M&A daily wrap: Carlyle co-CEOs, Newell, Rawlings, Seidler, Major League Baseball, Rising Stars of PE

Bloomberg News

“One of the clear challenges in the financial sector broadly is both race and gender diversity,” said Glenn Youngkin (pictured), co-CEO of the Carlyle Group LP (Nasdaq: CG), in an interview with Bloomberg Markets, the first major joint interview of Youngkin and co-CEO Kewsong Lee. “The numbers are something like 9 percent of senior executives are minorities or women,” Youngkin continued. “Carlyle, a number of years ago, began to dedicate itself to addressing this. We adopted a top-down approach, which I think was critical. We did it systematically through hiring in the entry-level and middle-level and growing talent, although we had a few notable external hires.” The interview covered many topics, including how the private equity industry has changed over the years. “Private equity is an old turn of phrase for what we are really doing,” said Lee. “Even the word ‘alternative’ in front of ‘investment’ in 20 years may no longer be there. The whole role of what we do in the global economy is only going to grow. Look at the number of IPOs that are happening now vs. 10 to 15 years ago. It’s a fraction. Who wants to be a public company these days if you can get more money from us on great terms? Do you need to go public just for a branding event? No, you can do a deal with a private equity firm. Do you need an IPO to attract management talent? In fact, we can attract better management talent.”

Time is running out to nominate candidates for Mergers & Acquisitions’ Rising Stars of Private Equity. The deadline is Fri. June 8. We’re looking for individuals who are full-time private equity investors and whose best days will be in the future. These are the folks you predict will one day play a key leadership role at your PE firm – or heading up their own. The nomination process is informal, and all decisions will be made by our editorial team, which is headed by Editor-in-Chief Mary Kathleen Flynn. Please email suggestions, questions and comments to marykathleen.flynn@sourcemedia.com. In the email subject line, please include: “Rising Stars of Private Equity Candidate” and the PE professional’s name and firm. For more details, read the full story: Who are the Rising Stars of Private Equity? Nominate candidates by June 8. And for related content, see the Most Influential Women in Mid-Market M&A, including our slideshow.

Deal developments
Newel Brands Inc. (NYSE: NWL) has agreed to sell the Rawlings sports equipment brand to Seidler Equity Partners. Major League Baseball is investing alongside Seidler. Newell expects to generate about $340 million from the sale. The divestiture is part of Newell’s accelerated transformation plan to shed noncore brands. Newell recently reached a deal to sell packager the Waddington Group to Novolex Holdings. Morgan Stanley (NYSE: MS) is advising Newell on the Rawlings sale and Bank of America Merrill Lynch is advising Seidler.

Tyson Foods Inc. (NYSE: TSN) has bought organic chicken producer Tecumseh Poultry LLC, known for its Smart Chicken brand. Tecumseh makes fresh, air-chilled, deli style chicken, along with chicken sausages. The deal is part of Tyson’s plan to focus on the company’s poultry and protein businesses. The company recently agreed to sell its Sara Lee frozen bakery division to Kohlberg & Co. D.A. Davidson & Co. advised Tecumseh.

Telehealth company Teladoc (NYSE: TDOC) has acquired Advance Medical for $352 million. Summit Partners previously owned a minority stake in the target. Advance Medical operates a network of doctors and nurses that offer virtual medical care at home and on demand.

Tech-focused private equity firm HGGC has closed the twelfth add-on acquisition for portfolio company Integrity Marketing Group, a provider of insurance products designed for senior citizens. The moves have trippled Integrity’s annual revenues and Ebitda, as well as doubling headcount since HGGC’s initial investment in July 2016. “We have worked with Integrity on everything from finding a new headquarters to consolidating back-office functions into a shared services team that can execute much more efficiently for all businesses across the platform,” said Steve Young, HGGC co-founder and managing director. “As a result, the business is running better than ever, and more and more agencies serving the senior market are calling us and asking to become a part of Integrity.” Young serves as chairman of the board of Integrity. Young is also well known for having played quarterback at the San Francisco 49ers for 13 seasons.

Vista Equity Partners has agreed to acquire a majority stake in ad tech company Integral Ad Science. The target helps businesses, such as Verizon Communications Inc. (NYSE: VZ), with their digital ad placements.

Arsenal Capital Partners has acquired Adhesives Technology Corp., an adhesives manufacturer for the construction and infrastructure industries, to create platform company Meridian Adhesives Group.

Gryphon Investors has acquired a majority stake in Shermco Industries, a provider of electrical testing, maintenance and repair services, from Oaktree Capital Management. KeyBanc Capital Markets (NYSE: KEY) and Ropes & Gray advised Gryphon. Harris & WIlliams and Kirkland & Ellis advised Shermco.

Frontier Capital has made a majority growth investment in MediaPro Holdings LLC. The target’s software allows businesses to train their employees on critical security, privacy and compliance issues.

Australis Partners has purchased a minority stake in Grupo Vitalmex SA de CV. The target is a provider of medical healthcare services to third parties in Mexico.

For more deal announcements, including acquisitions from MGM and Polaris, read the The weekly wrap: Blackstone, MGM, Polaris.

People moves
Jim Stavridis, a former 4-star admiral in the U.S. Navy, has joined Carlyle as an operating executive. He will advise the firm on geopolitical and national security issues.

Alan Halfenger was hired by regulatory advisory firm Optima Partners as a partner where he will focus on compliance needs of private equity managers, hedge funds, broker-dealers and global financial services firms. Halfenger is a former chief compliance officer at Bain Capital.

Jeff Dinerstein was hired by law firm Morgan Lewis as a partner. He focuses on M&A across the energy, chemicals, retail and healthcare sectors.

Lender views
Covenant-lite loans are “bleeding down” to the middle market, says Twin Brook Capital Partners co-founder Trevor Clark in this video interview shot at ACG InterGrowth 2018. Watch the video interview: With rise of cov-lite loans, experience matters, says Twin Brook’s Trevor Clark. Twin Brook won Mergers & Acquisitions’ M&A Mid-Market Award for 2017 Lender of the Year.

“The rise in private debt has been tremendous over the last three or four years,” says Sunil Mehta, managing director, Madison Capital Funding LLC, in this video interview shot at ACG InterGrowth 2018. Madison, a subsidiary of New York Life Insurance Co., has long been a stellar source of capital in the middle market. Watch the video: Investors from all over the globe are attracted to private debt, says Madison’s Sunil Mehta. Also, see our Q&A with Jennifer Cotton: Abundance of capital drives highly competitive loan process, says Madison Capital’s chief underwriter.

“At the end of the day, it really matters how you behave if there’s a problem,” says Karin Kovacic, managing director, East Coast region, of middle-market lender Monroe Capital. Watch our video interview, shot at ACG InterGrowth 2018:Trust counts in lending to the middle market, says Monroe Capital’s Karin Kovacic.

Featured content
“If there’s one theme we’re seeing across all of our deals, it is the digital transformation of all companies,” says Matt Conaty, director, financial sponsors, William Blair, in this video interview, shot at ACG InterGrowth 2018. William Blair won Mergers & Acquisitions’ M&A Mid-Market Award for 2017 Investment Bank of the Year. Watch the video: Digital transformation is the name of the game, says William Blair’s Matt Conaty.

With summer road trips in mind, check out our slideshow on auto deals: Car parts makers fuel M&A, as industry readies for self-driving vehicles. Highlights include: Intel bought Mobileye, and Delphi bought nuTonomy. Meanwhile, private equity firms, including Clearlake, CenterOak Partners and Wabash National, are scooping up all sorts of car-related companies from parts makers to service providers.

In our 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.

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.