M&A wrap: Caryle, Nexstar, Tribune. GSK, Liberty Hall, LLR, Luminate


Photo credit: Bloomberg News

The Carlyle Group (Nasdaq: CG), led by co-founder David Rubenstein, has raised its second BDC, or business development company fund, TCG BDC II Inc., at $1.9 billion. BDC is part of Carlyle’s U.S. direct lending platform and lends to companies that are backed by U.S. middle-market private equity firms. Since raising its first BDC fund in 2013, Carlyle’s direct lending arm has invested more than $6.9 billion in approximately 250 transactions across 30 industries. The firm’s direct lending division is part of Carlyle’s global credit segment, which has more than $37 billion in assets as of September 30, and includes funds in loans and structured credit, direct lending, opportunistic credit, energy credit and distressed and special situations. Carlyle has been raising funds for several of its divisions including an $18.5 billion buyout fund.

Deal news
Nexstar Media Group Inc. (Nasdaq: NXST) is buying Tribune Media Co. (NYSE: TRCO) for $6.4 billion. “The transaction offers synergies related to the enhanced scale of the combined broadcast and digital media operations, and increases our audience reach by approximately 50 percent,” says Nexstar CEO Perry Sook. Debevoise is advising Tribune.

GlaxoSmithKline plc is buying Tesaro (Nasdaq: TSRO), an oncology-focused company, for $5.1 billion. Hogan Lovells is advising Tesaro.

LLR Partners has formed Celero Commerce to concentrate on investments in the payments sector. Former Anovia Payments CEO Kevin Jones is serving as Celero’s chief executive. Celero has invested in UMS Banking, a full-service merchant acquirer. LLR earned Mergers & Acquisitions’ 2017 Mid-Market M&A Award for Private Equity Firm of the Year.

Liberty Hall Capital Partners has acquired Aircraft Performance Group, a flight operations software company. CapitalValue Advisors and Rumler Tarbox Lyden advised the target. Gibson Dunn & Crutcher represented Liberty Hall. BMO Sponsor Finance and Stellus Capital provided financing.

Luminate Capital Partners has invested in AutoQuotes, a technology provider for the foodservice equipment industry. Hollie Moore Haynes, formerly of Silver Lake, is the founder and CEO of Luminate.

Union Capital Associates in Albie’s Foods Products, a food manufacturer for the education market.

People moves
Michael Belfatti was hired by Searchlight Capital Partners as a senior advisor. Belfatti was most recently the chief operating officer of Greenlight Re, a property and casualty reinsurance company.

Steven Cramer has joined Houlihan Lokey (NYSE: HLI) as a managing director where he is concentrating on M&A in the gaming sector. He was previously with Imperial Capital.

People moves: Gregg Byers joins Baird. Former DOJ attorney Katherine Forrestmoves to Cravath. Jennifer Zhao joins Genstar Capital. Check out our slideshow: 12 top dealmakers take on new jobs.

M&A trends
Valuations for North American middle-market private equity businesses is expected to remain robust heading into 2019, according to Quarton International. This is mainly thanks to the abundance of capital and the growing number of PE-backed businesses. According to Pitchbook and Quarton, there are 8,283 PE-backed companies as of September, 30, compared to 7,988 for all of 2017.

Recruiting women has become a priority at private equity firms. Within the past decade, 83 percent of private equity managers based in North America, Asia and Europe said they focused on increasing gender diversity in their front-office roles, according to new research from EY. Sixty-three percent of the firms say they want more women in middle- and back-office roles as well. Check back next month when Mergers & Acquisitions will announce the 2019 Most Influential Women in Mid-Market M&A. For last year’s list, click here. And read the full story on EY’s data from Bloomberg: Private equity firms say recruiting women is a top priority.

Featured content
Private equity firms are giving back – organizing groceries at food pantries, mentoring students in schools, running races for cancer cures and pitching in at animal shelters. In time for the holidays, Mergers & Acquisitions highlights the philanthropic and volunteering initiatives of 5 PE firms: the Carlyle Group LP (Nasdaq: CG), Frontier Capital, Huron Capital, the Riverside Co. and Star Mountain Capital. At Carlyle, charity starts at the top, with CEO David Rubenstein’s signing of The Giving Pledge, a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to philanthropy. Community involvement is more important than ever to today’s work force. Millennials, defined as people born between 1981 and 1996 by the Pew Research Center, are “for sustainability, diversity, inclusion and giving back to the community,” says Carlyle managing director Christopher Ullman. “We are finding this more and more. Yes, we are here to make money, secure retirement for pensioners, but the firm wants to support people’s efforts to make the world a better place.” Frontier Capital supports several causes, including The Miracle League, a baseball organization for people who are mentally and physically challenged. “There’s more to life than work and material things, and our people understand that,” says Frontier managing partner Andrew Lindner. At Detroit-based Huron Capital, the firm’s philanthropic efforts are focused on local groups. “We want to leave our footprint in this community where we live and work while being as helpful as possible,” says partner Gretchen Perkins. “The charitable activities we do as a group, the ability for each employee to influence where Huron’s donations go, and the ability to perform community service during work hours, or receive matching funds for an employee’s personal non-profit passion, all contribute to a portion of an employee’s sense of purpose and contributing to the greater good.” Read the full story, The Big Give.

We asked dealmakers at ACG Philadelphia’s M&A East to share their thoughts on Giving Back. Check out our video interview with Baker Tilly Capital’s Judit Nagy-Eichelber: Volunteer work brings teams together. Also watch our conversation with Reed Smith’s Jonathan Moyer: For millennial dealmakers, giving back is part of who they are.

Holiday shopping is in full swing, and the the pressure on retailers is more intense than ever. Consumers are choosing retailers that match their values. For example, Canadian retail giant Empire Company Ltd. (TSE: EMP.A) has agreed to buy fast-growing farm-to-table grocer Farm Boy for $800 million from Boston private equity firm Berkshire Partners LLC. Farm Boy offers fresh, ready-to-eat and private label offerings are particularly appealing to urban and suburban consumers. Technology is driving many of the transactions. Best Buy Co. (NYSE: BBY) recently agreed to spend $800 million to buy GreatCall, a provider of emergency response services for seniors, from Chicago private equity firm GTCR. Meanwhile, GreatCall announced a partnership with on-demand transportation provider Lyft to make it easier for seniors to get car service. “Many of the challenges that retailers are currently facing are due more to a lack of innovation and investment in technology, and that they are not able to compete with Amazon,” said Alex Monahan, a consumer products senior analyst at tax and consulting firm RSM US LLP. “Investors want to see that retailers are adjusting to consumer’s changing preferences and striving to provide seamless multi-channel experiences, while also investing in technology to address the tight labor markets.” Amazon, Walmart, Ikea, Bed, Bath & Beyond and Farm Boy are among the retailers turning to M&A. For more, see 5 trends driving retail M&A.

The Washington Redskins face the Philadelphia Eagles Monday night. The Green Bay Packers fired head coach Mike McCarthy after Sunday’s loss. Off the field, many football players invest in companies. New England Patriots quarterback Tom Brady recently teamed with former Giants defensive end Michael Strahan, who is the co-host of ABC’s Good Morning America, to launch a sports media startup called Religion of Sports Media, which has raised $3 million in venture capital funding from CourtsideVC and Advancit Capital. Muhsin Muhammad, who played wide receiver for the Carolina Panthers and the Chicago Bears, is a managing director of private equity firm Axum Capital Partners. Steve Young, former San Francisco 49ers quarterback, is a co-founder of private equity firm HGGC. View our slideshow, NFL stars Tom Brady, Michael Strahan, Steve Young go PE.

Events
ACG New York Women of Leadership Summitbrings together women in the middle-market dealmaking community for a day focused on networking and knowledge sharing on Jan. 17 at the Intercontinental Barclay Hotel. Alexa Von Tobel, chief innovation officer of Northwestern Mutual, keynotes.

Exponent Women kicks off the new year with an evening of networking on Jan. 24 at The Campbell, at New York’s Grand Central Terminal. Jazz Age financier John W. Campbell converted the space to his private office and reception hall in 1923, and it has recently been restored by design firm Ingrao Inc.


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 dealmaking, 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.