APRIL 2017 | THEMIDDLEMARKET.COM Roundtable: Lower middle market keeps up busy pace, p.29 DJ DEB SNAGS DELL’S SOFTWARE GROUP AND EARNS ONE OF THE 10TH ANNUAL MID-MARKET Dipanjan “DJ” Deb CEO, Francisco Partners AWARDS Private Equity Firm of the Year PUBLISHED IN PARTNERSHIP WITH 001_MAJ040117 1 3/8/2017 2:25:30 PM CONSISTENT EXECUTION TAKES YOU HIGHER. Side-by-side. That’s where we start and where we remain throughout the lifecycle of a transaction. For more than two decades, our innovative financing solutions, reliable deal execution and sophisticated perspective on the middle market have made all the difference. View our completed transactions at Antares.com Consistency by design. 002_MAJ0417007053_01_ANT_Sponsor_Full_Page_7875x105_v2.indd 2 1 3/7/20172/24/17 11:27:59 12:50 AM PM Contents April 2017 | Volume 52 | Number 04 Cover Story M&A Mid-Market Awards DJ Deb snags Dell’s software group and earns Private Equity Firm of the Year 16 Watercooler Roundtable 4 Earvin “Magic” Johnson 29 Lower Middle Market Keeps keynotes InterGrowth Up Busy Pace • Waiting for clarity on ACA 6 Rising interest in chemicals DATA 7 Robust M&A in 28 Mid-Market industrials Pulse: Consumer 9 SaaS deals carry on Goods and Retail Columns 44 Mid-Market 10 Private Equity Perspective: Conditions Our Redesigned Wesbite Index 12 The Buyside: 46 Dealflow Packaging Frozen Food Deals 14 Finance Finesse: Small Pond, Guest Article 42 Good Time To Buy Companies Bigger Returns Cover Photograph by GaryLaufman.com April 2017 MERGERS & ACQUISITIONS 1 001_MAJ040117_001 1 3/8/2017 2:26:46 PM Inside Word April 2017 Volume 52, Number 04 Editor-in-Chief Mary Kathleen Flynn [email protected] Assistant Managing Editor Demitri Diakantonis [email protected] Reporter Kamaron Leach [email protected] Contributing Editor Danielle Fugazy [email protected] Group Editorial Director, Banking and Capital Markets Richard Melville [email protected] VP, Capital Markets Harry Nikpour [email protected] Senior Sales Manager Richard Grant Best in Class [email protected] VP, Research Dana Jackson [email protected] ongratulations to the 2016 winners of Mergers & Acquisitions’ 10th Annual M&A VP, Content Operations and Creative Services Paul Vogel Mid-Market Awards! [email protected] C Director of Creative Operations Michael Chu Deal of the Year: ResMed Inc. (NYSE: RMD), for the $800 million purchase [email protected] Art Director Nikhil Mali of Brightree, a developer of cloud-based software to improve clinical and business [email protected] Director of Content Operations Theresa Hambel performance for post-acute-care (PAC) providers, in a deal that embodied many of the [email protected] underlying trends in the healthcare sector. Dealmaker of the Year: Gregory Sandfort, CEO of Tractor Supply Co Marketing Manager Raquel Lucas . (Nasdaq: [email protected] TSCO), for the $116 million acquisition of Petsense LLC, which allowed the largest operator of rural lifestyle stores in the U.S. to expand rapidly in the lucrative pet retail market. Private Equity Firm of the Year: Francisco Partners, for a stellar 2016, including the complex $2.4 billion purchase of Dell Inc.’s software group and the subsequent carve- CHIEF EXECUTIVE OFFICER Douglas J. Manoni outs of Quest Software and SonicWall. CHIEF FINANCIAL OFFICER Michael P. Caruso Investment Bank of the Year: Harris Wiliams & Co., for growth in all areas, CHIEF REVENUE OFFICER Marianne Collins EVP & CHIEF CONTENT OFFICER David Longobardi including deal volume and value, combined with successful leadership transition in the CHIEF PRODUCT & AUDIENCE OFFICER Minna Rhee bank’s 25th year in business. CHIEF MARKETING OFFICER Matthew Yorke Seller of the Year: the Halifax Group, for three significant and profitable exits, SVP, CONFERENCES & EVENTS John DelMauro SVP, HUMAN RESOURCES Ying Wong including the $331.4 million sale of Envision Pharma Group to Ardian, HGO Capital and Envision management. Strategic Buyer of the Year: Dover Corp. (NYSE: DOV), for spending $1.6 billion Reproduction or electronic forwarding of this product is a violation of federal copyright law! Site licenses are available -- please call Customer Service to acquire six companies, including the $780 million purchase of Wayne Fueling Systems (212) 803-8500 or [email protected] Ltd., which leverages the upgrade to chip-reading payment systems at retailers, including Mergers & Acquisitions (ISSN 0026-0010) Vol. 52 No.04, is published monthly with combined issues in July/August and November/December by gas stations, throughout the world. SourceMedia, Inc. One State Street Plaza, 27th Floor, New York, NY 10004. Law Firm of the Year: Kirkland & Ellis, for advising on a high volume of completed Telephone: (212) 803-8200. 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Mergers & Acquisitions is a registered trademark used Email me at [email protected] herein under license. Follow me on Twitter @MKFlynn © 2017 Mergers & Acquisitions and SourceMedia, Inc. All rights reserved. 2 MERGERS & ACQUISITIONS April 2017 002_MAJ040117 2 3/8/2017 2:49:30 PM An Angelo, Gordon Company Experience matters. TwinBrook Capital Partners’ senior-level team has been serving the middle market for over 20 years. We’ve established long-term relationships with over 300 PE sponsors and closed transactions with over 220 middle market PE rms. $4.5+ Billion $2.3 Billion 80 of committed capital of commitments issued to date closed transactions $61M $36M $40M Sole Lead Arranger & Sole Lead Arranger & Sole Lead Arranger & Sole Lead Arranger & Administrative Agent Administrative Agent Administrative Agent Administrative Agent Leveraged Buyout Leveraged Buyout Leveraged Buyout Leveraged Buyout FEBRUARY 2017 FEBRUARY 2017 JANUARY 2017 JANUARY 2017 $115M $62M $375M $97.5M Sole Lead Arranger & Sole Lead Arranger & Administrative Agent Sole Lead Arranger & Administrative Agent Administrative Agent Recapitalization Administrative Agent Leveraged Buyout Leveraged Buyout Add-On Acquisition DECEMBER 2016 DECEMBER 2016 DECEMBER 2016 DECEMBER 2016 $16M Administrative Agent Sole Lead Arranger & Sole Lead Arranger & Sole Lead Arranger & Leveraged Buyout Administrative Agent Administrative Agent Administrative Agent Leveraged Buyout Recapitalization Leveraged Buyout DECEMBER 2016 NOVEMBER 2016 NOVEMBER 2016 OCTOBER 2016 For a complete list of transactions, visit twincp.com. 003_MAJ0417 3 3/7/2017 11:28:11 AM Watercooler says Carter Morse & Mathias managing at Marwood Group, a healthcare- Earvin “Magic” Johnson partner Ramsey Goodrich, who chairs the focused advisory and consulting firm keynotes InterGrowth 2017 conference. headquartered in New York. Mergers “I think you’re going to he Association for Corporate see more deals coming out Growth (ACG)’s InterGrowth of InterGrowth.” Goodrich 2017 conference at the Aria Resort adds that buyers are behaving T& Casino in Las Vegas, April 24-26, offers aggressively again, with a plethora of opportunities to connect the U.S. election in the with other middle-market dealmakers and rearview mirror. Consumer a coveted chance to hear keynote speaker good and retail; healthcare; Earvin “Magic” Johnson. manufacturing; business Point guard for the Los Angeles Lakers services; and technology for 13 seasons, Johnson currently serves are among the sectors he as the team’s president of basketball anticipated will be more operations. He also serves as CEO of active. “There’s a renewed Magic Johnson Enterprises, an investment sense of pro-business optimism.” & Acquisitions spoke with Gaffin conglomerate valued at an estimated In addition