chase of Wave Financial and Arsenal hiring a chief diversity officer or adding Robert Arth. Capital’s backing of Seal for Life. portfolio support.

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Cheesecake Factory expands menu

North Italia purchase gives Cheesecake more growth opportunities

The Cheesecake Factory Inc. (Nasdaq: CAKE) is buying Fox Restaurant Concepts and the remaining stake it does not already own in Italian restaurant chain North Italia for up to $353 million. Cheesecake is paying $130 million for the stake in North Italia, which it originally invested in 2016, increasing its total investment in North Italia to $174 million. North Italia operates 20 locations.

Exponent Women and Owens Group hosts BLOOMBERG NEWS Mark Attanasio DEALMAKERS: Lending together WOMEN AT FAMILY OFFICES Event Sponsor: A PANEL DISCUSSION Crescent broadens investment portfolio with Alcentra acquisition Join Exponent Women and Owens Group for THURSDAY, By Demitri Diakantonis and Mary Kathleen Flynn an intimate panel discussion with the women NOV. 21, 2019 dealmakers of family offi ces about their 6:30pm-8:30pm Crescent Capital BDC is buying After the deal closes, Crescent expects position and, through the combination investment perspectives. middle-market lender Alcentra Capital to become a public company and will with Crescent BDC, will create a larger LX Gallery Corp. (Nasdaq: ABDC) for $142 million. apply to list on the Nasdaq under the business development company with 36 East 60th “We look to invest in niche compa- “CCAP” symbol. a highly complementary portfolio that For more information register at: Street, NYC nies with defensible market strategies Crescent says buying Alcentra will offers immediate additional value for and experienced management teams expand the firm’s business develop- our stockholders,” says Alcentra CEO WWW.EXPONENTWOMEN.COM that can survive market cycles,” says ment company and private credit Suhail Shaikh. The deal completes a Crescent co-founder Mark Attanasio. services. For Alcentra, the deal was strategic review process for Alcentra, “We have the right people and the part of the company’s strategic review in which the target entertained buyout Visonary Sponsor Motivator Sponsor In-Kind Sponsors Media Sponsor right investment processes in place process, and will grow the firm into offers. to promote long-term growth for our the upper middle market, beyond its Advisors on the deal were: BofA Mer- clients, and we look forward to broad- traditional range of businesses with rill Lynch, Kirkland & Ellis and Proskauer ening our investment portfolio with $15 million to $75 million in Ebitda. Rose, Houlihan Lokey (NYSE: HLI), Sul- the acquisition of Alcentra Capital.” “We are now in a much stronger livan & Worcester LLP and Dechert LLP.

6 Mergers & Acquisitions October 2019 TheMiddleMarket.com

006_MAJ1019 6 9/6/2019 9:24:48 AM Watercooler Watercooler

“With the power of The Cheesecake Factory brand, Cheesecake Factory infrastructure and growth potential, complemented by an expands menu additional growth vehicle in the North Italia concept and an incubation engine to develop concepts of the future, we be- North Italia purchase gives Cheesecake lieve we will be even better positioned to provide our guests more growth opportunities with exceptional dining experiences,” says Cheesecake Fac- tory CEO David Overton. Fox owns 45 restaurants under the Flower Child, Culinary The Cheesecake Factory Inc. (Nasdaq: CAKE) is buying Dropout, Blanco and The Henry brands. “The Cheesecake Fox Restaurant Concepts and the remaining stake it does Factory is the right partner to embrace our creative spirit, not already own in Italian restaurant chain North Italia for enabling us to innovate concepts, while providing the in- up to $353 million. Cheesecake is paying $130 million for frastructure and capital to scale,” says Fox Restaurant CEO the stake in North Italia, which it originally invested in 2016, Sam Fox, who is expected to continue to lead Fox Restau- increasing its total investment in North Italia to $174 million. rant after the deal closes. Latham & Watkins is advising North Italia operates 20 locations. Cheesecake.

Exponent Women and Owens Group hosts BLOOMBERG NEWS DEALMAKERS: Lending together WOMEN AT FAMILY OFFICES Event Sponsor: A PANEL DISCUSSION Crescent broadens investment portfolio with Alcentra acquisition Join Exponent Women and Owens Group for THURSDAY, an intimate panel discussion with the women NOV. 21, 2019 dealmakers of family offi ces about their 6:30pm-8:30pm position and, through the combination investment perspectives. with Crescent BDC, will create a larger LX Gallery business development company with 36 East 60th a highly complementary portfolio that For more information register at: Street, NYC offers immediate additional value for our stockholders,” says Alcentra CEO WWW.EXPONENTWOMEN.COM Suhail Shaikh. The deal completes a strategic review process for Alcentra, in which the target entertained buyout Visonary Sponsor Motivator Sponsor In-Kind Sponsors Media Sponsor offers. Advisors on the deal were: BofA Mer- rill Lynch, Kirkland & Ellis and Proskauer Rose, Houlihan Lokey (NYSE: HLI), Sul- livan & Worcester LLP and Dechert LLP.

TheMiddleMarket.com October 2019 Mergers & Acquisitions 7

007_MAJ1019 7 9/6/2019 9:24:50 AM Watercooler

Disrupting real estate

Lovell Minnick invests in transformative tech

Lovell Minnick Partners is buying a majority stake in Inside Real Estate. The targets offers software services to over 200,000 real estate agents and helps them manage home sale processes and commission payments.

CORINDUS SHOPPE THE VITAMIN “As we’ve seen in other areas of financial services, new technologies Tech advances therapy Franchise expert are transforming the way in which existing business processes are Corindus is a pioneer in using robots Vitamin Shoppe purchase feeds new managed in real estate,” Lovell for skin and vascular procedures approach for Liberty Tax Minnick partner John Cochran tells Mergers & Acquisitions. Siemens Healthineers AG is buying Corindus Vascular Liberty Tax Inc. is buying nutritional products retailer Vi- “Today’s real estate technology Robotics for $1.1 billion. Corindus says its medical devices tamin Shoppe Inc. (NYSE: VSI) for $208 million. The deal is environment is very fragmented, a are the first to win U.S. Food and Drug Administration ap- part of Liberty Tax’s strategy to diversify its business lines by dynamic we typically see lead to ad- proval for using robots in skin and vascular procedures. “The acquiring companies that have the potential to be fran- ditional industry consolidation as busi- combination of Siemens Healthineers’ advanced, high- chised. nesses grow and evolve,” adds Lovell quality imaging, digital and artificial intelligence tools with The company, which owns Liberty Tax Services, recently Minnick partner Jason Barg. Demand Corindus’ precision robotics platform has the potential to completed a deal for Buddy’s Home Furnishings, which sells for real estate software is rising, as transform the way healthcare is delivered to those suffering and leases consumer electronics, appliances and furniture. firms rely on more on technology to from cardiovascular or peripheral disease,” says Corindus As a result of its new focus, Liberty Tax is changing its name assist them in managing their deals CEO Mark Toland. to Franchise Group Inc. Liberty Tax has received an equity and properties. Advances in robotics are making it possible to complete commitment from Vintage Capital Management. Vitamin Earlier in 2019, Lovell Minnick bought more complex tasks at higher speeds and with improved Shoppe operates around 750 stores under the Vitamin Attom Data Solutions from Renovo control and outcomes for a wide range of activities, includ- Shoppe and Super Supplements brands. Capital and Rosewood Private Invest- ing medical procedures. The developments are driving M&A “Following a careful and disciplined assessment, the ments. Attom is a provider of real in healthcare and other industries. board of directors has concluded that the acquisition estate and and analytics that offers “The acquisition of Corindus, combined with Siemens’ proposal from Liberty Tax maximizes value for our share- tax, deed and mortgage information, strong advanced therapies portfolio will help further ad- holders,” says Vitamin Shoppe CEO Sharon Leite. “We are along with neighborhood demograph- vance the growth of vascular robotics,” says Michel Therin, committed to transforming into an agile, customer-first ics. In 2017, Luminate Capital Partners president, advanced therapies at Siemens Healthineers. organization that differentiates our brand through best-in- invested in AMTdirect, which provides “The integration of our technologies could lead to reduced class quality, innovation and expertise across our products contract management services for real variability, improved efficiency, expanded access to care, and services.” estate professionals. and ultimately improved patient outcomes.” Siemens Advisors to Vitamin Shoppe include: Bank of America Lovell Minnick is a business and fi- Healthineers generated $14.9 billion in revenue in 2018. Merrill Lynch and Kirkland & Ellis. The advisor to Liberty Tax nancial services-focused private equity Advisors to Corindus are: Citigroup Global Markets Inc. is Troutman Sanders. Willkie Farr & Gallagher LLP is firm that has raised $3.2 billion since it and Cadwalader, Wickersham & Taft LLP. representing Vintage Capital Management. was founded in 1999.

8 Mergers & Acquisitions October 2019 TheMiddleMarket.com

008_MAJ1019 8 9/6/2019 9:24:59 AM Watercooler

Disrupting real estate

Lovell Minnick invests in transformative tech

Lovell Minnick Partners is buying a ® majority stake in Inside Real Estate. The targets offers software services to over 200,000 real estate agents and helps ORWARD them manage home sale processes and FTHE FUTURE LEADERS OF ACG NEW YORK commission payments.

THE VITAMIN SHOPPE THE VITAMIN “As we’ve seen in other areas of financial services, new technologies Franchise expert are transforming the way in which existing business processes are Vitamin Shoppe purchase feeds new managed in real estate,” Lovell approach for Liberty Tax Minnick partner John Cochran tells Mergers & Acquisitions. Liberty Tax Inc. is buying nutritional products retailer Vi- “Today’s real estate technology tamin Shoppe Inc. (NYSE: VSI) for $208 million. The deal is environment is very fragmented, a part of Liberty Tax’s strategy to diversify its business lines by dynamic we typically see lead to ad- OCTOBER 30, 2019 | 6 PM - 8 PM acquiring companies that have the potential to be fran- ditional industry consolidation as busi- chised. nesses grow and evolve,” adds Lovell BIERHAUS The company, which owns Liberty Tax Services, recently Minnick partner Jason Barg. Demand The next generation of industry movers are completed a deal for Buddy’s Home Furnishings, which sells for real estate software is rising, as and leases consumer electronics, appliances and furniture. firms rely on more on technology to invited to join ACG NY Forward for a night of As a result of its new focus, Liberty Tax is changing its name assist them in managing their deals networking and cocktails. to Franchise Group Inc. Liberty Tax has received an equity and properties. commitment from Vintage Capital Management. Vitamin Earlier in 2019, Lovell Minnick bought Shoppe operates around 750 stores under the Vitamin Attom Data Solutions from Renovo Shoppe and Super Supplements brands. Capital and Rosewood Private Invest- “Following a careful and disciplined assessment, the ments. Attom is a provider of real board of directors has concluded that the acquisition estate and and analytics that offers proposal from Liberty Tax maximizes value for our share- tax, deed and mortgage information, holders,” says Vitamin Shoppe CEO Sharon Leite. “We are along with neighborhood demograph- committed to transforming into an agile, customer-first ics. In 2017, Luminate Capital Partners organization that differentiates our brand through best-in- invested in AMTdirect, which provides class quality, innovation and expertise across our products contract management services for real and services.” estate professionals. Advisors to Vitamin Shoppe include: Bank of America Lovell Minnick is a business and fi- Merrill Lynch and Kirkland & Ellis. The advisor to Liberty Tax nancial services-focused private equity is Troutman Sanders. Willkie Farr & Gallagher LLP is firm that has raised $3.2 billion since it representing Vintage Capital Management. was founded in 1999.

TheMiddleMarket.com October 2019 Mergers & Acquisitions 9

009_MAJ1019 9 9/6/2019 9:25:04 AM Watercooler BLOOMBERG NEWS BLOOMBERG NEWS Consumer insights Better for you

Celect helps Nike continue digital foray Hershey buys again

Nike Inc. (NYSE: NKE) has acquired predictive analytics and The Hershey Co. (NYSE: HSY) is acquiring nutrition bar demand sensing firm Celect. The deal is part of Nike’s con- maker One Brands for $397 million. “Our beloved confection sumer direct strategy that is aimed at improving its personal brands will continue to be the engine that drives our busi- customer service. ness while we broaden our better-for-you portfolio, offering Celect, founded in 2013, offers cloud-based analytics more snacking choices for more consumers,” says Hershey that help retailers manage their inventory based on local chief growth officer Mary Beth West. demand predictions. “As demand for our product grows, we One Brands will complement Hershey’s Oatmega busi- must be insight-driven, data optimized and hyper-focused ness, which was acquired as part of the 2018 acquisition on consumer behavior,” says Nike chief operating officer of Amplify Snack Brands Inc., and its recent investment Eric Sprunk. “This is how we serve consumers more person- in FulFil Holdings Ltd. “Our consumer proposition, brand ally at scale.” equity and team provide us with confidence, especially In 2018, Nike acquired two innovative companies in order when combined with an industry leader like Hershey,” adds to help speed up the athletic apparel maker’s digital strat- One Brands CEO Peter Burns. One Brands offers a portfolio egy. Nike bought Zodiac Inc., a consumer data analytics of nutrition bars that contain 20 grams of protein and one firm based in New York and Philadelphia. Nike also bought gram of sugar per bar. The bars are certified gluten-free and Invertex Ltd., a Tel Aviv, Israel-based pioneer in the use of 3D come in flavors such as pumpkin pie, cinnamon roll, choco- scanning technology to customize shoes. late chip cookie dough and white chocolate truffle. Consumers are more demanding and specific with the One Brands, formerly known as Oh Yeah! Nutrition, was products they buy. Retailers of all kinds are under pressure founded in 1999 by Ron McAfee. The company is currently to get a better grasp of shopper behavior, so they can tailor backed by Cavu Venture Partners. their marketing strategies and inventories to meet evolving “We’re proud of the brand we built and look forward to consumer needs. In order to do this, companies are invest- continuing to build on our momentum with the strength and ing in technology, including data and analytics providers, capabilities that Hershey can provide,” adds McAfee. snatching targets in those fields through M&A.

10 Mergers & Acquisitions October 2019

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011_MAJ1019 11 9/9/2019 9:30:53 AM Watercooler ADOBE STOCK BLOOMBERG NEWS Thoma Bravo fills tech gap Shaq backs

OGsys addresses accounting needs in BlackRock invests in Shaquille O’Neal- the oil and gas sector backed Authentic Brands Group

Thoma Bravo-backed Quorum Software has acquired OG- BlackRock Inc.’s long term private capital group has sys, a provider of cloud-based oil and gas accounting soft- invested $875 million in Authentic Brands Group. BlackRock ware for small and medium-sized businesses. OGsys helps will become ABG’s largest investor and joins the existing oil and gas operators, interest owners, mineral companies investment consortium of: Leonard Green & Partners, Gen- and private equity firms manage their accounting needs in eral Atlantic, Lion Capital, Simon Property Group, Brookfield the oil and gas sector. Properties’ retail group and Shaquille O’Neal (pictured). “Small and medium-sized oil and gas businesses are ABG is a brand development, marketing and entertain- laser-focused on production, so they need a complete view ment company with a portfolio of 50 brands that has about into operations,” says OGsys co-founder Chuck Blanton. $10 billion in annual revenue. ABG’s brand portfolio includes: The company says its software “addresses a technology Marilyn Monroe, Elvis Presley, Muhammad Ali, Shaquille gap.” The customer base consists of more 600 oil and gas O’Neal, Greg Norman, Thalia Sodi, Neil Lane, Nautica, companies. Quorum offers software to about 80 percent of Aéropostale, Vince Camuto, Nine West, Juicy Couture, Frye, the largest oil and gas producers in the U.S. Spyder, Prince and Judith Lieber. ABG recently acquired the Software developers are appealing to investors, par- Sports Illustrated media franchise. ticularly in the energy sector, as companies are relying on “BlackRock’s scale, global footprint and digital capabili- technology to improve operations. ties will enable us to build out our organization and continue Earlier in 2019, Quorum announced plans to buy Coastal our domestic and international growth trajectory,” says ABG Flow Measurement Inc., a provider of gas and liquids mea- CEO Jamie Salter. “This investment marks an important and surement, analytical services and software resources to the exciting next phase of expansion for ABG.” energy industry, and Genstar Capital-backed Drillinginfo “We believe there is substantial growth still ahead for bought Cortex. The latter is a software provider to the ABG,” adds BlackRock managing director Colm Lanigan. energy sector. Kirkland & Ellis advised Quorum and Holland, BlackRock manages more than $6.84 trillion, including Johns & Penny LLP advised OGsys. over $170 billion across alternative asset classes. Bank of America Merrill Lynch advised BlackRock.

12 Mergers & Acquisitions October 2019

012_MAJ1019 12 9/6/2019 9:25:25 AM 013_MAJ1019 13 9/9/2019 9:30:56 AM Watercooler ADOBE STOCK BLOOMBERG NEWS Enhancing customer service More healthy snack deals

Cisco, Pros aim to improve client Atkins owner adds Quest Nutrition to services with acquisitions expand distribution

Companies are becoming more efficient, and businesses Atkins owner Simply Good Foods Co. (Nasdaq: SMPL) is are relying on technology to improve their operations. Data buying healthy foods maker Quest Nutrition for about $1 management, data virtualization and artificial intelligence billion. Quest makes bars, cookies, chips and pizza with high are among the software developments appealing to strate- amounts of protein and low amounts of sugar. gic buyers. “The acquisition of Quest strengthens Simply Good Foods’ Cisco (Nasdaq: CSCO) is buying customer experience position within the nutritional snacking category by expand- management company Cloudcherry. The target uses predic- ing our portfolio of brands and product offerings while also tive analytics to help contact center agents improve service providing us with greater consumer and channel diversifica- by offering cross-selling and discounts to meet customer tion,” says Simply Good CEO Joseph Scalzo. “This combina- needs and increase loyalty. tion delivers on our strategy to become a broader nutritional Cloudcherry’s software uses data from records and trans- snacking company that offers consumers a broad range of actions to help contact center agents “close the feedback brands and products that satisfy their nutritional needs.” In loop.” Vasili Triant, vice president and general manager of addition to Atkins, Simply Good also sells products under the Cisco contact center solutions says: “This is the next step in Atkins Endulge and SimplyProtein brands. realizing our vision for cognitive collaboration in the contact Food conglomerates are diversifying their product lines center, enabling the delivery of the best, most personalized to appeal to consumers who are opting for healthier snacks. customer experiences, ultimately improving customer loyalty Earlier in 2019, PepsiCo Inc. (Nasdaq: PEP) bought the Muscle and lifetime value.” Milk brand from Skippy peanut butter maker Hormel Foods In another example of the trend, Pros (NYSE: PRO) bought Corp. (NYSE: HRL). In 2018, Hershey Co. (NYSE: HSY) pur- Travelaer SAS, a digital services provider that helps travelers chased Pirate Brands from B&G Foods Inc. (NYSE: BGS). with online booking and travel-related needs. Pros says the Advisors to Simply Good include: Centerview Partners, acquisition will help its airline clients be more flexible. Goldman Sachs (NYSE: GS) and Kirkland & Ellis. Advisors to “Our combined teams will drive even greater innovation, Quest are: J.P. Morgan Securities (NYSE: JPM) and Winston accelerating the digital transformation our airline customers & Strawn. M&A need today,” says Pros CEO Andres Reiner.

14 Mergers & Acquisitions October 2019

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015_MAJ1019 15 9/9/2019 9:30:57 AM Private Equity Perspective

a public company. If you pay people Complete control more money, you can get a more qualified person. And you take away The co-founder of Blackstone outlines the advantages of the time dimension for performance the private equity model and invest to achieve an outcome, whether it takes three years, five years, By Mary Kathleen Flynn seven years to transform the business. And you can leverage it higher than a public company. And you have a different type of board of directors for each company. They tend to be very experienced in that industry and have greater engagement and a specific knowledge base than a typical public company board.

What’s your forecast for the economy? The economy, locally in the U.S., is slowing, manufacturing in particular. The consumer economy in the U.S. is still growing very well, and there’s full employment. Typically, you don’t have a recession with full employment and wages going up faster than inflation. If people who are employed are making more money, they’ll typically spend more money. The question is: Will any- thing break that confidence? There’s some uncertainty, for example in trade Stephen A. Schwarzman issues, but if they get resolved, that will take the pressure off. I don’t see The Blackstone Group Inc. transi- stock in it. You also have time before any type of imminent recession. tioned from a publicly-traded partner- you buy the business to appropriately ship into a corporation in July. We study it so you can come up with a How might a recession affect spoke with Stephen A. Schwarzman, plan to accelerate its growth and grow private equity? the firm’s co-founder, chairman and it aggressively and productively. And Private equity made it through the CEO, on the occasion of his new book, you do that without the accountability financial crises of last 40 years without What It Takes: Lessons in the Pursuit of that comes with quarterly earnings and imperiling limited partner capital. But Excellence (Avid Reader Press/Simon & the visibility of a public stock. You set a nothing is recession proof. A recession Schuster). strategic plan of how you want to take will affect the growth rate and overall this asset, this business, and turn it into returns, but it will affect markets as Why do you like the private equity something much better than the day well. Historically, private equity has model? you buy it. outperformed public markets. It’s really You have complete control of a The model allows for greater just a question of: By how much? In a company, rather than buying liquid compensation for managers than in recession, it’s less. M&A

16 Mergers & Acquisitions October 2019

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$447.5 MILLION $250 MILLION $361 MILLION $2.585 BILLION Senior secured PIK Reverse takeover of Investment into Covetrus, Senior secured revolving credit facility with toggle notes and Series Lineage Grow Company Inc., a combination of a Bank of America as A convertible preferred (CSE: BUDD) for California spinout of Henry Schein, administrative agent to Axar Capital for cannabis company FLRish, Inc. Inc. (NASDAQ: HSIC) and (dba Harborside) for NYSE-listed NYSE-listed cemetery Vets First Choice for leader

$55 MILLION $37 MILLION $750 MILLION $150 MILLION Syndicated secured Acquisition of Trident Syndicated financing Syndicated financing to a acquisition financing to a University International, with JPMorgan Chase major insurance brokerage seven-member borrower a regionally accredited Bank as administrative for this subsidiary of group for university, by an affiliate agent for Wintrust Financial of NASDAQ-listed

$200 MILLION £39 MILLION $80 MILLION Acquisition of Sale to Red Industries, Structured renewable Asset acquisition and Singapore-listed creating one of largest energy investment strategic partnership with global electronics UK independent in Vietnam for this vaccine leader for manufacturer PCI Ltd. hazardous waste leading Asia-Pacific Paragon Gene Therapy independent renewable for private equity firm companies for unit of NYSE-listed energy company

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017_MAJ1019 17 9/9/2019 9:30:58 AM The Buyside

with above-average popula- tion growth, a propensity Expanding e-commerce toward e-commerce buying and selling, lower overall Logistics and distribution centers are racing to keep up with vacancy rates and higher demand, enticing buyer interest overall rent growth,” says Nicole Stagnaro, head of By Demitri Diakantonis opportunistic and platform transactions at Stockbridge. In 2018, logistics and transportation services Online retailers, base, including many of the largest and most provider Ryder System Inc. including Amazon, respected e-commerce, social media and (NYSE: R) acquired fulfill- are adding more logistics providers, and big-box enterprises.” ment company MXD Group fulfillment centers More local fulfillment centers means faster for about $120 million. Ryder to meet consumer delivery times and lower last-mile costs to made the deal to keep up demands for faster both retailers and customers. Last-mile is the with rising online sales. shipping times. The last leg of the delivery process where products The MXD purchase owners of these reach their final destinations. included 109 fulfillment properties along “Plateau is a transformational acquisi- facilities and a network of 72 with the contractors tion in that it not only complements our core third-party facilities. that build them are becoming prime M&A heavy civil construction and commercial Dealmakers point out targets. concrete businesses, but also gives Sterling that e-commerce real estate Sterling Construction Co. (Nasdaq: STRL) access to new geographies and rapidly properties are worth taking is buying Plateau Excavation Inc. for $400 growing end markets,” Cutillo adds. a looking at. “It is no secret million. Plateau serves customers in the Existing logistics sites are attracting buyer that e-commerce continues e-commerce and warehousing sectors with attention too. Stockbridge Capital Group to enhance the attractive- infrastructure and excavating contracting has acquired 26 e-commerce and logistics ness of high-quality and services. properties from Westcore Properties. well-located warehouse Plateau’s recent and current construction “We’re excited about this portfolio be- and distribution properties,’’ projects include: an Amazon.com Inc. (Nas- cause the properties are located in markets notes Stagnaro. M&A daq: AMZN) fulfillment center in Alabama, a Walmart Inc. (NYSE: WMT) distribution center in Florida and a UPS (NYSE: UPS) warehouse at the Charlie Brown airport in Atlanta. “The rapid growth in e-commerce, cloud computing and the continuing rise of internet activities makes Plateau, a com- pany that specializes in data center and warehouse construction, a very attractive addition to Sterling’s portfolio of businesses,” says Sterling CEO Joe Cutillo. “This type of construction commands higher margins than our heavy highway space and enables us to

grow alongside an impressive end-customer BLOOMBERG NEWS

18 Mergers & Acquisitions October 2019

018_MAJ1019 18 9/6/2019 11:32:35 AM Join your fellow leaders at BankAI 2019 October 7-8, 2019 Chicago, IL

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TheMiddleMarket.com

020_MAJ1019 20 9/9/2019 6:52:33 PM With banks in retreat, PE firms are pursuing a new opportunity: extending credit to support competitors’ middle-market deals

By Danielle Fugazy

The private equity model has held up very well over the decades, continuing to outperform the public markets, even as economic cycles come and go. But the rate of growth has slowed, leading PE firms to seek adjacent areas of busi- ness to expand. As PE firms face increased pressure to produce higher returns on their investments, many of them are turning to a familiar area of business: lending. Middle-market loans offer a potential growth path for PE firms, many of whom view credit as a natural extension of their bread-and-butter operations. Moving into middle-market loans also takes advantage of the expertise firms have developed as investors in nurturing businesses. And, as interest rates continue to fall, demand for loans is expected to rise.

TheMiddleMarket.com October 2019 Mergers & Acquisitions 21

021_MAJ1019 21 9/9/2019 6:52:34 PM Cover Story

make for private equity firms. General partners use a lot of the same skillsets to buy a company as they do to suss out solid credit deals. Additionally, many industry professionals argue there is a greater need for more lend- ers as a result of traditional banks shuttering their lending arms after the financial crisis. From large to small, over the past three years a slew of private equity firms have dipped their toes into the leveraged lending business.

In good company PE firms including the Blackstone Group (NYSE: BX), KKR, the Carlyle Group (Nasdaq: CG), and Apollo (NYSE: APO) have all grown their credit business substantially over the past couple of years. For example, in Jeffrey Stevenson 2018, KKR closed on $2.2 billion for its Bill Sacher KKR Private Credit Opportunities II Returns delivered by the private That is up about 80 percent over the fund, more than twice its predecessor because that would overexpose them. equity industry are declining, although past eight years. fund, KKR Mezzanine Partners I, which Here’s a detailed look at the the asset class still outperforms the “A lot of firms have added credit was raised in 2015. In 2019, Silver Lake strategies of four PE firms making the public stock markets. Projections put as part of their expansion. The banks raised $2.5 billion for its first ever move into credit. buyout returns at 8.8 percent over the left a big void, and the LP market is credit and structured equity fund. next 10 years, down from the actual eager for yield. Private equity is pretty Many middle market firms have Filling the gaps left by banks return of 10.6 percent over the past good at going where the money is,” also expanded or launched credit One of the largest private equity decade, according to a recent report says Jeffrey Stevenson, a managing strategies. Firms such as Thoma Bra- fund-of-funds managers in the world, published by pension consultant partner with VSS, a private equity vo, Adams Street, the Sterling Group, Adams Street Partners hired Bill Cliffwater. investment firm. “While there is fund the Riverside Co., H.I.G., BC Partners, Sacher and Shahab Rashid in 2016 Private credit returns are expected formation around private debt, not all Silver Lake, Gryphon Investments and to build a private credit platform and to do better, with Cliffwater projecting strategies are the same and, in fact, Francisco Partners have all launched open a New York office. The firm said returns as high as 9.5 percent, which they are all a little different.” credit arms. there was a good opportunity to explains why so many private equity Traditional middle-market lenders generate attractive returns while pro- firms are flocking to the leveraged “The banks left a big are feeling the competition. Mergers viding capital to their general partner loan market. & Acquisitions reached out to several sponsors, who had seen banks pull “Leveraged loans, by and large, are void, and the LP market lenders for this story who agreed to back from middle-market lending. cheap and a very good place to invest is eager for yield. speak only on background. The lend- The firm set out to offer everything capital,” said David Miller, global head Private equity is pretty ers acknowledged that there is more from first-lien loans and unitranche of credit at Credit Suisse (NYSE: CS), competition for deals these days, but, facilities to second-lien loans, at a recent conference. good at going where they said, business remains strong. mezzanine debt and preferred The leveraged lending market has the money is.” They also pointed out that, while equity. grown to more than $2 trillion in the many PE firms may have their own In May 2019, the firm completed United States, according to credit The move to offer credit products lending capabilities, they aren’t nec- fundraising for its inaugural private rating agency Moody’s (NYSE: MCO). is viewed as a relatively easy one to essarily lending on their own deals, credit program with approximately

22 Mergers & Acquisitions October 2019 TheMiddleMarket.com

022_MAJ1019 22 9/6/2019 9:38:02 AM make for private equity firms. General have the connection to private equity partners use a lot of the same skillsets firms that we have. It’s one of the to buy a company as they do to suss reasons a private credit strategy was out solid credit deals. Additionally, such a natural fit for the firm.” many industry professionals argue In December 2018, before Adams there is a greater need for more lend- Street had closed its fund, the firm ers as a result of traditional banks provided a senior-secured term loan shuttering their lending arms after the and a revolving credit facility to financial crisis. From large to small, Permira for its acquisition of JayHawk over the past three years a slew of Fine Chemicals, a custom manufac- private equity firms have dipped their turer of specialty chemicals. Adams toes into the leveraged lending Street and Permira had a relation- business. ship prior to Adams Street opening a credit facility. In good company Adams Street Partners provides PE firms including the Blackstone financing solutions to sponsor-backed Group (NYSE: BX), KKR, the Carlyle middle- market companies across Group (Nasdaq: CG), and Apollo the capital structure. The team, which (NYSE: APO) have all grown their consists of 10 investment profes- credit business substantially over the sionals, has deployed close to $700 past couple of years. For example, in million of commitments in 27 invest- 2018, KKR closed on $2.2 billion for its Bill Sacher ments since the launch of the strat- KKR Private Credit Opportunities II egy. The majority of the firm’s deals fund, more than twice its predecessor because that would overexpose them. $1.1 billion of capital. The firm gar- are new leveraged buyouts with about fund, KKR Mezzanine Partners I, which Here’s a detailed look at the nered investment from new and 30 percent coming from M&A-related was raised in 2015. In 2019, Silver Lake strategies of four PE firms making the existing investors in the U.S., Europe add-ons and refinancings. raised $2.5 billion for its first ever move into credit. and Asia. “The private credit market is still in credit and structured equity fund. its ascendancy. There is a supply and Many middle market firms have Filling the gaps left by banks “There are few debt demand imbalance that was created also expanded or launched credit One of the largest private equity providers that have the when the banks exited the market. strategies. Firms such as Thoma Bra- fund-of-funds managers in the world, That void has yet to be filled,” says vo, Adams Street, the Sterling Group, Adams Street Partners hired Bill connection to private Sacher. “And even though the private the Riverside Co., H.I.G., BC Partners, Sacher and Shahab Rashid in 2016 equity firms that we market has become more crowded, Silver Lake, Gryphon Investments and to build a private credit platform and have. A private credit the supply-demand imbalance re- Francisco Partners have all launched open a New York office. The firm said mains largely intact. The total pool credit arms. there was a good opportunity to strategy was a natural of dry powder in private credit funds Traditional middle-market lenders generate attractive returns while pro- fit for our firm.” today is about $100 billion. That is up are feeling the competition. Mergers viding capital to their general partner two- or three-fold from 10 years ago, & Acquisitions reached out to several sponsors, who had seen banks pull “Our long-term private equity but there is still about $800 billion in lenders for this story who agreed to back from middle-market lending. GP relationships give us an important visible forward demand with upcom- speak only on background. The lend- The firm set out to offer everything edge in a competitive market,” says ing mid-market loan maturities and ers acknowledged that there is more from first-lien loans and unitranche Sacher, partner and head of private private equity dry powder.” competition for deals these days, but, facilities to second-lien loans, credit at Adams Street. The firm they said, business remains strong. mezzanine debt and preferred sources its deals primarily from its Super flexible They also pointed out that, while equity. general partners. “The vast majority of In the lower middle market where many PE firms may have their own In May 2019, the firm completed our deals come from sponsors in our Balance Point Capital plays, access lending capabilities, they aren’t nec- fundraising for its inaugural private private equity fund-of-funds portfolio. to credit and equity isn’t always an essarily lending on their own deals, credit program with approximately There are few debt providers that easy feat, so early on in the firm’s life,

TheMiddleMarket.com October 2019 Mergers & Acquisitions 23

023_MAJ1019 23 9/6/2019 9:38:05 AM ing years. “The private credit market today appears strikingly similar to where private equity was approxi- mately 20 years ago,” said Kewsong Lee, Carlyle co-CEO, in a recent inter- view with Korean Investors. “We have considerable white space to launch new products and expand investment mandates.” In the past five years, the Washing- ton, D.C.-based firm has formed a di- rect lending fund to finance sponsor- backed middle-market companies, a distressed and special situations fund to invest debt in distressed situations, an energy credit fund and a struc- tured loan fund. Most recently, in July 2019, Carlyle raised $2.4 billion for Carlyle

BLOOMBERG NEWS. Credit Opportunities Fund, which will pursue deals with upper-middle Carlyle’s headquarters in Washington, D.C. market borrowers, including deals that Alex Popov are not private equity sponsored, but the Westport, Connecticut-based firm both debt and equity in Cora, a sponsored by family or entrepreneur- preferred and common equity. The fund decided that being able to provide modern women’s wellness brand owned companies and seeking an will benefit from proprietary investment flexible capital was the right move. founded in 2016 and headquartered alternative to traditional capital mar- opportunities originating from Carlyle’s The firm has the ability to provide in San Francisco.. Separately, in June, kets. Although the fund just closed, it traditional buyout business. credit and equity in a single transac- Balance Boint invested debt and has already committed approximately “Our LPs want this risk/return expo- tion, or come in as the lender, or just preferred equity capital in support of $850 million to 10 businesses. sure,” says Alex Popov, a managing di- invest equity. Growth Catalyst Partners’ investment rector and head of Carlyle Credit Op- “We can be super flexible. We in Trendline Interactive. Founded in “The ability to portunities Fund “The private equity found the companies in the lower 2010 and headquartered in Austin, industry has grown tremendously, and middle market often don’t have Texas, Trendline is an email marketing customize capital private debt is next. The larger firms access to both sides of the balance agency. options for companies have the resources and competitive sheet and we felt like being able to “Overall, the market has become in our market is a advantage to offer investors credit offer both equity and debt was a more competitive and a plethora of competitive advantage, opportunities.” competitive advantage,” says direct lending funds have been raised and a benefit to the While this is Carlyle’s first Credit Justin Kaplan, a partner at Balance over the last two years, but one of our Opportunities Fund, the firm has Point Capital, which recently closed differentiators is that direct lenders entrepreneus who been building up its global credit on Balance Point Capital Partners III can’t speak to both credit and equity appreciate flexibility.” capabilities for quite some time. with $380 million. “Having the ability like we can,” says Kaplan. “We have created a global platform to customize capital options for com- A 15-person team based in to find good investments and utilize the panies in our market is a competitive Credit opportunities New York and London advises the firm’s global resources to conduct thor- advantage and at the same time, Expanding its credit business is a Carlyle credit fund and invests across ough diligence and structure bespoke is a benefit to the entrepreneurs top priority for Carlyle. The firm’s co- the capital structure through secured investments. We are really customizing in our market who appreciate the CEO expects the private debt market loans, senior subordinated debt, mez- our offering,” says Popov. flexibility.” to grow at a faster pace than the zanine debt, convertible notes and The move into credit has made Balance Point recently invested private equity market in the com- other debt-like instruments, as well as sense for Carlyle. “The Carlyle team

24 Mergers & Acquisitions October 2019 TheMiddleMarket.com

024_MAJ1019 24 9/6/2019 9:38:08 AM ing years. “The private credit market Single source today appears strikingly similar to Originally a private equity firm, VSS where private equity was approxi- today offers mezzanine, subordinated mately 20 years ago,” said Kewsong debt, preferred equity and common Lee, Carlyle co-CEO, in a recent inter- equity, and has become more of a view with Korean Investors. “We have credit provider than an equity pro- considerable white space to launch vider. VSS focuses on investing in in- new products and expand investment formation services, businesses services, mandates.” healthcare and education. In the past five years, the Washing- Founded in 1987, the firm decided to ton, D.C.-based firm has formed a di- delve into credit in the mid-2000s and rect lending fund to finance sponsor- launched its first structured capital backed middle-market companies, a fund, called VSS SCI. Today, the firm distressed and special situations fund is investing out of its fourth private to invest debt in distressed situations, equity fund and its third structured an energy credit fund and a struc- capital fund. tured loan fund. Managing partner Jeffrey Ste- Most recently, in July 2019, venson says the firm’s approach is a Carlyle raised $2.4 billion for Carlyle flexible capital strategy that includes Credit Opportunities Fund, which will both equity and debt and that pursue deals with upper-middle typically provides more equity than a market borrowers, including deals that Alex Popov private debt fund. “We typically put are not private equity sponsored, but in 25 percent equity,” says Stevenson. sponsored by family or entrepreneur- preferred and common equity. The fund has tremendous knowledge and a “Being able to be a single source of owned companies and seeking an will benefit from proprietary investment strong deal sourcing capability that capital to the lower middle market alternative to traditional capital mar- opportunities originating from Carlyle’s allows the team to see a broad spec- is important. It’s not efficient in that kets. Although the fund just closed, it traditional buyout business. trum of investments,” says Popov. market to separate the providers of has already committed approximately “Our LPs want this risk/return expo- Credit Opportunities Fund, which debt and equity, and it allows us to $850 million to 10 businesses. sure,” says Alex Popov, a managing di- is Carlyle’s newest fund, will allow the be more of a partner to our portfolio rector and head of Carlyle Credit Op- firm to work with businesses that are companies. We participate on their “The ability to portunities Fund “The private equity looking for capital but don’t want to boards and help our companies with industry has grown tremendously, and sell a majority stake or necessarily strategy and growth.” customize capital private debt is next. The larger firms work with private equity owners. The firm invests in lower-middle options for companies have the resources and competitive market companies that have an en- in our market is a advantage to offer investors credit “It’s a way to capitalize terprise value of less than $150 million, opportunities.” which the firm sees as an under-fund- competitive advantage, on deal flow and apply and a benefit to the While this is Carlyle’s first Credit ed area as more firms move up mar- Opportunities Fund, the firm has the same skills. It’s what ket. “Because we are investing equity, entrepreneus who been building up its global credit institutional investors in addition to debt, we are thinking appreciate flexibility.” capabilities for quite some time. of total returns and the growth that “We have created a global platform are looking for today.” would come from making good equity A 15-person team based in to find good investments and utilize the returns,” says Stevenson. “It’s a way New York and London advises the firm’s global resources to conduct thor- “There is a large universe that falls to capitalize on deal flow and apply Carlyle credit fund and invests across ough diligence and structure bespoke into this category. We were missing the same skills. It’s what institutional the capital structure through secured investments. We are really customizing some of these opportunities because investors are looking for today,” he loans, senior subordinated debt, mez- our offering,” says Popov. at times we didn’t have optimal says. M&A zanine debt, convertible notes and The move into credit has made capital to serve the needs of such other debt-like instruments, as well as sense for Carlyle. “The Carlyle team companies,” says Popov.

TheMiddleMarket.com October 2019 Mergers & Acquisitions 25

025_MAJ1019 25 9/6/2019 9:38:09 AM in several cities and states. The Stephens team said other banks have exposure to Perkins & Marie Callender’s, including Regions Financial in Birmingham, Ala. Regions has cautioned multiple times about the restaurant sector. The fast-casual restaurant subsector is the only indus- try creating “significant concerns,” said John Turner, Regions’ president and CEO, said during the last earnings call. The restaurant industry “has been responsible for a fair amount of the ADOBE STOCK one-off problems we’ve seen this year,” said Terry McEvoy, an analyst at Ste- Lenders suffer when phens. “So there’s an emerging trend.” The $4.2 billion-asset Equity disclosed that a bakery and a pizza restaurants struggle business filed for bankruptcy pro- tection, prompting $14.5 million in Banks are reporting issues tied to the bankruptcies of loan-loss provisions. While the bakery casual dining chains was sold and its loan moved off of Equity’s books, the pizzeria is still in By Jim Dobbs bankruptcy. First Financial said in April that its Restaurants, a typical bellwether of Paul Murphy acknowledged during his first-quarter income was dinged by broader economic issues, are giving company’s quarterly earnings call. a $10 million charge-off tied to $16.8 some banks fits. Eateries are heavily While Cadence did not identify million relationship with a quick-serve dependent on consumer spending, the restaurant, Stephens Inc. analysts restaurant franchise. The $14.4 billion- affordable labor and manageable suggested in a note to clients that the asset company said in a regula- costs for raw goods. borrower could be Perkins & Marie tory filing that it determined that the Several banks have reported issues Callender’s, which filed for bankruptcy financial condition of several of the tied to restaurant bankruptcies in protection on Aug 5. restaurant company’s locations had 2019, including Cadence Bancorp. in The Memphis, Tenn., restaurant “substantially deteriorated.” Houston, First Financial Bancorp in company is part of a growing list of “I think when you’re doing enter- Cincinnati and Equity Bancshares in casual dining chains struggling in prise-value lending, which is really Wichita, Kansas. a crowded and highly competitive what we do in the franchise business, At the $17.5 billion-asset Cadence, industry. Kona Grill, Papa Gino’s, Taco when we start to see signs of stress, exposure to an $8.5 million shared Bueno Restaurants and Ruby’s Diner we’ve got to [act] on it immediately,” national credit led to a $1.6 million have also sought bankruptcy protec- Archie Brown, First Financial’s presi- charge-off and a $1 million increase tion in recent months. dent and CEO, said during the com- in the loan-loss reserve in the sec- Restaurants have historically ben- pany’s first-quarter earnings call. ond quarter after a restaurant client efited from locations near shopping “If we start to see stress on consum- filed for bankruptcy protection. More malls and big-box retailers, which ers and they spend less as a result, charge-offs could be needed, Ca- are now suffering from declining foot restaurants will feel it even more, and dence warned. traffic as online sites thrive. Some res- that could be an early warning sign of The loan, along with a trio of com- taurants also are grappling with rising bigger problems to come,” said Scott mercial credits, contributed to a “bad labor costs, the result of low unem- Brown, chief economist at Raymond quarter,” Cadence Chairman and CEO ployment and higher minimum wages James. M&A

26 Mergers & Acquisitions October 2019

026_MAJ1019 26 9/6/2019 9:35:12 AM “American Banker has been a daily must read for me throughout my entire career in the banking industry.” Bill Isaac Former Chairman FDIC and Fifth Third Bancorporation & Senior Managing Director FTI Consulting

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027_MAJ1019 27 9/9/2019 6:44:49 PM M&A ads.indd 2 9/9/19 5:46 PM ing payments for more than two decades, joining the former Vantiv in 1992 and focusing on casino, iGam- ing, lottery and social gaming, among other products. A series of acquisitions has brought the former Vantiv to FIS, culminating in FIS’ $43 billion deal to acquire Worldpay. Sports betting is an industry banks have traditionally shied away from, but as more states legalize the activ- ity, technology companies will look to grab bank clients that are interested in expanding their revenues from gaming payments. Ten states have legalized sports betting, and more than a dozen others ADOBE STOCK have legalization bills progressing through state legislatures. Like with cryptocurrency and legal cannabis, Betting on sports not all of these bills are the same, complicating compliance. Both Worldpay and First Data bring gambling processing businesses and experience to their new owners

By John Adams

More U.S. states are legalizing for sports gambling, and can do issu- palm of our hands via mobile gam- sports gambling, providing a huge ing and the services off of the same ing experiences,” said George Con- opportunity for payments companies platform, the value is tremendous,” nors, who oversees gaming solutions that have been fattened by multibil- said Joe Pappano, the senior vice at First Data, now part of Fiserv. “As lion-dollar mergers. president of gaming at Worldpay, now the gaming industry embraces new Sports betting is a prime revenue part of FIS. technologies to meet the demands of source, given its volume in the U.S. Both Worldpay and First Data a digitally oriented audience, ensuring alone is expected to expand from bring gambling processing businesses payments technology evolves accord- $104 billion in 2017 to $155.5 billion and experience to their new owners. ingly will be critical.” 2024, according to Zion Research. Worldpay has been processing sports Two of Fiserv’s services for gaming Both FIS and Fiserv hope to use betting payments in the U.K. for years, include an ACH warranty, which helps acquired gaming technology from where it was legalized much earlier; enable access to bank Worldpay and First Data, respectively, while First Data has offered a digital accounts for the casino guest and to navigate the complicated pay- gaming payments platform for about mitigate risks for gaming establish- ment processing, risk and regulatory five years. ments accepting ACH payments. The requirements of sports betting. Both “The legalization of online sports company also offers digital disburse- of these deals closed in July, giving betting is bringing added diversity ment capabilities, enabling clients to the combined companies free rein to to the traditional brick and mortar provide digital payouts to players in move ahead with new strategies. world of gaming, first to the internet real time. “If you own both legs of the stool gaming side and more recently to the FIS’ Pappano has worked in gam-

28 Mergers & Acquisitions October 2019 TheMiddleMarket.com

028_MAJ1019 28 9/6/2019 9:35:41 AM ing payments for more than two Pappano’s team helps provide the a user experience challenge, such as decades, joining the former Vantiv in compliance checks that validates ensuring integration between bank 1992 and focusing on casino, iGam- legal betting, such as age verifica- accounts and cards, digital wallets ing, lottery and social gaming, among tion and geolocation that demon- and other payment methods. other products. A series of acquisitions strates the payment is coming from Sports gaming payments will likely has brought the former Vantiv to FIS, a jurisdiction and venue that is legal. be more complicated than other pay- culminating in FIS’ $43 billion deal to Since most sports betting is online — ment types, given the variety of wagers acquire Worldpay. Pappano estimates as much as 80% that are possible. Beyond results and Sports betting is an industry banks comes from New Jersey, for example point spreads, there is potential to bet have traditionally shied away from, — the digital payments have to be on more real-time events, such as score but as more states legalize the activ- tracked to a legal source. by inning, and even pitch selection. ity, technology companies will look to “If it’s from an online or mobile This has already spurred new grab bank clients that are interested offering, it has to be tied to a land- niches, such as NBC Sports Washing- in expanding their revenues from based casino, state lottery or race- ton’s gambling telecast that supports gaming payments. track,” Pappano said. “So you’re lever- wagering on in-game results. These Ten states have legalized sports aging AML and an ecosystem that we niche-within-a-niche options will betting, and more than a dozen others have used in other jurisdictions that place a premium on compliance and have legalization bills progressing we’re bringing to the U.S. Payments is real-time processing. through state legislatures. Like with the heartbeat of gaming and now that “The industry really boils down cryptocurrency and legal cannabis, it’s becoming legal banks are going to to finding simpler, faster, and more Betting on sports not all of these bills are the same, want to know how the controls work.” secure ways to move money,” said complicating compliance. Beyond compliance, there is also Connors. M&A Both Worldpay and First Data bring gambling processing businesses and experience to their new owners

By John Adams

palm of our hands via mobile gam- ing experiences,” said George Con- nors, who oversees gaming solutions at First Data, now part of Fiserv. “As the gaming industry embraces new technologies to meet the demands of a digitally oriented audience, ensuring payments technology evolves accord- ingly will be critical.” Two of Fiserv’s services for gaming include an ACH warranty, which helps enable access to bank accounts for the casino guest and mitigate risks for gaming establish- ments accepting ACH payments. The company also offers digital disburse- ment capabilities, enabling clients to provide digital payouts to players in real time. FIS’ Pappano has worked in gam-

TheMiddleMarket.com October 2019 Mergers & Acquisitions 29

029_MAJ1019 29 9/6/2019 9:35:44 AM Guest Article Guest Article

measuring innovation activity. The reasoning behind this is threefold: first, patents are not self-reported Unlike nonprofits or and cannot be altered to reflect bias. publicly-traded organiza- Second, they demand resources to tions, private equity owners produce, which implies do not have to publicly some degree of R&D submit quarterly financial spending. Lastly, they reports. This allows them to tend to coincide with make strategic, long-view other common signs decisions without worrying of innovation, such as about how shareholders employment growth and will view the short-term industry disruption. economic impact. Private Significantly, research equity investors also have has shown that compa- pre-established relation- nies that enjoy private ships with banks, which can equity support tend to help a company alleviate file more patents than restrictive financial pres- privately-owned busi-

ADOBE STOCK sures and gather more nesses. In a working paper published funding for innovative by the Dusseldorf Institute for Com- ideas. Moreover, because petition Economics (DICE) in 2015, Why PE investors are PE firms are focused on researchers reported that PE-backed optimizing operations and firms tended to file 40% more high- (hidden) innovators profitability over immediate quality patent applications than their performance, they can af- independent peers in the three years Private equity firms forge new ideas, products and methods to ford to be aggressive when following a leveraged buyout (LBO). change companies for the better it comes to making orga- Interestingly, the positive correla- nizational improvements, tion between innovation activity and management changes, LBOs was only statistically significant By Matthew Doyle growth decisions, and for private-to-private transactions, acquisitions. To rephrase suggesting that the firms that benefit Private equity investors aren’t exactly established conventions and changes a com- another way: private equity most from LBOs are private, financial- known for being frontrunners of innovation. pany for the better. That brand of innovation, investors are structurally constrained firms that can thrive with That buzzword is reserved for industry- I would argue, is well within a private equity equipped to take a “move new leadership and better resources. disrupting startups and entrepreneurs who firm’s forte. Humble and quiet as they might fast and build things” ap- Researchers for the DICE report take Silicon Valley’s move-fast-and-break- be about it, private equity investors spark proach to organizational concluded that private equity firms things culture as a personal creed. The innovation on a near-daily basis. innovation in their facilitated a company’s investment in term implies risk and demands revolution. Most private equity firms have the same investments. innovation by loosening their finan- It certainly doesn’t describe the calculated primary drive: to acquire underperform- The innovative edge cial constraints. Once the company buyouts and measured changes that private ing businesses, optimize their operations that PE-backed firms hold had the financial “room” to innovate, equity investors make when they invest in and management, and sell them at a profit over privately-owned busi- they tended to do so – and thus set established businesses – or does it? within a few years. This improvement-centric nesses can be measured the foundation for growth and profit Put popular use aside for a moment. The approach requires companies to deliver bet- to some extent–although down the line. real definition of innovation has more to do ter products at lower cost and with greater it is worth noting that It is worth mentioning, however, with sparking positive change than it does efficiency than they had previously. In other there is no perfect way to that while patent rates can provide with headline-grabbing disruption. At its words, private equity investors push for quantify innovation. Re- a rough sense of innovation activity, most foundational level, innovation can be organizational innovation – and are well- searchers often use patent any new idea, product, or method that shifts equipped to create it. rates as a rough proxy for Matthew Doyle is the chief operating officer and head of investor relations at Chicago Pacific Founders.

30 Mergers & Acquisitions October 2019 TheMiddleMarket.com

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measuring innovation activity. The it is in no way an all-encompassing last few years. According to a recent reasoning behind this is threefold: measure. After all, some innovations brief published by Bain and Company, first, patents are not self-reported don’t need to be formally patented if the number of deals involving retail Unlike nonprofits or and cannot be altered to reflect bias. they lack commercial value outside health businesses (i.e., those that offer publicly-traded organiza- Second, they demand resources to of an organization or do not need to independent health services like urgent tions, private equity owners produce, which implies be protected as intellec- care, dentistry, etc.) has skyrocketed, do not have to publicly some degree of R&D tual property. Consider rising at a compound annual rate of submit quarterly financial spending. Lastly, they operational innovations roughly 34% within the North American reports. This allows them to tend to coincide with like those described above market. make strategic, long-view other common signs as an example. While they Part of the market’s appeal lies in decisions without worrying of innovation, such as would have a signifi- its fragmentation and high potential about how shareholders employment growth and cant impact on business for growth. By consolidating disparate will view the short-term industry disruption. performance and indicate care-centered businesses, private eq- economic impact. Private Significantly, research innovative thought, they uity investors can both increase their equity investors also have has shown that compa- don’t necessarily need to consumer reach and earning potential pre-established relation- nies that enjoy private be patented -- and thus as well as streamline each business ships with banks, which can equity support tend to wouldn’t be included in into standardized efficiency. As a re- Matthew Doyle help a company alleviate file more patents than any patent-based survey sult, these optimized operations mini- restrictive financial pres- privately-owned busi- of innovation. mize the time and resources doctors sures and gather more nesses. In a working paper published I would like to offer an illustration of need to spend on administrative duties funding for innovative by the Dusseldorf Institute for Com- how valuable these intangible innova- and allow them more opportunities ideas. Moreover, because petition Economics (DICE) in 2015, tions can be for private equity investors to develop innovative care delivery PE firms are focused on researchers reported that PE-backed by turning to an industry rife with them: solutions. This leads to better experi- optimizing operations and firms tended to file 40% more high- Healthcare. ences for patients, increased efficiency profitability over immediate quality patent applications than their from the business, and more potential performance, they can af- independent peers in the three years Why the healthcare sector works for profit for investors. These innova- ford to be aggressive when following a leveraged buyout (LBO). The healthcare sector has long been tions might not be measured in patent it comes to making orga- Interestingly, the positive correla- a lucrative hotspot for private equity rates, but they are just as – if not more nizational improvements, tion between innovation activity and investment. Statistics provided by –valuable than any registered idea or management changes, LBOs was only statistically significant McKinsey and Company indicate that product. growth decisions, and for private-to-private transactions, the industry pulls ahead of all others As Joshua Kayle, chair of DLA Piper’s acquisitions. To rephrase suggesting that the firms that benefit for total returns; the consultancy esti- healthcare sector recently commented another way: private equity most from LBOs are private, financial- mates that in the span from 2010-2015, in an article for Modern Healthcare, investors are structurally constrained firms that can thrive with shareholders in healthcare earned “When private equity is looking to equipped to take a “move new leadership and better resources. global total returns of approximately deploy capital, they’re looking for fast and build things” ap- Researchers for the DICE report 15%. Some healthcare subsectors draw opportunities not just based on value, proach to organizational concluded that private equity firms more investment interest than oth- but the drivers of value. How can they innovation in their facilitated a company’s investment in ers; currently, researchers believe that bring their sophistication into solving a investments. innovation by loosening their finan- the sub-sectors that offer the most problem?’” The innovative edge cial constraints. Once the company significant potential for growth include Private equity investors answer that PE-backed firms hold had the financial “room” to innovate, biotechnology, medical devices, and variations on that question every day, over privately-owned busi- they tended to do so – and thus set retail health services. The last, however, and in every field. They might not claim nesses can be measured the foundation for growth and profit provides a particularly appealing op- headlines for their work, or take the to some extent–although down the line. portunity for private equity investment risks that most associate with success- it is worth noting that It is worth mentioning, however, and innovation. ful innovators, but one point is for sure: there is no perfect way to that while patent rates can provide The retail sub-sector has enjoyed Their work is equally – if humbly – quantify innovation. Re- a rough sense of innovation activity, quite a bit of investor attention over the transformative. M&A searchers often use patent rates as a rough proxy for Matthew Doyle is the chief operating officer and head of investor relations at Chicago Pacific Founders.

TheMiddleMarket.com October 2019 Mergers & Acquisitions 31

031_MAJ1019 31 9/6/2019 9:34:25 AM Q&A

might decide that the most the need for someone in that role full- cost-efficient approach is to time and/or the budget for the full-time use a consultant for a finite hire at that level. Or a client will call us period of time rather than a because they have exhausted the junior direct hire. to mid-level pool for a support role but are not happy with the talent they are Why do some finan- seeing. We can utilize our network to cial services profession- find someone more senior with relevant als need flexibility? experience who is willing to take a Many of the financial break on compensation in exchange for services professionals look- a 20-30 hour work week. ing for flexibility are feeling the lack of work life bal- How are private equity firms ance in their lives. They are and other companies involved in currently working full-time, M&A using Prokanga’s services? and don’t want to walk We have worked with all types of away from the careers that finance companies, including private they have worked so hard equity firms, hedge funds, boutique in- to build, but the oftentimes vestment banks, and service providers grueling finance hours take a toll on the time they have ADOBE STOCK to spend with their families. The ideal situation for these Fostering flexibility professionals is a role where they can continue on their Prokanga helps financial services professionals find roles that career path, but with some offer more balance between work and life degree of flexibility to en- able them more time with By Mary Kathleen Flynn their families. We also work with professionals who have built successful consulting Prokanga is a unique recruiting firm that dates. This unique access and our pioneer- businesses and are looking offers full-time and flexible recruiting ser- ing approach to considering flexibility as for new projects. vices. Prokanga is managed by co-founders part of the compensation dollar, allows us Jamie Cheney and Lesley Finer. Mergers & to deliver effective and cost-efficient hiring What are some typi- Acquisitions spoke with Finer, who has more solutions to our clients. We work very closely cal career paths you can Mergers & Acquisitions than 10 years of recruiting for the finance with our clients (employers), often starting outline? on Facebook for the industry and leads the finance practice at from the moment that a business challenge There are three typical latest news and trends Prokanga. arises, to help them identify and understand career paths that we source: in the middle-market various types of flexibility that will work for consultants, permanent industry. What is Prokanga and how does it their industry and organization. We can part-time, and full-time. work? then propose a range of options depending Small to medium-sized busi- Prokanga is the only recruiting firm in the on the specific business challenge - from ness often engage us for a market offering access to the traditional, a full-time junior employee to a part-time, permanent part-time hire full-time workforce, as well as high caliber more senior hire who could hit the ground when they need a senior part-time and consulting pools of candi- running and require less supervision. Or we level hire but they don’t have

32 Mergers & Acquisitions October 2019 TheMiddleMarket.com

032_MAJ1019 32 9/6/2019 9:33:37 AM Q&A

might decide that the most the need for someone in that role full- to the industry. Some of our key flex- What do you predict for the fu- cost-efficient approach is to time and/or the budget for the full-time ible placements in finance have been ture in terms of financial services use a consultant for a finite hire at that level. Or a client will call us a part-time Head of Investor Relations careers & flexibility? period of time rather than a because they have exhausted the junior for a $3 billion private equity firm, The financial services industry is direct hire. to mid-level pool for a support role but part-time Head of Research within the finally starting to catch up to other are not happy with the talent they are business development/deal sourcing industries that are embracing flexibility. Why do some finan- seeing. We can utilize our network to team for a middle market PE firm, a We have seen the number of cial services profession- find someone more senior with relevant scalable Associate/VP at a boutique companies that are open to using flex- als need flexibility? experience who is willing to take a investment bank (scales up to full-time ibility as a strategic tool to attract and Many of the financial break on compensation in exchange for during heavy deal flow) and several retain employees grow significantly services professionals look- a 20-30 hour work week. part-time consultants placed with a since we entered the finance industry ing for flexibility are feeling leading PE placement agent. We have several years ago. I think one of the the lack of work life bal- How are private equity firms also worked with a number of smaller real keys to success for future growth ance in their lives. They are and other companies involved in private equity firms on investor is understanding that flexibility is not a currently working full-time, M&A using Prokanga’s services? relations projects including creat- one size fits all solution, and may not and don’t want to walk We have worked with all types of ing PPMs, DDQs, updating marketing be the right option at all for some roles. away from the careers that finance companies, including private materials, etc. That’s why we work so closely with our they have worked so hard equity firms, hedge funds, boutique in- clients to figure out the right solution to build, but the oftentimes vestment banks, and service providers for their unique business needs. M&A grueling finance hours take a toll on the time they have to spend with their families. The ideal situation for these professionals is a role where they can continue on their career path, but with some degree of flexibility to en- able them more time with their families. We also work with professionals who have built successful consulting businesses and are looking for new projects.

What are some typi- cal career paths you can outline? Mergers & Acquisitions covers all There are three typical career paths that we source: aspects of middle-market dealmaking consultants, permanent Get access to exclusive news and analysis of deal sourcing, structures, restructuring, and exits. part-time, and full-time. Professionals on all sides of the deal come here to exchange new ideas and develop winning strategies. Small to medium-sized busi- ness often engage us for a Leaders start here. Subscribe today at: permanent part-time hire www.themiddlemarket.com/subscribe when they need a senior (212) 803-8500 level hire but they don’t have

TheMiddleMarket.com October 2019 Mergers & Acquisitions 33

033_MAJ1019 33 9/9/2019 6:42:33 PM People Moves

New hires and promotions

By Demitri Diakantonis

Amna Arshad has joined law firm Freshfields Brian Hecht has joined law firm Katten Gretchen McClain was Bruckhaus Deringer US LLP as a special Muchin Rosenman LLP as a partner. Hecht hired by the Carlyle Group counsel. She will be focusing on regulatory was previously with Kirkland & Ellis, and (Nasdaq: CG) as an operat- and commercial matters including transac- focuses on private equity and M&A. ing executive in the firm’s tions and investigations. Arshad was previous- industrials and transporta- ly with the U.S. Department of Transportation. Ramey Jackson has been named CEO at tion group. McClain was Clearlake-backed Janus International Group, most recently the CEO of Michael Bernstein was hired by private equity a technology maker for the self-storage water technology company firm Arsenal Capital Partners as an operat- and industrials sectors. Jackson was most Xylem Inc. (NYSE: XYL). ing partner, where he is focusing on invest- recently the vice president of sales at Janus. ments in outsourced business Joe Passaro was hired by services, payers, and care Stacey Kern has joined law financial services firm BTIG provision. Bernstein was most firm Eversheds Sutherland as a as a managing director and recently a partner at Baird partner. Previously with Green- head of capital markets. Capital Partners. berg Traurig, Kern focuses on He was most recently with M&A and private equity across Deutsche Bank Securities. Christopher Conover has the manufacturing, technol- joined advisory firm FTI ogy, pharmaceuticals and Scott Shebelsky has been Consulting Inc. (NYSE: FCN) energy sectors. promoted to CFO at PE firm as a managing director. Pre- Lovell Minnick Partners. Stacey Kern viously with Comstock Hold- Patrick Knapp has joined Shebelsky joined the firm ings, Conover concentrates law firm McGuireWoods as a in 2015 as vice president of on capital and debt acquisi- partner, where he is concen- finance and chief compli- tions along with complex tax trating on M&A in the oil and ance officer. structuring and compliance gas sector. Knapp was most transactions. recently with Bridger Logistics, John Sheputis was hired by the midstream division of Fer- private investment firm Bryan Gadol was hired by rellgas Partners LP. GI Partners, where he is law firm Orrick as a partner. leading the firm’s real estate Gadol was most recently with Katherine Kost was hired by acquisition efforts. Sheputis Morgan Lewis, and focuses Scott Shebelsky consulting firm TriVista as a is the former CEO of Fortu- on M&A and private equity across the tech- managing director and head of the firm’s nate Data Centers. nology, medical devices, beauty, healthcare new IT and operations technology group. and manufacturing sectors. Kost was previously with Meggitt Plc. Bill Stotzer was hired by advisory firm FTI Consulting Scott Hart has been named co-CEO at Bruce Larson has been named chief human Inc. (NYSE: FCN) as a man- StepStone Group, a private markets invest- resources officer at the Carlyle Group aging director. Stotzer was ment advisory firm. Hart is the head of (Nasdaq: CG). Larson is a former Goldman most recently with Alvarez & private equity. Sachs (NYSE: GS) partner. Marsal. M&A

34 Mergers & Acquisitions October 2019

034_MAJ1019 34 9/6/2019 9:39:14 AM Key Middle-Market M&A Deals Completed in July 2019

Date Acquirer Target Target Industry Value ($mil)

07/16/19 Nextera Energy Transmission Trans Bay Cable LLC Electric, Gas, and Water Distribution 1000.0 07/01/19 Victory Capital Holdings Inc USAA Asset Management Co Investment & Commodity Firms,Dealers,Exchanges 1000.0 07/31/19 ICG Strategic Eq Advisors LLC Standard Chartered- PE Busines Investment & Commodity Firms,Dealers,Exchanges 994.1 07/16/19 Wieland-Werke AG Global Brass & Copper Holdings Metal and Metal Products 989.4 07/03/19 Investor Group Unibail-Rodamco-Wfield Real Estate; Mortgage Bankers and Brokers 966.8 07/29/19 Investor Group Australis Seafoods SA Food and Kindred Products 921.6 07/26/19 Tokai Carbon Co Ltd COBEX Holdco GmbH Electronic and Electrical Equipment 921.2 07/01/19 Liberty House Ltd Arcelormittal Piombino SpA Metal and Metal Products 841.2 07/01/19 Pfizer Inc Therachon AG (Now 4j8824) Drugs 810.0 07/04/19 Euronext NV Oslo Bors VPS Holding ASA Investment & Commodity Firms,Dealers,Exchanges 790.3 07/02/19 Perrigo Co PLC Ranir LLC Soaps, Cosmetics, and Personal-Care Products 750.0 07/17/19 Goldman Sachs Group Inc United Capital Finl Partners Investment & Commodity Firms,Dealers,Exchanges 750.0 07/01/19 Ameris Bancorp Fidelity Southern Corp Commercial Banks, Bank Holding Companies 743.0 07/26/19 Thai Insurance PCL Southeast Group Co Ltd Insurance 737.7 07/02/19 Larsen & Toubro Ltd Mindtree Ltd Business Services 729.6 07/25/19 Zambon SpA Breath Therapeutics GmbH Business Services 712.9 07/01/19 Edwards Vacuum Llc Brooks Automation-cryogenics Machinery 675.0 07/02/19 SCG Packaging PCL Fajar Surya Wisesa Tbk PT Paper and Allied Products 672.0 07/01/19 Nidec Corp Whirlpool-Embraco Compressor Machinery 671.8 07/03/19 Morningstar Inc DBRS Ltd Investment & Commodity Firms,Dealers,Exchanges 669.0 07/31/19 Trafigura Group Pte Ltd Nyrstar NV Metal and Metal Products 642.0 07/01/19 Shareholders Adapteo Oyj Business Services 639.6 07/01/19 Mitsubishi Corp Chiyoda Corp Business Services 635.8 07/19/19 Cathay Pacific Airways Ltd Hong Kong Express Airways Ltd Air Transportation and Shipping 628.1 07/01/19 Harsco Corp Clean Earth Inc Sanitary Services 625.0 07/01/19 Chart Industries Inc Harsco Industrial Hammco LLC Metal and Metal Products 592.0 07/11/19 Thunder Bridge Acq Ltd Repay Holdings LLC Other Financial 580.7 07/29/19 Changsheng Xingye (Xiamen) Beijing Borgward Auto Co Ltd Transportation Equipment 578.7 07/08/19 Orange SA SecureLink Nederland BV Prepackaged Software 576.6 07/01/19 Arkema SA ArrMaz Custom Chemicals Inc Chemicals and Allied Products 570.0 07/06/19 India Grid Trust NRSS XXIX Transmission Ltd Electric, Gas, and Water Distribution 548.5 07/17/19 Baloise Holding AG Fidea Insurance 542.4 07/19/19 Nord Pacific Ltd Atlantic Gold Corp Mining 531.8 07/18/19 Swedish Orphan Biovitrum AB NovImmune SA-Emapalumab Drugs 519.0 07/24/19 Investor Group IXM BV Mining 496.0 07/24/19 CMOC Ltd New Silk Road Commodities SA Wholesale Trade-Durable Goods 495.0 07/18/19 Elanco Animal Health Inc Aratana Therapeutics Inc Drugs 479.9 07/15/19 Boehringer Ingelheim GmbH Amal Therapeutics SA Business Services 478.9 07/30/19 SV Robinson 71 Robinson Road Real Estate; Mortgage Bankers and Brokers 478.1 07/17/19 AXA Real Estate Invest Mgrs SA Doubletree By Hotels and Casinos 476.4 07/10/19 Novena Global Healthcare Grp Xingkeduo (Beijing) Beauty Personal Services 475.4 07/15/19 Vistra Energy Corp Crius Energy Trust Electric, Gas, and Water Distribution 459.0 07/11/19 Immofinanz AG Ghelamco PL-Warsaw Spire Tower Real Estate; Mortgage Bankers and Brokers 435.7 07/29/19 Greenbrier Cos Inc Amer Railcar Ind-Mnfg Business Transportation Equipment 430.0 07/02/19 E2open Inc Amber Road Inc Prepackaged Software 410.8

TheMiddleMarket.com October 2019 Mergers & Acquisitions 35

035_MAJ1019 35 9/6/2019 4:31:50 PM Key Middle-Market M&A Deals Completed in July 2019

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

07/09/19 Palo Alto Networks Inc Twistlock Ltd Prepackaged Software 410.0 07/04/19 AM Gestio SL El Corte Ingles-Frances Macia Real Estate; Mortgage Bankers and Brokers 171.4 07/01/19 H&R Block Inc Wave Financial Inc Other Financial 405.0 07/08/19 Long Range Acquisition LLC Caliber Co Metal and Metal Products 170.0 07/02/19 Investor Group NGL Energy Partners LP-Mesquit Sanitary Services 400.0 07/18/19 Azora Altus SA Banco De Sabadell Sa-Rental Real Estate; Mortgage Bankers and Brokers 168.3 07/31/19 Melco Resorts & Entertainment ICR Cyprus Holdings Ltd Hotels and Casinos 375.0 07/01/19 CDC Habitat Aavand Sarl-Real Estate Assets Real Estate; Mortgage Bankers and Brokers 168.2 07/31/19 Boluda Corporacion Maritima SL Kotug Smit Towage NL BV Transportation and Shipping (except air) 341.2 07/31/19 SG Casa Pte Ltd Winright Invest Pte Ltd-Ppty Real Estate; Mortgage Bankers and Brokers 167.9 07/31/19 Bernard Bidco Ltd Premier Technical Svcs Grp PLC Business Services 335.3 07/29/19 Amgen Inc Nuevolution AB Drugs 166.9 07/10/19 ECE European Prime Shopping II Atrium Eur RE-Shpng Cntrs(2) Real Estate; Mortgage Bankers and Brokers 334.7 07/15/19 Entegris Inc MPD Chemicals LLC Chemicals and Allied Products 165.0 07/23/19 Arsenal Capital Partners LP Seal For Life Chemicals and Allied Products 328.0 07/31/19 Mediahuis NV Independent News & Media PLC Printing, Publishing, and Allied Services 162.8 07/09/19 Sequitur Permian LLC Callon Petro Co-Non Core Asts Oil and Gas; Petroleum Refining 325.7 07/01/19 EOS Investors LLC Kingston Resorts,SC Hotels and Casinos 156.0 07/25/19 Colony Capital Inc Digital Bridge Holdings LLC Investment & Commodity Firms,Dealers,Exchanges 325.0 07/24/19 Neptune Wellness Solutions Inc Sugarleaf Labs LLC Wholesale Trade-Nondurable Goods 150.0 07/26/19 Investor Group 8 Finsbury Circus London Real Estate; Mortgage Bankers and Brokers 323.8 07/31/19 UnipolRec SpA BPER Banca Spa-NPL Portfolio Credit Institutions 147.4 07/26/19 Investor Group Mitsubishi Estate-Fnsbry Crcs Real Estate; Mortgage Bankers and Brokers 323.8 07/24/19 Lexian Educ Consultancy Chongqing Nanfang Translators Educational Services 147.0 07/11/19 Vanbarton Group LLC 901 Fifth Ave,Seattle,WA Real Estate; Mortgage Bankers and Brokers 305.0 07/17/19 Infront ASA Vereinigte Wirtschaftsdienste Business Services 146.5 07/01/19 Amasten Fastighets AB Urbano AB Investment & Commodity Firms,Dealers,Exchanges 304.2 07/09/19 Coima Opportunity Fund II Deka Immobilien-RE Ppty. Milan Real Estate; Mortgage Bankers and Brokers 145.9 07/19/19 Jacko Rise Pte Ltd Island Land Dvlp Ltd Real Estate; Mortgage Bankers and Brokers 302.6 07/31/19 LISI Group (Holdings) Ltd Robust Coop Ltd Real Estate; Mortgage Bankers and Brokers 143.6 07/03/19 Koradior Holdings Ltd Keen Reach Hldg Ltd Wholesale Trade-Nondurable Goods 301.2 07/01/19 Rockrose Energy Plc Marathon Oil UK Ltd Oil and Gas; Petroleum Refining 140.0 07/12/19 Hugel Inc Dongyang Hc Co Ltd Wholesale Trade-Durable Goods 285.7 07/29/19 First Financial Corp HopFed Bancorp Inc Savings and Loans, Mutual Savings Banks 139.6 07/25/19 Bper Banca SpA Banco di Sardegna SpA Commercial Banks, Bank Holding Companies 282.9 07/10/19 Qurain Petrochem Inds Co KSCP Jassim Transport & Transportation and Shipping (except air) 138.3 07/31/19 BY-Health Co Ltd Guangzhou By-Health BySen Co Wholesale Trade-Nondurable Goods 277.7 07/06/19 Sinomine (Hong Kong) Rare Tantalum Mining Corp of Canada Mining 136.7 07/31/19 Capitol Investment Corp Iv Nesco Sales & Rentals Inc Business Services 264.9 07/02/19 Ima SpA Atop SpA Electronic and Electrical Equipment 256.9 07/02/19 DIC Asset AG GEG German Estate Group AG Investment & Commodity Firms,Dealers,Exchanges 253.1 07/10/19 Nippon Paint Holdings Co Ltd Betek Boya Ve Kimya Sanayi AS Chemicals and Allied Products 245.6 07/26/19 Lone Star Fund XI LP Bkia SA-Non Performing Loan Credit Institutions 243.0 07/31/19 Cannex Capital Holdings Inc 4Front Holdings LLC Miscellaneous Retail Trade 242.9 07/30/19 Lotte Chemical Corp Lotte Advanced Materials Co Chemicals and Allied Products 236.5 07/01/19 HEXPOL AB Preferred Compounding Corp Chemicals and Allied Products 232.0 07/01/19 Encompass Health Corp Alacare Home Health & Hospice Health Services 217.5 07/31/19 Icade Sante SAS Swiss Life AM-Healthcare Portf Health Services 215.3 07/01/19 Ramirent Oyj Stavdal AB Business Services 215.2 07/01/19 Hartree Cardinal Gas LLC Martin Midstream Partners-NGSA Wholesale Trade-Nondurable Goods 215.0 07/31/19 Parsons Corp QCR LLC Measuring, Medical, Photo Equipment; Clocks 215.0 07/25/19 AEMZ OOO Severstal Balakovo AO Metal and Metal Products 215.0 07/31/19 Tadano Ltd Demag-Mobile Cranes Bussinsess Machinery 214.9 07/31/19 Tadano Ltd Terex Corp-Subsidiaries(7) Machinery 214.9 07/03/19 Sichuan Haowu Neijing Pengxiang Invest Co Miscellaneous Retail Trade 208.5 07/15/19 Butterfield Bk (Guernsey) Ltd ABN AMRO (Channel Islands) Ltd Commercial Banks, Bank Holding Companies 207.7 07/29/19 xTV Networks Ltd New Zealand Coastal Seafoods Wholesale Trade-Nondurable Goods 201.7 ® 07/23/19 Arclight Energy Partners Fund American Midstream Partners LP Electric, Gas, and Water Distribution 201.4 07/30/19 Zhejiang Jinghua Laser Tech Frestamp Inc Investment & Commodity Firms,Dealers,Exchanges 200.0 07/09/19 Shenzhen Inovance Tech Co Ltd Shanghai BST Electric Co Ltd Machinery 189.1 07/01/19 Owens-Illinois Inc Nueva Fabrica Nacional De Vidr Stone, Clay, Glass, and Concrete Products 188.0 07/24/19 Investor Group Banco Sabadell SA-Loan Credit Institutions 187.8 07/08/19 PetIQ Inc Sergeant’s Pet Prod Care Inc Drugs 185.0 07/16/19 Hanil Holdings Co Ltd Hlk Hldg Co Ltd Investment & Commodity Firms,Dealers,Exchanges 184.0 You've Gotta Be There 07/22/19 GFH Capital Ltd Senior Healthcare Portfolio,US Social Services 180.0 07/16/19 FNZ (UK) Ltd ebase Investment & Commodity Firms,Dealers,Exchanges 177.4 07/29/19 Meritor Inc Axletech International Corp Transportation Equipment 175.0 Thursday, February 13, 2020 07/09/19 Kordsa Inc Axiom Materials Inc Rubber and Miscellaneous Plastic Products 174.8 OMNI SAN DIEGO HOTEL 07/06/19 India Grid Trust Odisha Gentn Phs II Tranms Ltd Electric, Gas, and Water Distribution 173.3 Photo: La Jolla Cliffs, CA on February 13, 2019

36 Mergers & Acquisitions October 2019

036_MAJ1019 36 9/6/2019 4:31:53 PM Key Middle-Market M&A Deals Completed in July 2019

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

07/09/19 Palo Alto Networks Inc Twistlock Ltd Prepackaged Software 410.0 07/04/19 AM Gestio SL El Corte Ingles-Frances Macia Real Estate; Mortgage Bankers and Brokers 171.4 07/01/19 H&R Block Inc Wave Financial Inc Other Financial 405.0 07/08/19 Long Range Acquisition LLC Caliber Co Metal and Metal Products 170.0 07/02/19 Investor Group NGL Energy Partners LP-Mesquit Sanitary Services 400.0 07/18/19 Azora Altus SA Banco De Sabadell Sa-Rental Real Estate; Mortgage Bankers and Brokers 168.3 07/31/19 Melco Resorts & Entertainment ICR Cyprus Holdings Ltd Hotels and Casinos 375.0 07/01/19 CDC Habitat Aavand Sarl-Real Estate Assets Real Estate; Mortgage Bankers and Brokers 168.2 07/31/19 Boluda Corporacion Maritima SL Kotug Smit Towage NL BV Transportation and Shipping (except air) 341.2 07/31/19 SG Casa Pte Ltd Winright Invest Pte Ltd-Ppty Real Estate; Mortgage Bankers and Brokers 167.9 07/31/19 Bernard Bidco Ltd Premier Technical Svcs Grp PLC Business Services 335.3 07/29/19 Amgen Inc Nuevolution AB Drugs 166.9 07/10/19 ECE European Prime Shopping II Atrium Eur RE-Shpng Cntrs(2) Real Estate; Mortgage Bankers and Brokers 334.7 07/15/19 Entegris Inc MPD Chemicals LLC Chemicals and Allied Products 165.0 07/23/19 Arsenal Capital Partners LP Seal For Life Chemicals and Allied Products 328.0 07/31/19 Mediahuis NV Independent News & Media PLC Printing, Publishing, and Allied Services 162.8 07/09/19 Sequitur Permian LLC Callon Petro Co-Non Core Asts Oil and Gas; Petroleum Refining 325.7 07/01/19 EOS Investors LLC Kingston Resorts,SC Hotels and Casinos 156.0 07/25/19 Colony Capital Inc Digital Bridge Holdings LLC Investment & Commodity Firms,Dealers,Exchanges 325.0 07/24/19 Neptune Wellness Solutions Inc Sugarleaf Labs LLC Wholesale Trade-Nondurable Goods 150.0 07/26/19 Investor Group 8 Finsbury Circus London Real Estate; Mortgage Bankers and Brokers 323.8 07/31/19 UnipolRec SpA BPER Banca Spa-NPL Portfolio Credit Institutions 147.4 07/26/19 Investor Group Mitsubishi Estate-Fnsbry Crcs Real Estate; Mortgage Bankers and Brokers 323.8 07/24/19 Lexian Educ Consultancy Chongqing Nanfang Translators Educational Services 147.0 07/11/19 Vanbarton Group LLC 901 Fifth Ave,Seattle,WA Real Estate; Mortgage Bankers and Brokers 305.0 07/17/19 Infront ASA Vereinigte Wirtschaftsdienste Business Services 146.5 07/01/19 Amasten Fastighets AB Urbano AB Investment & Commodity Firms,Dealers,Exchanges 304.2 07/09/19 Coima Opportunity Fund II Deka Immobilien-RE Ppty. Milan Real Estate; Mortgage Bankers and Brokers 145.9 07/19/19 Jacko Rise Pte Ltd Island Land Dvlp Ltd Real Estate; Mortgage Bankers and Brokers 302.6 07/31/19 LISI Group (Holdings) Ltd Robust Coop Ltd Real Estate; Mortgage Bankers and Brokers 143.6 07/03/19 Koradior Holdings Ltd Keen Reach Hldg Ltd Wholesale Trade-Nondurable Goods 301.2 07/01/19 Rockrose Energy Plc Marathon Oil UK Ltd Oil and Gas; Petroleum Refining 140.0 07/12/19 Hugel Inc Dongyang Hc Co Ltd Wholesale Trade-Durable Goods 285.7 07/29/19 First Financial Corp HopFed Bancorp Inc Savings and Loans, Mutual Savings Banks 139.6 07/25/19 Bper Banca SpA Banco di Sardegna SpA Commercial Banks, Bank Holding Companies 282.9 07/10/19 Qurain Petrochem Inds Co KSCP Jassim Transport & Transportation and Shipping (except air) 138.3 07/31/19 BY-Health Co Ltd Guangzhou By-Health BySen Co Wholesale Trade-Nondurable Goods 277.7 07/06/19 Sinomine (Hong Kong) Rare Tantalum Mining Corp of Canada Mining 136.7 07/31/19 Capitol Investment Corp Iv Nesco Sales & Rentals Inc Business Services 264.9 07/02/19 Ima SpA Atop SpA Electronic and Electrical Equipment 256.9 07/02/19 DIC Asset AG GEG German Estate Group AG Investment & Commodity Firms,Dealers,Exchanges 253.1 07/10/19 Nippon Paint Holdings Co Ltd Betek Boya Ve Kimya Sanayi AS Chemicals and Allied Products 245.6 07/26/19 Lone Star Fund XI LP Bkia SA-Non Performing Loan Credit Institutions 243.0 07/31/19 Cannex Capital Holdings Inc 4Front Holdings LLC Miscellaneous Retail Trade 242.9 07/30/19 Lotte Chemical Corp Lotte Advanced Materials Co Chemicals and Allied Products 236.5 07/01/19 HEXPOL AB Preferred Compounding Corp Chemicals and Allied Products 232.0 07/01/19 Encompass Health Corp Alacare Home Health & Hospice Health Services 217.5 07/31/19 Icade Sante SAS Swiss Life AM-Healthcare Portf Health Services 215.3 07/01/19 Ramirent Oyj Stavdal AB Business Services 215.2 07/01/19 Hartree Cardinal Gas LLC Martin Midstream Partners-NGSA Wholesale Trade-Nondurable Goods 215.0 07/31/19 Parsons Corp QCR LLC Measuring, Medical, Photo Equipment; Clocks 215.0 07/25/19 AEMZ OOO Severstal Balakovo AO Metal and Metal Products 215.0 07/31/19 Tadano Ltd Demag-Mobile Cranes Bussinsess Machinery 214.9 07/31/19 Tadano Ltd Terex Corp-Subsidiaries(7) Machinery 214.9 07/03/19 Sichuan Haowu Neijing Pengxiang Invest Co Miscellaneous Retail Trade 208.5 07/15/19 Butterfield Bk (Guernsey) Ltd ABN AMRO (Channel Islands) Ltd Commercial Banks, Bank Holding Companies 207.7 07/29/19 xTV Networks Ltd New Zealand Coastal Seafoods Wholesale Trade-Nondurable Goods 201.7 ® 07/23/19 Arclight Energy Partners Fund American Midstream Partners LP Electric, Gas, and Water Distribution 201.4 07/30/19 Zhejiang Jinghua Laser Tech Frestamp Inc Investment & Commodity Firms,Dealers,Exchanges 200.0 07/09/19 Shenzhen Inovance Tech Co Ltd Shanghai BST Electric Co Ltd Machinery 189.1 07/01/19 Owens-Illinois Inc Nueva Fabrica Nacional De Vidr Stone, Clay, Glass, and Concrete Products 188.0 07/24/19 Investor Group Banco Sabadell SA-Loan Credit Institutions 187.8 07/08/19 PetIQ Inc Sergeant’s Pet Prod Care Inc Drugs 185.0 07/16/19 Hanil Holdings Co Ltd Hlk Hldg Co Ltd Investment & Commodity Firms,Dealers,Exchanges 184.0 You've Gotta Be There 07/22/19 GFH Capital Ltd Senior Healthcare Portfolio,US Social Services 180.0 07/16/19 FNZ (UK) Ltd ebase Investment & Commodity Firms,Dealers,Exchanges 177.4 07/29/19 Meritor Inc Axletech International Corp Transportation Equipment 175.0 Thursday, February 13, 2020 07/09/19 Kordsa Inc Axiom Materials Inc Rubber and Miscellaneous Plastic Products 174.8 OMNI SAN DIEGO HOTEL 07/06/19 India Grid Trust Odisha Gentn Phs II Tranms Ltd Electric, Gas, and Water Distribution 173.3 Photo: La Jolla Cliffs, CA on February 13, 2019

037_MAJ1019 37 9/6/2019 4:31:53 PM Key Middle-Market M&A Deals Completed in July 2019

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

07/18/19 IDEX Corp Velcora Holding AB Business Services 136.7 07/11/19 Diploma PLC Virginia Sealing-Assets Rubber and Miscellaneous Plastic Products 80.0 07/26/19 M-Universe Investments Pte Ltd Memtech International Ltd Rubber and Miscellaneous Plastic Products 135.2 07/31/19 Reworld Media SA Mondadori France SAS Printing, Publishing, and Allied Services 79.9 07/31/19 Wanhua Chem (Hungary) Hldg Co Chematur Technologies AB Chemicals and Allied Products 134.4 07/30/19 Thuringer GWB Elstertal Geraer Investment & Commodity Firms,Dealers,Exchanges 79.8 07/31/19 Ceramica Urussanga SA Cecrisa Revestimentos Stone, Clay, Glass, and Concrete Products 133.5 07/01/19 StepStone GmbH AppCast Inc Prepackaged Software 79.6 07/03/19 Investor Group Unicredito Immobiliare Uno-RE Real Estate; Mortgage Bankers and Brokers 132.0 07/10/19 Dso Italia Srl Sistemia SPA Investment & Commodity Firms,Dealers,Exchanges 79.2 07/08/19 Cedar FIP Ouro Verde Locacao e Servico Repair Services 130.8 07/01/19 Arbah Capital Sauchiehall Shopping Centre Real Estate; Mortgage Bankers and Brokers 76.2 07/12/19 Investor Group Ivanhoe Cambridge-Office Bldg Real Estate; Mortgage Bankers and Brokers 127.3 07/31/19 Hangzhou Changchuan Tech Co Hangzhou Changxin Invest Mgmt Investment & Commodity Firms,Dealers,Exchanges 75.7 07/19/19 Globalworth Re Invests Ltd LC Corp SA-Office Buildings(2) Real Estate; Mortgage Bankers and Brokers 126.0 07/01/19 Eagle Natural Resources LLC Mosman Oil & Gas Ltd-Strawn Oil and Gas; Petroleum Refining 75.0 07/22/19 Investor Group 800 Brickell Office & Ret Real Estate; Mortgage Bankers and Brokers 125.5 07/26/19 Unicaja Banco SA Unicaja Banco SA-Credit Credit Institutions 74.0 07/17/19 8x8 Inc Wavecell Pte Ltd Prepackaged Software 125.0 07/31/19 BRX Transportation Holdings Pioneer Railcorp Transportation and Shipping (except air) 72.4 07/31/19 Arvida Group Ltd Sanderson Group-Retirement Vil Health Services 121.8 07/30/19 BlueGem Capital Partners LLP Pool Service Srl Soaps, Cosmetics, and Personal-Care Products 71.3 07/01/19 Exan Capital LLC 1701 Rhode Island Ave,WA DC Real Estate; Mortgage Bankers and Brokers 119.0 07/01/19 Silvercrest Asset Mgmt Grp LLC Cortina Asset Management LLC Investment & Commodity Firms,Dealers,Exchanges 71.1 07/02/19 Forus Deporte y Ocio SL Santagadea Gestion Deportva SL Amusement and Recreation Services 117.4 07/01/19 Tiarco LLC Hb Fuller-Surfactants Business Chemicals and Allied Products 71.0 07/09/19 Harbor Group International LLC The Frederick,Brooklyn,NY Real Estate; Mortgage Bankers and Brokers 117.0 07/02/19 Federal Signal Corp Mark Rite Lines Equip Co Inc Machinery 71.0 07/01/19 Casa Systems Inc Netcomm Wireless Ltd Communications Equipment 114.2 07/12/19 Fosun International Ltd Tom Tailor Holding Se Textile and Apparel Products 70.9 07/08/19 8S Capital Hldg Pte Ltd 800 Super Holdings Ltd Sanitary Services 113.8 07/02/19 Investor Group Kee Holdings Co Ltd Miscellaneous Manufacturing 70.0 07/16/19 CCP 5 LL Vision Escritorios-Office Buil Real Estate; Mortgage Bankers and Brokers 112.6 07/12/19 Link Industrial Properties Tampa Distribution Center Real Estate; Mortgage Bankers and Brokers 69.3 07/10/19 LCN Capital Partners LP Merkur trgovina doo-Retail Cen Real Estate; Mortgage Bankers and Brokers 112.1 07/01/19 Providence Equity Partners LLC Chime Communications Ltd Business Services 69.1 07/30/19 Mata Capital SAS Mercialys Sa-Monoprix Sites Retail Trade-General Merchandise and Apparel 111.4 07/10/19 Catalyst Capital Group Inc Bluberi Gaming Canada Inc Prepackaged Software 68.6 07/20/19 Upsher-Smith Laboratories Inc Promius Pharma LLC-US & Select Drugs 110.5 07/08/19 CITIC Securities Co Ltd CITIC Futures Co Ltd Investment & Commodity Firms,Dealers,Exchanges 68.0 07/29/19 Shanghai Yongdasheng Bus Jingmen Tianmao Chem Co Ltd Chemicals and Allied Products 110.3 07/01/19 German American Bancorp Inc Citizens First Corp Commercial Banks, Bank Holding Companies 67.9 07/03/19 Heimstaden AB Patrizia Immobilien-Residentia Real Estate; Mortgage Bankers and Brokers 109.9 07/19/19 DIC Asset AG Stadtfenster Property,Duisburg Real Estate; Mortgage Bankers and Brokers 65.5 07/16/19 China National Nuclear Corp Rossing Uranium Ltd Mining 106.5 07/04/19 Zhenshi Grp (HK) Heshi China Hengshi Foundation Co Textile and Apparel Products 65.4 07/31/19 MacGregor Group AB Tts Grp Asa-Marine & Offshore Machinery 106.3 07/26/19 Casino Guichard-Perrachon SA Casino Guichard-Markets(3) Retail Trade-General Merchandise and Apparel 64.6 07/04/19 Kokusai Pulp & Paper Co Ltd Spicers Ltd Wholesale Trade-Nondurable Goods 105.7 07/30/19 Shinkawa Ltd Apic Yamada Corp Electronic and Electrical Equipment 64.1 07/25/19 Chaolong Developments Pty Ltd Novotel Melbourne Glen Waverly Hotels and Casinos 104.6 07/25/19 Sucres et Denrees SA GK Trio OOO Agriculture, Forestry, and Fishing 63.8 07/09/19 Al Rayyan Tourism Investment Seba AS-JW Marriott Hotel Hotels and Casinos 104.3 07/16/19 Bufab AB HT BENDIX A/S Wholesale Trade-Durable Goods 62.8 07/19/19 Green City Dvlp Ltd Precious Palace Entrps Ltd Investment & Commodity Firms,Dealers,Exchanges 101.5 07/29/19 Cranswick PLC Katsouris Brothers Ltd Wholesale Trade-Nondurable Goods 62.5 07/16/19 Blue Prism Group PLC Thoughtonomy Ltd Business Services 100.4 07/11/19 Jushi Hldg Inc Franklin Bioscience-Penn LLC Drugs 61.8 07/15/19 Natl Grid Ventures Ltd Geronimo Energy LLC Construction Firms 100.0 07/04/19 Intl Public Partnerships Ltd BeNEX GmbH Investment & Commodity Firms,Dealers,Exchanges 60.6 07/16/19 GFH Capital Ltd Tech Offices Portfolio,US Real Estate; Mortgage Bankers and Brokers 100.0 07/30/19 Investor Group Artoni Grp SpA-Transport & log Transportation and Shipping (except air) 59.0 07/04/19 Milesville Ltd Pearl Ltd Investment & Commodity Firms,Dealers,Exchanges 99.4 07/12/19 Investor Group Goldtrust Futures Co Ltd Investment & Commodity Firms,Dealers,Exchanges 57.6 07/30/19 Kyobo Life Insurance Co Ltd Saengbo Re Tr Co Ltd Investment & Commodity Firms,Dealers,Exchanges 97.9 07/16/19 Altarea SCA Woodeum Residentiel SAS Wood Products, Furniture, and Fixtures 56.3 07/16/19 Vera Bradley Inc Creative Genius Inc Miscellaneous Manufacturing 97.5 07/14/19 Bill McNee Village Walk,Melbourne,VIC Real Estate; Mortgage Bankers and Brokers 56.1 07/15/19 InvenTrust Properties Corp Southern Palm Crossing,FL Real Estate; Mortgage Bankers and Brokers 97.0 07/10/19 Main Capital Partners BV GBTEC Software & Consulting AG Prepackaged Software 56.0 07/31/19 Danfoss Power Solutions Inc UQM Technologies Inc Electronic and Electrical Equipment 96.0 07/15/19 Carousell Pte Ltd OLX Philippines Inc Miscellaneous Retail Trade 56.0 07/15/19 Halma PLC Ampac Pty Ltd Communications Equipment 93.4 07/01/19 John Wiley & Sons Inc Zyante Inc Educational Services 56.0 07/24/19 DWS Investments Australia Ltd Frasers-Undisc Cold Storage Di Transportation and Shipping (except air) 93.0 07/03/19 Fiera Capital Corp Integrated Asset Mgmt Corp Investment & Commodity Firms,Dealers,Exchanges 55.4 07/15/19 Altimmune Inc Spitfire Pharma Inc Drugs 92.7 07/15/19 Simple Energy Inc Tendril Networks Inc Prepackaged Software 53.0 07/17/19 Cromwell European REIT Sci Confluence Real Estate; Mortgage Bankers and Brokers 90.7 07/01/19 Laboratorio Reig Jofre SA Bioberica-Portfolio Drugs 52.3 07/09/19 SMART Global Holdings Inc Artesyn Embedded Tech-business Computer and Office Equipment 90.0 07/01/19 Interactive Investor Ltd Alliance Trust Savings Ltd Insurance 52.3 07/03/19 Jones Lang LaSalle Income Genesee Plaza,San Diego,CA Real Estate; Mortgage Bankers and Brokers 90.0 07/01/19 OC Spartan Acquisition Inc Milacron Hldg Corp-Uniloy Machinery 52.0 07/16/19 Reliance Brands Ltd Ludendo Enterprises Uk Ltd Miscellaneous Retail Trade 88.4 07/09/19 Tetra Tech UK Holdings Ltd WYG PLC Business Services 51.3 07/31/19 Daemyung Hotels & Resorts Co Daemyung Resort Cheonan Co Ltd Hotels and Casinos 85.6 07/25/19 China Agrotech Holdings Ltd Yu Ming Investment Management Investment & Commodity Firms,Dealers,Exchanges 51.1 07/31/19 Lagoon Water Logistics LLC Continental Resources-E Water Electric, Gas, and Water Distribution 85.0 07/03/19 Songa Bulk ASA Axxis Geo Solutions AS Business Services 50.9 07/30/19 Koito Manufacturing Co Ltd KI Hldgs Co Ltd Electronic and Electrical Equipment 83.9 07/20/19 Herambiente SPA Pistoia Ambiente SRL Sanitary Services 50.5 07/08/19 Morgan Properties Trust Exton Apartment Complex,Exton Real Estate; Mortgage Bankers and Brokers 82.0 07/24/19 Banyan Investment Group Inc Marriott & Hilton Hotel Hotels and Casinos 50.0 07/30/19 Chengyu Vanadium Titano Tech Huili Cnty Caitong Iron & Mining 81.6 07/17/19 Worldshine Bus Hldg Co Ltd Union Chuangtai Tech Co Ltd Wholesale Trade-Durable Goods 49.8 07/28/19 China Guangdong-Hong Kong Hydoo Intl Hldg Ltd Transportation and Shipping (except air) 80.7 07/01/19 Transworld Systems Inc Altisource-Portfolio Credit Institutions 49.4 07/01/19 Aterian Inv Partners III Hain Pure Protein Corp Agriculture, Forestry, and Fishing 80.0

38 Mergers & Acquisitions October 2019 TheMiddleMarket.com

038_MAJ1019 38 9/6/2019 4:31:54 PM Key Middle-Market M&A Deals Completed in July 2019

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

07/18/19 IDEX Corp Velcora Holding AB Business Services 136.7 07/11/19 Diploma PLC Virginia Sealing-Assets Rubber and Miscellaneous Plastic Products 80.0 07/26/19 M-Universe Investments Pte Ltd Memtech International Ltd Rubber and Miscellaneous Plastic Products 135.2 07/31/19 Reworld Media SA Mondadori France SAS Printing, Publishing, and Allied Services 79.9 07/31/19 Wanhua Chem (Hungary) Hldg Co Chematur Technologies AB Chemicals and Allied Products 134.4 07/30/19 Thuringer GWB Elstertal Geraer Investment & Commodity Firms,Dealers,Exchanges 79.8 07/31/19 Ceramica Urussanga SA Cecrisa Revestimentos Stone, Clay, Glass, and Concrete Products 133.5 07/01/19 StepStone GmbH AppCast Inc Prepackaged Software 79.6 07/03/19 Investor Group Unicredito Immobiliare Uno-RE Real Estate; Mortgage Bankers and Brokers 132.0 07/10/19 Dso Italia Srl Sistemia SPA Investment & Commodity Firms,Dealers,Exchanges 79.2 07/08/19 Cedar FIP Ouro Verde Locacao e Servico Repair Services 130.8 07/01/19 Arbah Capital Sauchiehall Shopping Centre Real Estate; Mortgage Bankers and Brokers 76.2 07/12/19 Investor Group Ivanhoe Cambridge-Office Bldg Real Estate; Mortgage Bankers and Brokers 127.3 07/31/19 Hangzhou Changchuan Tech Co Hangzhou Changxin Invest Mgmt Investment & Commodity Firms,Dealers,Exchanges 75.7 07/19/19 Globalworth Re Invests Ltd LC Corp SA-Office Buildings(2) Real Estate; Mortgage Bankers and Brokers 126.0 07/01/19 Eagle Natural Resources LLC Mosman Oil & Gas Ltd-Strawn Oil and Gas; Petroleum Refining 75.0 07/22/19 Investor Group 800 Brickell Office & Ret Real Estate; Mortgage Bankers and Brokers 125.5 07/26/19 Unicaja Banco SA Unicaja Banco SA-Credit Credit Institutions 74.0 07/17/19 8x8 Inc Wavecell Pte Ltd Prepackaged Software 125.0 07/31/19 BRX Transportation Holdings Pioneer Railcorp Transportation and Shipping (except air) 72.4 07/31/19 Arvida Group Ltd Sanderson Group-Retirement Vil Health Services 121.8 07/30/19 BlueGem Capital Partners LLP Pool Service Srl Soaps, Cosmetics, and Personal-Care Products 71.3 07/01/19 Exan Capital LLC 1701 Rhode Island Ave,WA DC Real Estate; Mortgage Bankers and Brokers 119.0 07/01/19 Silvercrest Asset Mgmt Grp LLC Cortina Asset Management LLC Investment & Commodity Firms,Dealers,Exchanges 71.1 07/02/19 Forus Deporte y Ocio SL Santagadea Gestion Deportva SL Amusement and Recreation Services 117.4 07/01/19 Tiarco LLC Hb Fuller-Surfactants Business Chemicals and Allied Products 71.0 07/09/19 Harbor Group International LLC The Frederick,Brooklyn,NY Real Estate; Mortgage Bankers and Brokers 117.0 07/02/19 Federal Signal Corp Mark Rite Lines Equip Co Inc Machinery 71.0 07/01/19 Casa Systems Inc Netcomm Wireless Ltd Communications Equipment 114.2 07/12/19 Fosun International Ltd Tom Tailor Holding Se Textile and Apparel Products 70.9 07/08/19 8S Capital Hldg Pte Ltd 800 Super Holdings Ltd Sanitary Services 113.8 07/02/19 Investor Group Kee Holdings Co Ltd Miscellaneous Manufacturing 70.0 07/16/19 CCP 5 LL Vision Escritorios-Office Buil Real Estate; Mortgage Bankers and Brokers 112.6 07/12/19 Link Industrial Properties Tampa Distribution Center Real Estate; Mortgage Bankers and Brokers 69.3 07/10/19 LCN Capital Partners LP Merkur trgovina doo-Retail Cen Real Estate; Mortgage Bankers and Brokers 112.1 07/01/19 Providence Equity Partners LLC Chime Communications Ltd Business Services 69.1 07/30/19 Mata Capital SAS Mercialys Sa-Monoprix Sites Retail Trade-General Merchandise and Apparel 111.4 07/10/19 Catalyst Capital Group Inc Bluberi Gaming Canada Inc Prepackaged Software 68.6 07/20/19 Upsher-Smith Laboratories Inc Promius Pharma LLC-US & Select Drugs 110.5 07/08/19 CITIC Securities Co Ltd CITIC Futures Co Ltd Investment & Commodity Firms,Dealers,Exchanges 68.0 07/29/19 Shanghai Yongdasheng Bus Jingmen Tianmao Chem Co Ltd Chemicals and Allied Products 110.3 07/01/19 German American Bancorp Inc Citizens First Corp Commercial Banks, Bank Holding Companies 67.9 07/03/19 Heimstaden AB Patrizia Immobilien-Residentia Real Estate; Mortgage Bankers and Brokers 109.9 07/19/19 DIC Asset AG Stadtfenster Property,Duisburg Real Estate; Mortgage Bankers and Brokers 65.5 07/16/19 China National Nuclear Corp Rossing Uranium Ltd Mining 106.5 07/04/19 Zhenshi Grp (HK) Heshi China Hengshi Foundation Co Textile and Apparel Products 65.4 07/31/19 MacGregor Group AB Tts Grp Asa-Marine & Offshore Machinery 106.3 07/26/19 Casino Guichard-Perrachon SA Casino Guichard-Markets(3) Retail Trade-General Merchandise and Apparel 64.6 07/04/19 Kokusai Pulp & Paper Co Ltd Spicers Ltd Wholesale Trade-Nondurable Goods 105.7 07/30/19 Shinkawa Ltd Apic Yamada Corp Electronic and Electrical Equipment 64.1 07/25/19 Chaolong Developments Pty Ltd Novotel Melbourne Glen Waverly Hotels and Casinos 104.6 07/25/19 Sucres et Denrees SA GK Trio OOO Agriculture, Forestry, and Fishing 63.8 07/09/19 Al Rayyan Tourism Investment Seba AS-JW Marriott Hotel Hotels and Casinos 104.3 07/16/19 Bufab AB HT BENDIX A/S Wholesale Trade-Durable Goods 62.8 07/19/19 Green City Dvlp Ltd Precious Palace Entrps Ltd Investment & Commodity Firms,Dealers,Exchanges 101.5 07/29/19 Cranswick PLC Katsouris Brothers Ltd Wholesale Trade-Nondurable Goods 62.5 07/16/19 Blue Prism Group PLC Thoughtonomy Ltd Business Services 100.4 07/11/19 Jushi Hldg Inc Franklin Bioscience-Penn LLC Drugs 61.8 07/15/19 Natl Grid Ventures Ltd Geronimo Energy LLC Construction Firms 100.0 07/04/19 Intl Public Partnerships Ltd BeNEX GmbH Investment & Commodity Firms,Dealers,Exchanges 60.6 07/16/19 GFH Capital Ltd Tech Offices Portfolio,US Real Estate; Mortgage Bankers and Brokers 100.0 07/30/19 Investor Group Artoni Grp SpA-Transport & log Transportation and Shipping (except air) 59.0 07/04/19 Milesville Ltd Pearl Ltd Investment & Commodity Firms,Dealers,Exchanges 99.4 07/12/19 Investor Group Goldtrust Futures Co Ltd Investment & Commodity Firms,Dealers,Exchanges 57.6 07/30/19 Kyobo Life Insurance Co Ltd Saengbo Re Tr Co Ltd Investment & Commodity Firms,Dealers,Exchanges 97.9 07/16/19 Altarea SCA Woodeum Residentiel SAS Wood Products, Furniture, and Fixtures 56.3 07/16/19 Vera Bradley Inc Creative Genius Inc Miscellaneous Manufacturing 97.5 07/14/19 Bill McNee Village Walk,Melbourne,VIC Real Estate; Mortgage Bankers and Brokers 56.1 07/15/19 InvenTrust Properties Corp Southern Palm Crossing,FL Real Estate; Mortgage Bankers and Brokers 97.0 07/10/19 Main Capital Partners BV GBTEC Software & Consulting AG Prepackaged Software 56.0 07/31/19 Danfoss Power Solutions Inc UQM Technologies Inc Electronic and Electrical Equipment 96.0 07/15/19 Carousell Pte Ltd OLX Philippines Inc Miscellaneous Retail Trade 56.0 07/15/19 Halma PLC Ampac Pty Ltd Communications Equipment 93.4 07/01/19 John Wiley & Sons Inc Zyante Inc Educational Services 56.0 07/24/19 DWS Investments Australia Ltd Frasers-Undisc Cold Storage Di Transportation and Shipping (except air) 93.0 07/03/19 Fiera Capital Corp Integrated Asset Mgmt Corp Investment & Commodity Firms,Dealers,Exchanges 55.4 07/15/19 Altimmune Inc Spitfire Pharma Inc Drugs 92.7 07/15/19 Simple Energy Inc Tendril Networks Inc Prepackaged Software 53.0 07/17/19 Cromwell European REIT Sci Confluence Real Estate; Mortgage Bankers and Brokers 90.7 07/01/19 Laboratorio Reig Jofre SA Bioberica-Portfolio Drugs 52.3 07/09/19 SMART Global Holdings Inc Artesyn Embedded Tech-business Computer and Office Equipment 90.0 07/01/19 Interactive Investor Ltd Alliance Trust Savings Ltd Insurance 52.3 07/03/19 Jones Lang LaSalle Income Genesee Plaza,San Diego,CA Real Estate; Mortgage Bankers and Brokers 90.0 07/01/19 OC Spartan Acquisition Inc Milacron Hldg Corp-Uniloy Machinery 52.0 07/16/19 Reliance Brands Ltd Ludendo Enterprises Uk Ltd Miscellaneous Retail Trade 88.4 07/09/19 Tetra Tech UK Holdings Ltd WYG PLC Business Services 51.3 07/31/19 Daemyung Hotels & Resorts Co Daemyung Resort Cheonan Co Ltd Hotels and Casinos 85.6 07/25/19 China Agrotech Holdings Ltd Yu Ming Investment Management Investment & Commodity Firms,Dealers,Exchanges 51.1 07/31/19 Lagoon Water Logistics LLC Continental Resources-E Water Electric, Gas, and Water Distribution 85.0 07/03/19 Songa Bulk ASA Axxis Geo Solutions AS Business Services 50.9 07/30/19 Koito Manufacturing Co Ltd KI Hldgs Co Ltd Electronic and Electrical Equipment 83.9 07/20/19 Herambiente SPA Pistoia Ambiente SRL Sanitary Services 50.5 07/08/19 Morgan Properties Trust Exton Apartment Complex,Exton Real Estate; Mortgage Bankers and Brokers 82.0 07/24/19 Banyan Investment Group Inc Marriott & Hilton Hotel Hotels and Casinos 50.0 07/30/19 Chengyu Vanadium Titano Tech Huili Cnty Caitong Iron & Mining 81.6 07/17/19 Worldshine Bus Hldg Co Ltd Union Chuangtai Tech Co Ltd Wholesale Trade-Durable Goods 49.8 07/28/19 China Guangdong-Hong Kong Hydoo Intl Hldg Ltd Transportation and Shipping (except air) 80.7 07/01/19 Transworld Systems Inc Altisource-Portfolio Credit Institutions 49.4 07/01/19 Aterian Inv Partners III Hain Pure Protein Corp Agriculture, Forestry, and Fishing 80.0

TheMiddleMarket.com October 2019 Mergers & Acquisitions 39

039_MAJ1019 39 9/6/2019 4:31:55 PM Key Middle-Market M&A Deals Completed in July 2019

Date Acquirer Target Target Industry Value ($mil)

07/01/19 Lotte Data Communication Co Hyundai Info & Tech Co Ltd Business Services 47.6 07/16/19 Franklin Templeton Investments Reith Lambert-Cameron Toll Real Estate; Mortgage Bankers and Brokers 47.6 07/05/19 Greentown Educ Invest Co Ltd Montessori Academy Grp Pty Social Services 47.5 07/22/19 Ayalaland Logistics Hldg Corp Unity Realty & Development Cor Real Estate; Mortgage Bankers and Brokers 46.8 07/18/19 ENAV SpA IDS-Air Navigation Prepackaged Software 46.6 07/05/19 Japan Pulp & Paper Co Ltd Radms Paper Ltd Wholesale Trade-Nondurable Goods 46.4 07/31/19 Investor Group Suzhou Yaotu Jinqu Venture Investment & Commodity Firms,Dealers,Exchanges 46.0 07/05/19 O3 Mining Inc Osisko Mining Inc-Non Core Mining 45.9 07/24/19 Cerberus Capital Management LP Metro Bank PLC-Loan Portfolio Credit Institutions 45.6 07/17/19 JY Cairns Esplanade Hotel Pty Rydges Esplanade Resort Hotels and Casinos 45.6 07/12/19 Community Bank System Inc Kinderhook Bank Corp Commercial Banks, Bank Holding Companies 45.3 07/29/19 Future PLC SmartBrief Inc Business Services 45.0 07/03/19 Suzhou High-speed Rail New Suzhou Huanxiu Lake Investment & Commodity Firms,Dealers,Exchanges 44.8 07/08/19 PMA International LLC Galfar Enrng & Cntrg I Pvt Ltd Construction Firms 44.7 07/08/19 Vectrus Systems Corp Advantor Systems Corp Business Services 44.0 07/17/19 Meruelo Media LLC Cumulus Media-KLOS-FM,CA Radio and Television Broadcasting Stations 43.0 07/04/19 Spencers Retail Ltd Natures Basket Ltd Retail Trade-Food Stores 42.8 07/31/19 Keytone Dairy Corp Ltd Omniblend Pty Ltd Food and Kindred Products 42.6 07/31/19 Nordzucker AG Mackay Sugar Ltd Food and Kindred Products 42.5 07/31/19 Quadrant Private Eqty Pty Ltd Grays (NSW) Pty Ltd Business Services 41.9 07/24/19 Jervois Mining Ltd eCobalt Solutions Inc Mining 41.2 07/30/19 Will Semiconductor Co Ltd Beijing Shixinyuan Tech Dvlp Business Services 41.2 07/15/19 Bank First National Corp Partnership Comm Banc Inc Commercial Banks, Bank Holding Companies 41.0 07/31/19 Investor Group Sierra Vista Mall & Lifestyle Real Estate; Mortgage Bankers and Brokers 41.0 07/18/19 Investor Group Tianjin Xingkuang Entrp Mgmt Business Services 40.1 07/31/19 Tbilisi Energy LLC KazTransGas-Tbilisi LLC Electric, Gas, and Water Distribution 40.0 07/18/19 JPB Raleigh Holdings LLC Northchase Executive Center,Ra Real Estate; Mortgage Bankers and Brokers 39.8 07/25/19 Kuwait Petroleum Espana SA Saras Energia SA-Fueling Stns Miscellaneous Retail Trade 39.0 07/16/19 Command Center Inc Hire Quest Holdings LLC Business Services 38.6 07/01/19 Self Storage Grp ASA Eurobox,Cron Gruppen Real Estate; Mortgage Bankers and Brokers 38.3 07/31/19 Sul America Odontologico SA Prodent Assistencia Insurance 38.0 07/25/19 Allianz Real Estate GmbH Logistics Warehouses. Italy(2) Real Estate; Mortgage Bankers and Brokers 37.4 NA Qube Logistics (Aust) Pty Ltd Chalmers Ltd Transportation and Shipping (except air) 37.3 07/12/19 2i Aeroporti SpA Aeroporto Friuli Venezia Air Transportation and Shipping 37.2 07/15/19 InvenTrust Properties Corp Shoppes at Fairview,TX Real Estate; Mortgage Bankers and Brokers 36.0 07/15/19 Galp Gas Natural Distribuicao Tagusgas Empresa de Gas Electric, Gas, and Water Distribution 35.6 07/12/19 The Supreme Cannabis Co Inc BlissCo Cannabis Corp Drugs 35.6 07/04/19 Super Group Holdings (Pty) Ltd Liebenlogistics Pty Ltd Transportation and Shipping (except air) 34.9 07/01/19 Nh Special Purpose Acq 10 Co Point Engineering Co Ltd Machinery 34.1 07/17/19 Midland States Bancorp Inc Homestar Finl Corp Commercial Banks, Bank Holding Companies 33.4 07/26/19 Investor Group Five 89 Apartments,NV Real Estate; Mortgage Bankers and Brokers 32.5 07/02/19 Gen de Galerias Comerciales Dos Mares Shopping Centre SA Real Estate; Mortgage Bankers and Brokers 32.2 07/16/19 Hendon Properties Inc Forum at Grandview,Madison,MS Real Estate; Mortgage Bankers and Brokers 31.8 07/04/19 Zenith Hope Ltd China Kangda Food Co Ltd Food and Kindred Products 30.8 07/31/19 Resources Global Veracity Consulting Grp Llc Business Services 30.6 07/01/19 Arthur Laundy Oxford Hotel,Sydney,NSW Hotels and Casinos 29.5

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 Thomson Reuters, which updates its databases continuously. We use the data available at press time. The data for this article was gathered on Aug. 23, 2019.

40 Mergers & Acquisitions October 2019

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