THEMIDDLEMARKET.COM MAY 2019 HEALTHCARE’S MUST-HAVE TECHNOLOGIES Dealmakers seek targets that leverage the latest in big data, artifi cial intelligence and electronic health records CV1_MAJ0519_v2.indd 1 4/4/19 5:50 PM BRIDGING THE CAPITAL GAP FOR OVER 20 YEARS 23 6 1.6 125+ 70+ YEARS IN BUSINESS INVESTMENT FUNDS BILLION OF PLATFORM INDEPENDENT SPONSOR RAISED COMMITTED CAPITAL INVESTMENTS PLATFORMS Peninsula Capital Partners provides customized debt and equity solutions to middle-market companies as either a control or non-control investor. We specialize in working with independent sponsors and directly with companies on buyout, recapitalization, growth and other leveraged capital transactions. PLEASE ALLOW US TO SHARE OUR CAPITAL STRUCTURING EXPERTISE WITH YOU — 313.237.5100 | WWW.PENINSULAFUNDS.COM PCP_001_2019_MA_v1FA.indd0C2_MAJ0519_001 2 3 4/4/20192/28/19 2:45:18 9:25 PM AM Contents May 2019 | VOL. 54 | NO. 5 Cover Story 14 5 must-have technologies for healthcare Dealmakers seek targets that leverage the latest in big data, artificial intelligence and electronic health records. Private Equity Perspective 12 Downturn may be boon for PE Investors preparing for a market shift look to increase allocations to private equity. The Buyside 13 Custom orders McDonald’s is investing in technology to keep customers flowing through drive-thrus. BLOOMBERG NEWS Watercooler Guest Articles Feature 6 30 32 HGGC sells minority stake Is your portfolio ready for digital trans- Top PE private equity firms Dyal has bought stakes in many pri- formation? Genstar Capital, Audax Group, Har- vate equity firms, which are using the Private equity firms are well advised to bourVest Partners and Stone Point funds to grow. delineate where digital and technical Capital were the four most active U.S. “debt” reside within a potential target, PE dealmakers in 2018, based on the says Saggezza CEO Arvind Kapur. number of deals completed in the U.S., 8 according to PitchBook. Why robots are attracting buyers “The U.S. market for robotics in or- 38 thopedics is growing at a very rapid Adaptive reuse appeals People Moves pace,” says Permira principal Henry Soho House’s conversion of London’s 40 Minello. Midland Bank into The Ned is a great New hires and promotions example of adaptive reuse, writes Anthony Cassano joins Ridgemont 9 Ryan Companies vice president David Equity Partners. Beth Pickens joins Dipping into Kellogg’s portfolio Wilson. TSG Consumer Partners. Carolyn Ferrero buys Famous Amos from the Wintner was hired by Charlesbank. Corn Flakes maker. TheMiddleMarket.com May 2019 Mergers & Acquisitions 1 001_MAJ0519 1 4/5/2019 1:52:41 PM Inside Word May 2019 | VOL. 54 | NO. 5 TheMiddleMarket.com 1 STATE STREET PLAZA, 27TH FLOOR NEW YORK, NY 10004-1505 • (212) 803-8200 EDITOR-IN-CHIEF High-tech healthcare Mary Kathleen Flynn MANAGING EDITOR Demitri Diakantonis CONTRIBUTING EDITORS Payment processing, big data, medical devices, RCM Keith Button, Danielle Fugazy GROUP EDITORIAL DIRECTOR, BANKING AND CAPITAL MARKETS and SaaS are driving deals Richard Melville EXECUTIVE DIRECTOR, CONTENT OPERATIONS AND CREATIVE SERVICES Michael Chu “How does a big pharmaceutical company reim- SR. ART DIRECTOR Nick Perkins burse hundreds of people for travel, or pay them for taking part in a trial?” asks Joe Manning, a partner VICE PRESIDENT, CAPITAL MARKETS Harry Nikpour (212) 803-8638 with the Riverside Co. “It used to be a manual pro- ASSOCIATE MARKETING MANAGER cess of writing checks, handing out cash gift cards, Leatha Jones or people sending in receipts and waiting for wires. It was so inefficient.” Enter Greenphire, an automated payment com- pany for the clinical trial industry that the PE firm CHIEF EXECUTIVE OFFICER ........................ Gemma Postlethwaite bought in 2014. Since the purchase, Riverside has taken the company a step CHIEF FINANCIAL OFFICER .............................................Sean Kron past automating the payment process, setting up payment systems with EVP & CHIEF CONTENT OFFICER ...................... David Longobardi global companies like Lyft to drive participants to and from clinical trials. “It’s CHIEF STRATEGY OFFICER ...........................................Jeff Mancini CHIEF DATA OFFICER ...............................................Christian Ward unmanageable to reimburse so many people. This solution makes the process SVP, CONFERENCES & EVENTS ..............................John DelMauro so much easier,” says Manning. VP, PEOPLE & CULTURE ....................................................Lee Gavin Payment processing is one of five tech- nologies driving healthcare deals that we LICENSING AND REUSE OF CONTENT: Contact our official partner, Wrights Media, about available explore in this issue’s cover story. Big data, usages, license and reprint fees, and award seal artwork at [email protected] or (877) 652-5295 for more information. Please note that Wright’s Media is the medical devices, revenue cycle manage- only authorized company that we’ve partnered with for SourceMedia materials. ment technology and Software-as-a- Service are the others. Private equity firms CUSTOMER SERVICE that invest in healthcare IT are buying [email protected] or (212) 803-8500 platform companies and closing add-on Mergers & Acquisitions Vol. 54/No. 5 (ISSN 0026-0010) is published monthly with combined issues in July/August deals, rapidly consolidating the industry. and November/December by SourceMedia, One State Street Plaza, 27th Floor, New York, NY 10004-1505. Yearly “Healthcare IT is the largest cottage subscription is $1,995; $2035 for one year in all other countries. Periodical postage paid at New York, NY and industry in the world,” says Sam Hendler, THE RIVERSIDE CO. U.S. additional mailing offices. POSTMASTER: Send address managing director at Harris Williams. “It’s changes to Mergers & Acquisitions / SourceMedia, One Joe Manning, State Street Plaza, New York, NY 10004. For subscriptions, a highly fragmented, multi-billion-dollar renewals, address changes and delivery service issues The Riverside Co. contact our Customer Service department at (212) 803- market with thousands of companies fo- 8500 or email: [email protected]. This publication is designed to provide accurate and authoritative information cused on different $250 million to $500 million sub-markets. Savvy investors regarding the subject matter covered. It is sold with see there is an opportunity to aggregate assets and build platforms of scale. the understanding that the publisher is not engaged in rendering financial, legal, accounting, tax, or other It’s an incredibly exciting time in healthcare IT.” 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 May 2019 002_MAJ0519 2 4/5/2019 1:54:48 PM Around here, guides everything we do. A leading provider in M&A escrow and paying agent services. If you’re involved in an M&A deal, you need an experienced M&A JOHN DELERAY 714.384.4154 escrow and paying agent to expedite your transaction. Look to the professionals at Wilmington Trust, and take advantage of our strong operational platform, global presence, and complete range of solutions. When serving as your escrow and paying agent, we are focused on understanding your transaction and administering its efficient LARON GALEA execution. 212.941.4427 For more insight on how we’ve successfully supported clients on mergers and acquisitions, contact one of our experienced professionals or visit wilmingtontrust.com/MandA. 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All rights reserved. 20458 190329 20458003_MAJ0519 GCM19 M&A 3 - resize.indd 1 3/29/20194/4/2019 2:12:542:45:18 PM PM What’s going on @ TheMiddleMarket.com www.themiddlemarket.com Features News Special reports Top investment banks Foot Locker buys digital startups M&A Mid-Market Awards KPMG, Houlihan Lokey, Goldman The way consumers shop continues Excelled. Innovated. Inspired. That’s Sachs, William Blair and Lincoln to change. Customers want to put what the eight winners of Mergers & International rank as the top five most their own touch on products, not wait Acquisitions’ 12th Annual M&A Mid- active M&A investment banks in 2018, too long for them and in most cases, Market Awards did in 2018. Our awards based on the volume of completed never step foot in a store to buy them. honor the leading dealmakers and private equity-backed deals, according Sneaker retailers, such as Foot Locker deals that set the standard for transac- to PitchBook. are investing in digital capabilities. tions in the middle market. 4 Mergers & Acquisitions May 2019 004_MAJ0519