M&A daily wrap: American Investment Council, Mass PRIT, BluWave, TA Associates, RSM


Private equity firms lead all asset classes in long term investment performance, according to the American Investment Council’s 2018 Public Pension Study. Private equity’s 10-year annualized return of 8.6 percent surpasses public equity’s 6.1 percent, fixed income’s 5.3 percent, and real estate’s 4.7 percent, the report finds. “Our annual Public Pension Study underscores private equity’s longstanding position as an essential component in achieving public pensions’ long-term investing goals,” says AIC CEO Mike Sommers. “The financial benefits of these returns directly impact millions of dedicated American public servants, like teachers, firefighters, and police officers, who rely on their pension income in retirement.” The study names the 10 funds with the highest private equity returns. The Massachusetts Pension Reserves Investment Trust (Mass PRIT) took home the top spot, earning a 10-year annualized return of 13.37 percent. The Ohio School Employees Retirement System earned 13.1 percent, and the Utah Retirement Systems earned 12.05 percent.

Think Gartner meets Angie’s List, and there lies BluWave. The idea for BluWave grew over a 20-year span, while Sean Mooney was working in a private equity firm and started to see a void in the market as the industry became increasingly competitive. “After 2008, the competition in private equity became fierce,” Mooney says. “Every deal wasn’t a slam dunk and as time went on, private equity firms were required to do more and more for returns.” Mooney founded BluWave to help private equity firms and their portfolio companies select the best service providers. In Mergers & Acquisitions’ updated Buyer’s Guide, we profile nine categories of product and services designed to help M&A professionals perform in today’s highly competitive dealmaking arena. Read the full story: From fund administrators to VDRs, dozens of firms help M&A pros compete.

“You have to go out and make deals happen; they’re not going to occur on their own,” says TA Associates managing partner Ajit Nedungadi about the private equity firm’s focus on deal origination. Headquarterd in Boston, TA has invested about $20 billion in nearly 500 companies since the firm was founded 50 years ago in 1968. TA backs companies in five industries: technology, healthcare, financial services, business services and consumer. The firm invests in companies across North America, Europe and Asia. Nedungadi co-heads the Core Investment Committee, heads the firm’s European efforts out of London and is actively engaged in investments in India. We asked Nedungadi about TA’s investment strategy in Europe and the firm’s culture, including the focus on proprietary deal flow. Read the full story: At TA Associates, “you’re either working a live deal or hunting for the next one.”

Private equity investors are hungry for restaurants, despite intense competition and raised expectations on the part of consumers, according to consulting firm RSM. About $6.4 billion has been invested in the restaurant, hotel and leisure sector in the first quarter of 2018, compared with $30 billion for all of 2017. Tastes for healthy meals, ethnic foods and convenience, including delivery and mobile ordering, are among the main trends shaping the restaurant industry. For instance, Bain Capital Double Impact is backing vegan restaurant chain By Chloe; ButterFly Equity bought farm to table fast casual restaurant chain Modern Market; On the ethnic side, Rhone Capital paid $560 million for Brazilian steakhouse chain Fogo de Chão Inc. “As tastes and preferences continue to change, the industry will likely create a deeper divide between successful and unsuccessful restaurant operators,” the report says. “Those who respond in a timely, effective way will have more opportunity to thrive while others may struggle to survive.” For more on M&A trends in restaurants, read: What’s attracting hungry buyers to restaurants? Here are 7 trends.

More covenant-lite loans are “bleeding down” to the middle market, says Twin Brook Capital Partners co-founder Trevor Clark in this video interview, in which he discusses the downside of loosening lender protections. “There are clearly some groups out there that haven’t had as much experience lending through a credit crisis.” Twin Brook won Mergers & Acquisitions’ M&A Mid-Market Award for 2017 Lender of the Year. Also, read our Q&A: Lenders must be active partners, says Twin Brook’s Trevor Clark.

To gain insights on how lenders evaluate potential transactions in today’s highly competitive market, we asked Madison Capital Funding‘s chief underwriting officer Jennifer Cotton to share her thoughts. Cotton oversees Madison’s underwriting and portfolio management teams and serves as a member of the Investment Committee as well as the Senior Leadership team. Read the full story here: Abundance of capital drives highly competitive loan process, says Madison Capital’s chief underwriter.

European payment gateway SIA has acquired First Data’s card processing in a group of countries in Eastern Europe. The $440 million deal covers 13.3 million payment cards, 1.4 billion yearly transactions, call center services and point of sale terminals in Greece, Croatia, Czech Republic, Hungary, Romania, Serbia and Slovakia. About 1,400 First Data employees will transfer to SIA. Read the full story: First Data’s tech diversification drives European card account sale.

Many Americans will take to the road for Memorial Day weekend. The middle market is full of car deals, from self-driving technology to old school replacements parts. Intel bought Mobileye, and Delphi bought nuTonomy. Meanwhile, CenterOakPartners, Clearlake and Wabash National are scooping up makers of traditional car parts. Check out our slideshow: Car parts makers fuel M&A, as industry readies for self-driving vehicles.

Outdoor-related deals, including makers of camping equipment, are picking up as consumers plan summer vacations. Camping World Holdings Inc. (NYSE: CWH) recently agreed to acquire Cullum & Maxey Camping Center, following on the heels of buying Dixie RV Superstore. And private equity firm L2 Capital Partners formed a platform to focus on the camping sector through the investments of Insight 2 Design and Elevate LLC.

For recent deal announcements, including Kroger’s acquisition of Home Chef, see The weekly wrap: Kroger, Fifth Third, Middleby.

To see which private equity firms are raising funds, including Gryphon Partners and MSouth Equity, see PE fundraising scorecard.

Read full coverage of Mergers & Acquisitions‘ 11th annual M&A Mid-Market Award winners: Campbell Soup, Huron Capital, Idera CEO Randy Jacops, LLR Partners, McGuireWoods, Stryker, Twin Brook and William Blair.


Demitri Diakantonis

Demitri Diakantonis

Demitri Diakantonis joined SourceMedia in 2015 and serves as Managing Editor of Mergers & Acquisitions. He covers all aspects of middle-market deamaking, with a focus on strategic buyers and the consumer and retail sectors, and writes The Buyside column.


Mary Kathleen Flynn

Mary Kathleen Flynn

Mary Kathleen Flynn joined SourceMedia in 2011, serving as the Editor-in-Chief of Mergers & Acquisitions. MK oversees the brand’s content on all media platforms, including website, e-newsletters, video, slideshows, podcasts and print.