LOOK TO LATIN AMERICA
Las inversiones en la región están en su punto más alto de popularidad
Michael McGuinness Jones Day
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Contents July 2015 | Volume 50 | Number 07
Looking at Latin America Investment in the region hits all-time high, prompting advisers to expand
Cover Photograph by Matt Greenslade / photo-nyc.com
5 • Organic Options Tempt Buyers • After Atari: Video Games and M&A 6 Toy Biz Deals Spike 8 3Qs W/ Jaime Wall • Robot Companies Consolidate 10 • Pet Brands Merge • Auto Snapshot 12 The M&A Scene: ACG Boston
28 Donating to Charity is a Win/Win for PE Firms 30 People Moves
14 Private Equity Perspective 15 The Buyside 16 Finance Finesse July 2015
MERGERS & ACQUISITIONS
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Inside Word July 2015 Editor-in-Chief Assistant Managing Editor Reporter Contributing Editor
Volume 50, Number 07 Mary Kathleen Flynn [email protected]
Anthony Noto [email protected]
Allison Collins [email protected]
Danielle Fugazy [email protected]
Group Editorial Director, Banking and Capital Markets Richard Melville [email protected]
VP, Capital Markets Harry Nikpour [email protected]
Richard Grant Senior Sales Manager [email protected]
In the Spotlight
Director of Research Group Creative Director
nvestment in Latin America by U.S. private equity and venture capital firms has been growing for a decade and is at an all-time high, as contributing editor Danielle Fugazy writes in this issue’s cover story, with photographs by Matt Greenslade. Investors are attracted to the region for various reasons, but mainly economic growth opportunities coupled with investor-friendly policies. Private equity and venture capital firms committed $10.39 billion to investments in Latin America in 2014, exceeding the previous record of $10.27 billion in 2011, according to the Latin American Private Equity and Venture Capital Association. Companies all over the middle market have been expanding to conduct transactions in countries including Brazil, Colombia and Mexico. Jones Day serves as a great example. The firm recently brought aboard seasoned adviser Michael McGuinness as partner. The firm’s expansion into high-growth areas, including Latin America, is one of the reasons Mergers & Acquisitions gave it our M&A Mid-Market Award for Law Firm of the Year for 2014. McGuinness brings a wealth of experience in the region. Some of the notable deals he has advised on over the years include: General Electric’s (NYSE: GE) $4.3 billion acquisition of the aviation business of Avio S.p.A.; GrupoSura’s $3.6 billion purchase of ING’s (NYSE: ING) Latin America pensions, life insurance and investment operations; and Anglo American plc’s (LON: AAL) sale of a 24.5 percent stake in Anglo American Sur, a Chilean copper mining company worth $5.4 billion, to Mitsubishi. Just prior to joining Jones Day, McGuinness headed up the Latin America practice at Shearman & Sterling. “Latin America is an important region from a long-term perspective, and it will continue to grow in importance,” McGuinness says.
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Organic Options Crucial for Hungry Buyers
hen word that Applegate Farms, an organic and natural meat distributor, was up for sale, many dealmakers anticipated a high price tag. And they were right. Swander Pace exited the Bridgewater, New Jersey-based company and earned $775 million - yet another sign that consolidation among food distributors, especially those that specialize in healthier options, shows no sign of simmering down. “If you’re a company with protein, this is a wonderful time to be a seller,” says Bill Gottschalk, senior adviser of food and beverage M&A at Mesirow Financial. Another perk, Gottschalk adds, are the company’s meat products. “The hot dogs and bacon are all organic and natural.” Hormel Foods (NYSE: HRL) caught a whiff of the Applegate auction and got in line. Before courting began for Applegate, Austin, Minnesota-based Hormel had already been starving for growth via M&A.
It spent $700 million on the Skippy peanut butter brand from consumer products giant Unilever—Mergers & Acquisitions’ 2013 Deal of the Year. In 2014, Hormel paid $450 million for CytoSport Holdings, maker of Muscle Milk and other nutritional supplements. Until Hormel’s recent slate of acquisitions, the company’s largest deal was the 2001 buyout of turkey rival the Turkey
As Video Gamers Go Mobile, M&A Ensues
Store for $334 million. However, Hormel is primarily known as the producer of Spam, canned precooked meat products. As more customers opt for healthier options and “free-from” foods - products that aren’t pumped full of artificial growth hormones, artificial dyes and other artificial ingredients - the industry is watching companies like Kellogg (NYSE: K) report a decline in profits. Recall how Golden
POLITE CONVERSATION “Invest in due diligence. Spend more time and effort thinking about alternative sources of information to get a better understanding of what’s going on in a sector. It’s about being thoughtful of where and how you get information.” —Rafi Musher, CEO of consulting firm Stax Inc.
Valley-based General Mills last year paid $820 million for Annie’s Inc., best known for its organic and natural macaroni and cheese. Hormel is no different. Realizing the urgency of diversifying its protein offerings, the company needed to embrace this new food trend and add a healthier option to its mystery meat menu. Hormel confirmed the Applegate sale in late May. Applegate, founded in 1987, is expected to have $340 million in sales in 2015 and will operate autonomously as a standalone subsidiary of Hormel. —Anthony Noto
ameStop Corp., the go-to retailer for video game consoles and accessories, recently trumped Sycamore Partners’ Hot Topic to buy Geeknet, the parent company of online shopping hub ThinkGeek. The deal allows GameStop to broaden its appeal not only to online shoppers, but beyond video games as well. ThinkGeek runs the gamut of pop-culture themed items, from comics and toys to gadgets and apparel. The transaction also helps GameStop offset any potential losses it might see as more customers opt for streaming games on their mobile devices as opposed to showing up to retail stores to make a purchase. The company is just one of many big names in the video game sector wielding M&A in this smartphone-equipped era of gamers. Sega Corp., still bruised by the financial losses incurred from the Dreamcast video game system, began providing software as a third-party developer, exiting console manufacturing completely. MERGERS & ACQUISITIONS
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The Tokyo company behind Sonic the Hedgehog has now set up shop in San Francisco and recently picked up three separate companies that specialize in mobile gaming: Ignited Artists, Space Ape Games and Demiurge Studios, which is known for its original characters and games, such as Shoot Many Robots. When a slate of companies such as these gets sold, it is indicative of how valuable their intellectual property is, as well as the team of talented gaming engineers that could join the buyer as part of an acqui-hire, says Aaron Solganick of Generation Equity Advisors LLC, a West Hollywood-based investment bank specializing in digital entertainment. Sega’s actions also underscore how enticing these companies can be to strategic buyers and private equity firms alike, while avoiding whatever pitfalls could lead to obsolescence. Atari Inc., for example, helped give birth to the modern-day videogame industry with the introduction of now-classic games such as Asteroids and Pong. However, a series of restructurings forced it to shift away
from traditional video games to licensing for titles such as RollerCoaster Tycoon. “They had one of the best brands in the entire world and they still develop games today that people don’t even think about,” Solganick says. Atari filed for Chapter 11 in 2013, saying it wanted to sell its portfolio of more than 200 vid-
MERGERS & ACQUISITIONS
eo games to a highest bidder. After little response, assets were sold off in pieces. Evergreen Group, a private equity firm, paid $1 million for the Backyard Sports title—the only valuation deemed an acceptable offer throughout the company’s bankruptcy process. “We looked at the whole component of Atari,” says Evergreen managing director Jim Wagner. “Mobile gaming is growing in double digits,” he adds. “Our thought is that the gaming industry overall is interesting and compelling.” Sega’s one-time rival, Nintendo Co. (TYO: 7974), agrees. The company recently purchased a $181 million stake in DeNA Co. Ltd. as a way to finally bring popular games such as Super Mario and Pokemon to smart phones. “Games M&A has become increasingly strategic, such as the recent Nintendo and DeNA deal combining shareholding with commercial partnership to pivot into mobile,” says Digi-Capital managing director Tim Merel. “Similarly, acquisitions to move into new game genres are on the rise,” he adds, citing the $150 million purchase of Seattle mobile games company z2 by King Digital Entertainments. Z2, backed by Madrona Venture Group, is known for Battle Nations and Metalstorm. Amazon.com Inc. (Nasdaq: AMZN) stepped up, spending $970 million purchase of Twitch Interactive, a popular Internet streaming channel for uploading and watching people play video games. Ali Baba Group Holding Ltd. (NYSE: BABA ), flush with cash following its 2014 initial public offering, is also interested
Toy Biz Deals Spike as Alex Brands Goes on a Spree
ropel Equity Partners keeps purchasing toy companies to grow portfolio company Alex Brands. The firm recently bought Juratoys, the parent company behind toy brands, Janod and Kaloo. The Orgelet, France, company will be folded into Alex Brands, which Propel acquired in 2013. Since then, the Greenwich, Connecticut-based private equity firm has scooped up other U.S. toy brands from Infinitoy Inc., as well as Summit Partners LLC and CitiBlocs. The Juratoys sale marks Propel’s first add-on acquisition for Alex Brands in Europe. The deal brings Janod’s and Kaloo’s style of games, plush products and baby gifts under the same roof as Backyard Safari, Zillionz, Covert Force, Test Pilot and Stink Bugzzz. With offices in France, the U.K., the U.S., and China, Juratoys grows Alex Brands oversea. “With the purchase of Juratoys, Alex Brands expands its consumer reach in both domestic and international markets,” says the target’s CEO Neil Friedman. “We see numerous opportunities in the European market and this is a big step towards achieving our goal of building a substantial global presence.” —Anthony Noto
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Deal Dialogue Jaime Wall
Managing director, WJ Partners
ealthier lifestyles are dominating both consumer consciousness and M&A. As far as fitness goes, that means a shift towards the specialized, especially classes. One such class – Pure Barre – recently attracted dealmaker attention. Consumer-focused private equity firm Catterton invested in the ballet-inspired exercise class in May, partnering with former majority owner WJ Partners, an investment firm, and founder, Carrie Rezabek Dorr. Pure Barre was started in 2001 by Dorr, a dancer, choreographer and fitness expert, in Birmingham, Michigan. The company became a franchisee in 2009, and attracted WJ Partners, a Spartanburg, South Carolina-based firm as an investor in 2012. The brand’s first apparel line launched in 2013, and has significant headroom to expand. Catterton, headquartered in Greenwich, Connecticut, has significant experience investing in the specialized fitness space. The PE firm is currently invested in yoga studio operator CorePower Yoga, indoor cycling brand Flywheel Sports, and women’s activewear brand Sweaty Betty. When WJ Partners bought a majority stake in Pure Barre the business had about 100 studios. By 2015, under the guidance of WJ’s husband-and-wife duo Ben and Jaime Wall, that number had tripled. Mergers & Acquisitions spoke with Jaime Wall about the trends that drove Catterton’s investment, as well as the classes themselves. What about Pure Barre brought in Catterton? Pure Barre is such a unique brand. The reasons we were attracted to it are the same reasons Catterton was attracted to it – it’s a passionate group – everyone’s in love with the Pure Barre Brand. It is more than just a physical exercise, it is a lifestyle. From everything that they wear, to the women they hang out with inside and outside of the studio. Everyone who is a franchisee has been a client. People take classes, then want to become instructors, then they want to be franchisees. What does the Catterton investment mean for Pure Barre? We will continue to grow the franchise base and we will continue to grow the product business. In September 2013 we launched our first branded Pure Barre apparel, and there is a lot of headroom left for us to expand. People always wondered if Barre was a fad, and it really turned out to be a sustainable form of exercise. What are the trends behind this deal? It’s an overall fitness industry movement towards peak fitness, and a movement from the treadmill to a great class. Pure Barre Feels like personal training, classes are around 20 people, and it’s part of a movement towards specialized fitness. Generally, people may or may not keep their gym membership, but they will spend for a class. —Allison Collins
MERGERS & ACQUISITIONS
in the video game sector. Kabam Inc., a maker of free-to-play games such as Kingdoms of Camelot, has raised more than $244 million in venture capital, including a $120 million investment from Alibaba in July 2014. The San Francisco company’s other backers include Canaan Partners, Intel Capital, Redpoint Ventures, SK Telecom Ventures, Pinnacle Ventures, Google Ventures and Performance Equity Management. Kabam, in 2014, bought Phoenix Age, a company that developed Castle Age and Underworld Empire. Other potential targets include Valve Corp. Tiny Co., Peak Games and Crytek. Corporations are managing their cost bases and looking to buy small, independent studios with unrealized hit potential. “A lot of the companies making these games are independent and VC backed,” Solganick says. “They’ll stay on for three to five years and then they’ll exit.” —Anthony Noto
As the Automation Space Grows, Deals Percolate
s the collaborative robotics industry grows at a 50 percent rate per year, acquirers find themselves in a land grab for deal opportunities. Teradyne Inc. (NYSE: TER) and Sealed Air (NYSE: SEE) are two active buyers. Teradyne recently agreed to buy Universal Robots for $285 million. The target, advised by Mooreland Partners, makes robots that work side-by-side with production workers in manufacturing facilities. Universal had a revenue increase of more than 70 percent in 2014, recording a $38 million profit. It has been backed by the Danish Growth Fund, Vækstfonden, since 2008. Vækstfonden has invested more than $2.25 billion in small and mediJuly 2015
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semiconductors, wireless products, data storage and other electronic systems. The company says Universal Robots adds an additional growth segment to its business. The purchase price could include an ad-
ditional $65 million depending on performance. Teradyne says collaborative robotics is a $100 million segment and growing at 50 percent per year. Meanwhile, Sealed Air bought Intellibot Robotics LLC, a floor cleaning robotics company, in April for an undisclosed price. The Richmond, Virginia-based target develops robotic commercial floor-cleaning machines. Charlotte, North Carolina-based Sealed Air aims to create safer supply chains. Brands include Cryovac food-packaging services, Bubble Wrap cushioning and Diversey cleaning and hygiene products. The company will add Intellibot to a division that includes floor cleaning brand Taski. —Allison Collins
Worldwise and Quaker Pet Unite As Pet Brands Continue to Consolidate
et brands have attracted dealmaker attention in recent years. Now that Worldwise and Quaker Pet Group (QPG) are merging, expect even more M&A activity on the horizon. Both companies say the merger will allow them to acquire more brands in the fragmented pet products space. Worldwise makes pet bedding, cat scratchers, cat toys and other accessories under the Petlinks, SmartyKat, TrustyPup and Kathy Ireland Loved Ones brands. QPG makes Sherpa, goDog and Hear Doggy branded dog toys and pet carriers. Worldwise, backed by New York private equity firm Mistral Equity Partners, focuses on consumer products. J.M. Smucker Co. agreed to buy Meow Mix and Milk-Bone owner Big Heart Pet Brands for
MERGERS & ACQUISITIONS
Source: Institute of Mergers, Acquisitions and Alliances
um-sized businesses since 1992. Teradyne, advised by Jones Day, supplies automatic test equipment used for
While many auto-related deals – such as Flextronics’ $508 million purchase of Mirror Controls from Dutch PE firm Egeria – continue to pop up, M&A volume in the sector for 2015 is projected to be just shy of reaching 2014 numbers, even as car sales have ticked upwards globally.
about $3.2 billion in February. Before that, in January, Whistle Labs bought Tagg, a maker of GPS trackers for pets. In July, Frontenac Co. recapitalized pet products company Cloud Star. M&A activity in the pet sector is expected to persist in the near-term, with middle market deals driven by eager, well capitalized buyers backed by a growing economy, according to a report from investment bank Capstone Advisors. While a potential interest rate hike in 2015 could drive down valuations, 2015 is expected to yield opportunities for privately held middle market companies as the M&A cycle enters a “boom” phase, during which activity – and valuation premiums – typically rise sharply. —Allison Collins
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The M&A Scene DealFest returned in June as the largest M&A block party in the Northeast. Top private equity and investment banking firms from all over New England represented the best of the local M&A community while hundreds of other middle-market professionals from all over the country gathered at the Cyclorama in Boston’s historic South End neighborhood to network and sample craft beers. Photographer: Matthew Teuten
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Private Equity Perspective Lower Middle Market Looks Good MARY KATHLEEN FLYNN
hile some signs indicate a slight slowdown in momentum, most dealmakers interviewed at ACG Boston’s DealSource Select in June said they feel very
positive about the current environment for M&A and aren’t concerned the good times will end any time soon. Those focused on the lower middle market seem especially confident.
There are a lot of things you can do with a small company even if the economy slows.
MERGERS & ACQUISITIONS
Preliminary data from Thomson Reuters showed fewer middle-market deals closed in May (108) than in April (152). Deal value was also down in May ($14 billion) from April ($18.2 billion). And, after three months of increases on our Mid-Market M&A Conditions Index (MACI), deal flow dipped slightly in May. Nevertheless, life in the lower middle market is flourishing, reports Jay Jester of Audax Private Equity, a lower middle-market firm based in Boston. The volume of logged deals at Audax began earlier in the year than usual and has continued to rise. “We saw a good March and an outstanding April, and May was possibly the best month we’ve seen since 2007,” explains Jester. And the quality of deals is high. Margins, which measure operating profitability by dividing a company’s Ebitda by total revenue, have been steadily improving since the global financial crisis, he says. Does Jester share the sense that time may be running out for this robust market, as Mergers & Acquisitions explored in our June cover story? “There are two schools of thought,” Jester
explains. “One is: It’s been a long time since we had a downturn. It’s got to end. We’re doomed. And the other is: It’s been a very gradual recovery. We probably have a lot of room left to run. The answer is probably in the middle.” An economic downturn won’t rain on the lower middle market’s parade, says Jester. “There are a lot of things
you can do with a small company, even if the economy slows a little.” Watch our video interview with Jester and others from the ACG Boston conference at www.TheMiddleMarket.com. July 2015
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The Buyside Packagers Scan the Globe for Partners ANTHONY NOTO
ompetition for targets in the food-packaging industry is intensifying, as evidenced by a string of deals including Owens-Illinois Inc.’s May purchase of
Vitro SAB’s glass container unit. In January, Rock-Tenn Co. created the world’s second-largest packaging company when it bought MeadWestvaco Corp. for $9.2 billion. Meanwhile, Cie. de Saint-Gobain SA is selling its glass packaging shop Verallia. One key aspect to this trend is that it spans overseas. Mexico, for example, hosts bottling facilities for Diageo (NYSE: DEO), Heineken and Constellation Brands (NYSE: STZ), as well as bottling for Coca-Cola (NYSE: KO) and PepsiCo (NYSE: PEP) – all customers of Owens-Illinois and Vitro. By inking a deal, both companies carve out a decent chunk of market share. There are other factors to consider as well. More deals across the packaging space show how buyers are looking to capitalize on growing commercial opportunities in both the U.S. and emerging markets, especially in Mexico. The theory is that, in foreign markets, the rate of gross domestic product growth and packaged goods consumption may be higher due to rising standards of living. There are also some very compelling global macro opportunities so far in 2015 and heading into 2016: A rising population and burgeoning middle class, for example, sparks demand for more food and
protein. Because food is a necessity, public packaging companies are also believed to be on track to outperform players in industries where there is discretionary spending, such as automotive. This trend will persist as packaging companies boost their multinational reach in Mexico and other countries where growing populations are consuming items for the first time in bulk. Like Owens-Illinois did with the Vitro deal, other companies are expected to continue expanding in different countries as well. “This transaction marks an important strategic step,” says Owens-Illinois Chairman and Chief Executive Officer Al Stroucken. “Vitro’s leading position, long-term customer relationships and proven record of innovation and new product development will enable us to capitalize on commercial opportunities in Mexico.”
Packaging companies boost their multi-national reach in countries where growing populations are consuming items in bulk.
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Finance Finesse In Frothy M&A Environment, Hold Size Matters ALLISON COLLINS
urchase prices and multiples are high and the pressure is on for buyers to move quickly to close deals. That gives some middle-market lenders – those that can
hold more on their balance sheets – an advantage over others. “Buyers want to close quickly, and that is a differentiator for them in a sale process,” says David Brackett, CEO of middle-market lender GE Antares.
Some buyers are finding they are able to buy at a slight discount based upon speed and certainty.
MERGERS & ACQUISITIONS
“We have had great success putting together programs with our strategic investors that allow us to speak to about $150 million in hold size,” Brackett says. GE Antares was put up for sale in April as part of General Electric’s (NYSE: GE) divestment of GE Capital. An alternative to using a lender with a large hold size is cobbling together a syndicate, which can potentially add time to the deal process. In the middle market, a hold size of $50 million to $75 million is considered large. “If a sponsor can club up two or three guys and get a $150 million deal done, that’s a lot better than having a bunch of guys holding $20 million,” says Jeff Day at Chicago lender Madison Capital Funding LLC. Having fewer lenders on a deal makes things simpler, because fewer parties will need to get up to speed on the deal and get credit approval, and it also makes modifications less likely, sources say.
Having just one lender and moving through a sale process fast could also give middle-market buyers a slight price discount, depending on the deal. “Purchase prices are high, and as opposed to having to pay absolute top dollar, some buyers are finding they are able to buy at a slight discount based upon speed and certainty,” says Brackett. “A long, frothy process involving many different bidders provides an opportunity for the seller to pit one against the other for a long David Brackett period of time, versus a buyer just locking up the deal and saying, ‘I’ll take this off your hands, you don’t have to worry about financing and I can close in 30 days.’” July 2015
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MERGERS & ACQUISITIONS
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uring the past 10 years, M&A activity in Latin America has pushed into the forefront. The region has seen the emergence of Latin American multinationals, home-grown private equity firms and U.S.-based private equity firms all vying for deals. Investors are attracted to the region for various reasons, but mainly economic growth opportunities coupled with investorfriendly policies. Private equity and venture capital firms committed $10.39 billion to investments in Latin America in 2014, exceeding the previous record of $10.27 billion in 2011, according to the Latin American Private Equity and Venture Capital Association. Most M&A investors in Latin America are building businesses across the region rather than in a single country. But some countries, such as Brazil, Colombia and Mexico, are garnering more interest from investors than others. Also, some specific industries, including energy, financial services, health care and telecommunications, are stealing the spotlight. “The M&A market is heating up in Latin America, and U.S. and European investors are warming up to Latin America, which is adding to the growth of its M&A market,” says Michael McGuinness, a partner in the M&A practice of Jones Day who focuses on Latin America. “It’s not the number one region in terms of M&A, but it’s an important region from a long-term perspective and it will continue to grow in importance.” Because of the impending growth of the region, Jones Day, which won the M&A Mid-Market Award for Law Firm of the Year for 2014, deepened its bench in Latin America by bringing McGuinness aboard from Shearman & Sterling LLP, where he headed up the Latin America practice. McGuinness has advised on some very significant deals in Latin America. Before Shearman & Sterling, he represented General Electric (NYSE: GE) in its $4.3 billion acquisition of the aviation business of Avio SpA; GrupoSura in its approximately $3.6 billion acquisition of ING’s (NYSE: ING) Latin America pensions, life insurance and
ATIN AMERICA Investment in the region hits all-time high, prompting advisers to expand By Danielle Fugazy
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We expect to do more energy deals between U.S. investors and Mexico.
MERGERS & ACQUISITIONS
investment operations; and Anglo American plc (LON: AAL) in its sale of a 24.5 percent stake in Anglo American Sur, a Chilean copper mining company worth $5.4 billion to Mitsubishi. Jones Day isn’t the only law firm that has seen room to grow its practices in Latin America. As a result of the increase in M&A activity, Willkie Farr & Gallagher has also expanded its Latin America presence. In 2014, the New York-based law firm placed partner Maria Ossa-Daza at the helm of the Latin American unit. She had previously represented Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) in a joint venture with Proctor & GamMaria Ossa-Daza ble Co. (NYSE: PG) to combine their over-thecounter consumer health care businesses in Latin America. Willkie Farr & Gallagher began taking Latin America more seriously when it noticed more private equity deals springing up in 2011, 2012 and 2013. The firm remains committed to the region today. “We are still very bullish on Latin America. We have opened a Houston office for our growing energy practice and we expect to do more energy deals from this office between U.S. investors and Mexico,” says Ossa-Daza. “And we continue to grow our Latin American team.” In 2015, Willkie Farr hired Andres Ordonez, a senior associate from Colombia, who will focus on M&A in Bolivia, Colombia, Ecuador and Peru. At the end of 2014, the firm added Pablo Gonzalez, a junior associate from Mexico who will work on M&A transactions in the country. Latin American companies that are trying to build their presence in the entire region, not just one country, are known as multinationals or multilatinas, and they are eagerly using M&A as
a growth strategy. For proof, look no further than transactions completed by multilatinas, including Brazil’s AB InBev’s acquisition of the remaining 49 percent stake in Mexico’s Modelo for $20 billion in 2013 and Brazil’s Oi’s acquisition of Portugal Telecom for $15 billion the same year. “The multilatinas are more important than ever before. They are active and doing deals across Latin America. They will continue to drive activity in the region,” says McGuinness. “You will continue to see this, especially in financial services as the middle class in the region emerges.” In 2011, McGuinness worked on the landmark transaction completed by multilatina Grupo de Inversiones Suramericana. Columbia-based Grupo Sura purchased ING Grope NV’s pensions, life insurance and investment management operations in multiple countries including Chile, Colombia, Mexico, Uruguay and Peru for $3.6 billion. U.S. private equity firms are also interested in taking part in the growth the region is experiencing. Bain Capital has completed two deals in Brazil. The U.S. firm, which usually looks at deals globally, became actively interested in Latin America over the last decade. “When entering new markets, we usually start by drawing upon our existing resources. Once we are familiar and confident in the deal market, we transfer people to the area, and we supplement with local talent,” says Chris Gordon, a managing director with Bain Capital. “It’s a successful model of blending.” For its first deal in Latin America, Bain Capital bought Spanish phone company Telefonica SA Atento’s call center business for $1.34 billion in 2012. Atento is the largest provider of outsourced call-center services to businesses in Latin America. In March 2014, the venerable firm made its second foray into the Latin American market. The firm purchased Brazilian health insurance operator Intermedica from its founder for approximately July 2015
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$851 million. owned by Blackstone Group, closed on a $1.8 billion fund in “We are not flying blind there. When we enter a new market, 2015 as well. we focus on sectors we know well from other experience we’ve However, it’s important to note that it’s not easy for private accumulated. For example, we previously owned call centers equity firms, especially middle-market private equity firms, to in the U.S. and Japan, and health care companies all over the complete deals in Latin America because of the strong local priworld,” says Gordon. Both deals were completed with equity vate equity industry. from Bain Capital’s existing funds. “We are looking to deploy at “There’s a local private equity industry usually playing in least $200 million, and ideally more, per transaction. A number middle market transactions, but there is definitely room for of Latin American markets are not at that scale but Brazil is. We scale foreign investors willing to put resources on the ground currently have employees in Brazil working with our portfolio and learn the market,” says Gordon. companies.” An office in the country is most likely the next step In addition to local competition, U.S. strategic acquirers for the firm, although that is not yet in the works. are also looking to grow market share by purchasing compaMany of the larger U.S.-based private equity firms are exnies in Latin America. In May, PPG Industries (NYSE: PPG) pecting to be active in the region. Boston-based Advent Interbought paint store operator Consorcio Latinoamericano for an national closed on $2.1 billion for investment in Latin America undisclosed amount. Consorcio operates a network of 57 paint at the end of 2014. Advent Latin American Private Equity Fund stores in Central America, which after the deal closes will allow VI is the largest such fund ever raised for Latin America, topping PPG to expand its operations in the area. After the transacJPMorgan (NYSE: JPM) Asset Management’s Gávea Investtion is completed, PPG will have 87 company-owned stores in ments’ $1.9 billion fund, which was raised in 2011. More than Belize, El Salvador, Guatemala, Honduras, Costa Rica, Nica60 institutional investors participated in LAPEF VI, including ragua and Panama. Pittsburgh-based PPG won Mergers & Acpublic and corporate pension funds, endowments quisitions M&A Mid-Market Strategic and foundations, funds of funds, sovereign wealth Buyer of the Year Award after making a funds, family offices and other financial instituhandful of middle-market acquisitions tions. About half the capital was raised from North in 2014, in addition to Comex, a $2.3 American investors, one-quarter from European inbillion paint purchase. vestors and the remainder from institutions in Latin Earlier this year, Owens-Illinois Inc. America, the Middle East and Asia. agreed to buy a Vitro SAB unit that makes Advent plans to use capital to invest in all of glass containers for food and beverages for Latin America, but primarily Brazil, Mexico and $2.15 billion to expand in the growing Colombia. The firm will be looking for deals in the market for food packaging in Mexico. $150 million to $250 million range. Advent has a “This transaction marks an importlong history in Latin America, having invested in ant strategic step,” said Owens-Illinois more than 50 companies across the region and fully Chairman and Chief Executive Officer exited 34 of those businesses in the past 18 years. Al Stroucken. “Vitro’s leading position, “Latin America is an important region for long-term customer relationships and Advent because it is a large, growing market proven record of innovation and new Chris Gordon with attractive dynamics including favorable product development will enable us to demographics, opportunities for productivity capitalize on commercial opportunities enhancement, fragmented industries and a high degree of in Mexico.” family ownership. We believe these dynamics create interestCertain sectors and countries are clearly more attractive than ing investment opportunities, particularly for private equity. others. Brazil, Colombia and Mexico have the most activity, but The market is also characterized by limited competition from the Pacific Alliance--Chile, Colombia, Mexico and Peru—is inother financial sponsors relative to the size of the markets,” creasingly important. Founded in 2011, the initial goal of the says Patrice Etlin, a managing partner of Advent Internationalliance was to further free trade and economic integration. The al in Sao Paulo, Brazil. four founding nations of the Pacific Alliance represent nearly 36 Sao Paulo-based Patria Investments, which is 40 percentpercent of Latin American Gross Domestic Product. July 2015
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“Brazil is going through a hard time and things have cooled a little bit. There are a lot of questions around Brazil with low growth and growing inflation, not to mention a very significant drop in commodity prices, and concern about the government’s interventionist approach,” says McGuinness. “Lots of people are wondering what the future holds, but still if you look at the numbers, 48 percent of M&A deals over $100 million were in Brazil so it’s still very important. That said, the Pacific Alliance countries are growing in importance as well.” Colombia is getting significant inbound M&A activity as well. Experts expect GDP growth to average a robust 4.4 percent from 2015 through 2019, which is creating a buzz. Additionally, the country has a good appetite for foreign investment, a sophisticated M&A investment banking market and many traditional family-owned companies that are looking for buyers. As a result, 2014 saw several transactions completed. Patrice Etlin “Colombia’s strong GDP growth and rising middle class are attracting greater attention from international investors, though the private equity market there is still developing,” says Etlin. Advent International acquired a minority stake in Colombian brokerage Alianza Valores, while financial services company Encore Capital Group financial services acquired a majority stake in another financial services company, Refinancia. Also, Luxembourg-based telecom company Millicom closed its $4.4 billion merger with local counterpart UNE EPM, which amounted to Colombia’s largest-ever telecom deal. Latin American-based private equity firms Altra, Mercantil Colpatria and SCL Energía Activa acquired a Colombian power plant from El Dorado Group, a U.S.-based infrastructure and project developer for $241 million. And despite some of the headline-making issues in Mexico, the country is becoming increasingly important to the M&A community. “Mexico has its issues. There are legal issues and growth issues, but this economy is fundamentally governed by law and we are very bullish on Mexico because there’s a lot of change that’s allowing for M&A activity,” says Bob Profusek, head of M&A at Jones Day. Mexico has done a healthy volume of M&A deals throughout 2014, but there are challenges, including lack of GDP
MERGERS & ACQUISITIONS
growth. “Mexico remains highly correlated to the U.S. market and is a more concentrated economy, but we believe private equity penetration is limited and the country’s expanding middle class and structural reforms are creating investment opportunities,” says Etlin. The telecom industry is seeing lots of activity in the country these days. The Mexican government’s crackdown on billionaire Carlos Slim’s América Móvil telecom monopoly has left room for companies to gain market share. Movil is ready to divest assets in an unprecedented step to cut its market share in Mexican telecoms to below 50 percent and escape the burden of tougher regulations. Today, the company controls about 70 percent of Mexico’s mobile market and 80 percent of the fixed-line business. Reducing Slim’s market share below 50 percent would be a win for President Enrique Peña Nieto, who pledged to boost competition in Mexico, where massive wealth is concentrated in a few hands. With all this in play, AT&T has been invading Mexico. In May 2015, the company purchased Nextel Mexico from NII Holdings for $1.9 billion. Jones Day advised NII Holdings on the sale. In January 2015 AT&T then paid $2.5 billion for Mexican mobile operator Iusacell. “The Mexican government has made it clear that it wants to promote more competition in the country and AT&T has already done two large deals there in the last six months,” says Profusek. “The reform is historic and will drive lots of M&A activity.” Energy reform is also creating M&A opportunities in Mexico. In December 2013, Mexico’s Congress approved a series of constitutional amendments that open oil and gas exploration and production to foreign investment for the first time in 75 years. By doing so, the government hopes that private investors will assist the state-owned petroleum company PEMEX to exploit future fields. The U.S. Energy Information Administration estimates that the reform could yield a potential increase of 75 percent in Mexico’s long-term oil production and open opportunities for investors in the sector. “U.S. companies are eager to do business there with this change, and a buy strategy is much more reliable than a build strategy, which will push M&A activity. I am not sure, given oil prices, that they will reap the benefits, but you will see activity. Overall, these changes let people know the country is open for business. This is good,” says McGuinness. July 2015
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100 90 80 70 60 50 40 30 20 10 0
Deal Flow Momentum Continued in May but More Slowly
n May, deal flow grew but at a slower pace than the previous three months, according to the Mid-Market M&A Conditions Index (MACI), a barometer created by Mergers & Acquisitions and sponsored by PwC. The slowdown followed three months of increases on the MACI. May yielded a Composite Score of 56.0, nearly two points lower than April’s 57.9. Leads, Signed Letters and Completed Deals all July 2015
dipped. While most survey participants remained upbeat about market conditions, some said that “deal activity has peaked.” The MACI is a diffusion index, derived from monthly surveys of approximately 250 executives. Readings above 50 indicate an expansion in M&A activity, and readings below 50 indicate a contraction. –Mary Kathleen Flynn MERGERS & ACQUISITIONS
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100 80 60 40 20 0
100 80 60 40 20 0
Less Irrational Exuberance for Financial Services M&A
ealmakers polled in May predicted that M&A in financial services, insurance and real estate (FIRE) will increase over the coming year, according to Mergers & Acquisitions’ Mid-Market Pulse (MMP). But survey participants were not as enthusiastic as they were when last polled about the sector in November, immediately following the mid-term elections. At that time, many survey participants said they believed Republican control of Congress would lessen regulation of the financial services industry, thereby boosting their hopes for the sector. In May, however, some
MERGERS & ACQUISITIONS
participants expressed concern that a slowing economy and a potential hike in interest rates would slow M&A expansion in financial services. Reflecting those concerns, the sector’s latest Composite Scores of 74.9 for the three-month outlook and 75.3 for the 12-month forecast are lower than the previous scores of 79.3 and 87.2. The MMP is a forward-looking sentiment indicator derived from monthly surveys of approximately 250 executives published in partnership with McGladrey LLP. –Mary Kathleen Flynn July 2015
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September 1st & 2nd | Cincinnati, OH The ACG Great Lakes Capital Connection (GLCC) is taking place this September at the home of the Cincinnati Reds, the Great American Ball Park. The GLCC is a dynamic networking, deal-sourcing and educational event that attracts a virtual who's who of middle market M&A professionals from across the country. It is a collaborative effort of seven ACG Chapters from the Midwest & Mid-Atlantic regions. Each year, this high-energy event brings together more than 900 M&A professionals for incredible deal sourcing opportunities, networking and insights into the biggest trends in corporate growth, finance and exits.
6/8/2015 9:41:01 AM
ALLIANCE OF MERGER & ACQUISITION ADVISORS ®
2015 SUMMER CONFERENCE
JULY 7-9, 2015 | MARRIOTT CHICAGO DOWNTOWN | CHICAGO
The 2015 AM&AA Summer Conference leads the industry in bringing together key middle-market players, speakers and some of the year’s most dynamic dealmakers. KEYNOTE SPEAKERS AM&AA is excited to welcome an influential keynote line-up to discuss key regulatory insights, and what the future holds for middle-market deals.
Chicago has a renowned history as a middle-market investment banking center. Mayor Emanuel will share insights as to what the future holds for dealmakers, not only in the Chicago area, but for the global market. Rahm Emanuel Mayor, City of Chicago
The six term Congressman and co-sponsor of the Small Business Merger, Acquisitions, Sales, & Brokerage Simplification Act, shares his thoughts on middle-market deal making. Brian Higgins Congressman, United States House of Representatives
AM&AA’s Famous Deal Bash Event – Two hours of networking led by screened middle-market intermediaries/investment bankers, all bearing deals and transaction opportunities.
Don’t miss the Alliance track focused on the M&A ecosystem of the future. These sessions provide guidance on how intermediaries and advisory firms can position private companies for maximum value and transaction readiness.
Piranha Pool – Check out AM&AA’s take on ABC’s Shark Tank. A panel of experts will critique live deal pitches from audience members. It’s an event not to be missed!
AM&AA Conferences aren’t all work and no play. Wrap up a high-energy day of learning at Chicago’s legendary House of Blues.
www.AMAASummerConference.Com | 877-844-2535
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Donating to Charity is a Win/Win for PE Firms Contributing illiquid assets gives donors tax deductions and other benefits Ryan Boland, Fidelity Charitable
The donor doesn’t incur a capital gains tax on appreciation, and is entitled to a charitable income tax deduction.
MERGERS & ACQUISITIONS
rivate equity professionals may want to fair-market value of the charitable contribution. consider a different and potentially more For the charity, the subsequent seller of the asset efficient way of donating to charity. or recipient of distributions generally does not pay Whether at their own firms or their capital gains tax. These combined tax efficiencies portfolio companies, private equity professionals can sometimes enable donors to give 20 percent embrace efficiency in all its forms. Increasingly, this to 30 percent more to charity than they could habit is carrying over to their charitable giving. have to a non-charity recipient, even in donating Both the donor and recipient the exact same asset. public charity can derive signifThe first point to remember icant tax efficiencies from the is that the assets must be donatcontribution of private equity ed outright to a public charity; interests that are often held by selling or liquidating the assets PE professionals – and, more prior to the donation would negenerally, any non-publicly tradgate the benefits. If these same ed assets. Giving these types of private business interests were assets instead of cash can significontributed to a private founcantly increase the size and imdation instead of directly to a pact of a charitable gift. public charity, the donor could Non-publicly traded assets, claim only a charitable income also known as complex or illiqtax deduction equal to the origiuid assets, that can be donated nal tax basis in the donated asset. to public charities include priBecause of these tax treatvate C corporation stock, S corment differences, many donors Ryan Boland poration stock, limited liabilwho already have formed a ity company interests, limited private foundation are choospartnership interests and real estate. ing to contribute these complex assets directly to Donating non-publicly traded assets offers a public charity. Donors who wish to have their several efficiencies and advantages. The donor charitable gift go to many charities, however, are doesn’t incur a capital gains tax on appreciation, increasingly choosing to make their contribution and the donor is entitled to a charitable income to a charity with a donor-advised fund program, tax deduction for the independently evaluated, a charitable vehicle that allows donors to make July 2015
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contr chari grant D quidi tial c to co assets must to sel accep the n must assets poten Fo equit stock ner in comp vehic and e In assets instru privat Th natin is str woul terest likely receiv tured have ty. If to a p publi fair-m ity do intere Th in a f uity have chari
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contributions to a dedicated account at a public charity, from which they may then recommend grants to many other charities. Donors should consider valuation, timing, liquidity and liability factors when weighing a potential charitable donation. Donors will usually want to contribute their most highly appreciate asset or assets. Any compliant transfer to a public charity must occur prior to any binding commitments to sell the underlying business. Charities prefer to accept assets that are likely to provide liquidity in the not-too-distant future. And the charity’s leaders must be secure in the knowledge that owning the assets will not subject them or the organization to potential financial or other types of liabilities. For the purposes of this article, the term private equity interest encompasses portfolio company stock; limited partner fund interests; general partner interests, typically formed as a limited liability company; special purpose vehicle or co-investment vehicle interests, both typically formed as LLCs; and even interests in a private equity firm. In assessing whether these types of privately held assets are suitable for charitable donation, it may be instructive to consider four scenarios for a fictional private equity firm: Kind Capital Partners, KCP. The first scenario would be considering donating an ownership interest in the firm. KCP is structured as a limited partnership. While it would probably be possible to transfer an LP interest in the firm to a public charity, it would not likely be a great asset to give or for the charity to receive. Had the private equity firm been structured as a publicly traded partnership, there may have been a great charitable planning opportunity. If a partner donates his or her private interests to a public charity before they are converted into publicly traded interests, the donor can receive a fair-market value deduction and the public charity does not pay tax when it converts the private interests into public shares. The second scenario would involve an interest in a fund operated by KCP. A typical private equity fund, formed as a limited partnership, will have an expected term of eight to 10 years. Many charities prefer not to accept an interest in an asJuly 2015
set that will not be liquid for many years, so an interest in a specific fund may not be a good asset for charitable contribution until the later stages of its expected term, perhaps in year seven, or later. The third scenario involves stock in a specific portfolio investment. If the managing directors of KCP can distribute stock of one specific company to themselves before a possible sale, that stock might make a terrific charitable contribution: providing a highly valued fair-market value deduction for the donor, and a high-liquidity asset for the charity. The fourth scenario involves interests in co-invest vehicles or special purpose vehicles. Many private equity firms form CIVs or SPVs to enable the firm’s principals, employees and investors to invest in and share more fully in the profits of select portfolio investments. The CIV or SPV is likely to own interests in a single asset. If that asset is likely to be sold in the near future, holders of CIV or SPV interests can choose to contribute some or all of the interests to charity, and obtain a fair-market value deduction. The related distribution from the CIV or SPV will flow to the charity when the asset is sold. There is a prominent industry trend toward private equity firms creating more and more CIVs to respond to investor demand. As more firms and investors own interests in these vehicles, the potential for them to fuel the philanthropy of private equity professionals becomes more significant. As CIVs and SPVs proliferate, one could envision each and every private equity liquidity event including tax-efficient charitable contributions. Already, thanks to these efficiencies – as well as the powerful spirit of philanthropy that is one of the hallmarks of the private equity space – the private equity world is making tremendous contributions to charity. As awareness of the advantages of this method of charitable donation increase, it is possible that overall giving will increase exponentially.
Many charities prefer not to accept an interest in an asset that will not be liquid for many years.
Ryan Boland is a vice president for the complex assets group at Fidelity Charitable, an independent public charity with a donor-advised fund program. MERGERS & ACQUISITIONS
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Golub, Houlihan Lokey Tap GE Capital Alum As General Electric’s (NYSE: GE) divestiture of GE Capital unfolds, some of the group’s executives are jumping ship. Other firms have already started poaching the middle-market giant’s professionals. New Yorkbased lender Golub Capital recently hired Chip Cushman as a managing director, while Houlihan Lokey brought in Patrick Schoennagal to be a director in Europe. Cushman was most recently a managing director at GE Antares, a division of GE Capital, where he worked with private equity Chip Cushman firms on lending opportunities, including first-lien, second-lien and unitranche loans. “We are looking to fill north of 10 underwriting and origination positions,” says Golub’s Andy Steuerman, head of middle-market lending at the New York firm. “It doesn’t hurt that GE Capital is up for sale. More
American International Group Inc. (NYSE: AIG)— The New York financial services company named Brian Schreiber chief strategy officer overseeing M&A. Schreiber, who started at AIG in 1997 as a portfolio manager, will also be in charge of global planning and divestitures, sharing responsibility for investor relations with chief financial officer David Herzog. The announcement comes as AIG continues to expand after years of contracting through asset sales to repay a U.S. bailout. The company inked a deal in January to buy Laya Healthcare to expand in Ireland and, in April, purchased a stake in K2 Intelligence as it seeks to offer clients protection from cyberattacks. Separately, Peter Juhas is stepping down as global head of strategy. Juhas, who joined in 2011 after previously working at Morgan Stanley, is leaving to pursue new opportunities, according to an AIG memo. Baker & McKenzie— Lee McIntyre has returned to the law firm as a partner in the Houston office. He previously worked at the firm from 2005 to 2013, when he left to lead his own boutique practice.
MERGERS & ACQUISITIONS
people are coming here.” Schoennagal was a senior vice president at GE Capital before joining Los Angeles-based investment bank Houlihan Lokey. At his new post, Schoennagal will assist private equity-backed companies in raising capital, in addition to working closely with the firm’s U.S.-based Capital Markets team on cross-border financings. Schoennagel joins Houlihan Lokey after spending roughly 10 years at GE Capital, where he most recently served as a senior vice president. General Electric (NYSE: GE) announced on April 10 Patrick Schoennagal it would sell GE Capital. Software company Splunk also hired a GE Capital veteran. Snehal Antani, left his post as GE capital’s chief technology officer to be CIO at Splunk.
Barnes & Thornburg LLP— The Los Angeles law firm has tapped entertainment attorney Carolyn Hunt to be a part of its ranks. Hunt, whose expertise includes film and television finance and distribution, joins Barnes & Thornburg as a partner. Previously, she was at Loeb & Loeb LLP. Carolyn Hunt
Blue Ridge Partners— The McLean, Virginia-based consulting firm tapped Art Chivvis and Mark Hardy as managing directors and Jim Ettamarna and Marten Leijon as principals. Prior to working at a namesake firm, New York-based Chivvis worked in JPMorgan Chase & Co.’s mergers and acquisitions department as a managing director. He was also a partner with McKinsey & Co., serving U.S. and European clients for 16 years. Hardy, based in Salt Lake City, was previously at Aurora Capital Group as a partner. Ettamarna joins as a vice president of strategy for Staples Inc. in
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Boston. Before that, he worked at Avery Dennison and McKinsey. Washington-based Leijon was chief executive of financial services firm Mix, and held leadership roles at McKinsey, ABN Amro NV and with European insurer Trygg-Hansa.
BTIG LLC— The San Francisco-based investment bank recently announced a slate of new hires. They include managing directors Charles Mather and Gene Ramirez; directors Brett Fodero and Steven Marder; and vice president Matthew McLeod. Mather, previously co-head of equity capital markets at Janney Montgomery Scott, joins BTIG’s New York headquarters with Fodero, who was previously at BMO Capital Markets. Ramirez, Marder and McLeod – each previously at Morgan Joseph TriArtisan – join the San Francisco office. Separately, Tim Chiang was brought in as a managing director and specialty pharmaceutical research analyst. Prior to joining BTIG, July 2015
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Chiang was a managing director and senior covering footwear and analyst at CRT Capital Group for five years. apparel manufacturers. He held similar positions at FTN Midwest Re- Previously, he worked search and Natexis Bleichroeder, and was part for Cohen Specialists of the specialty pharmaceutical research team as an equity specialist at Banc of America Securities and UBS Secu- on the American Stock Robert Abraham rities. The investment bank also Exchange. added Peter Saleh as a manCitizens Bank— The firm has announced aging director. He joins BTIG three new hires: director Lan Haverfield, from Telsey Advisory Group, as well as senior vice presidents Robert where he covered the restauAbraham and Lawrence Ridgway. rant sector. Earlier in his career, Haverfield has been hired as a director of originations in business capital for Citizens Saleh worked as an associate at Commercial Banking. Most recently, HaverNollenberger Capital Partners, Lan Haverfield
field was a managing director for SunTrust Banks Inc. in Dallas. Previously, he had served as a principal at Lauriat Capital, an executive vice president at CIT Group (NYSE: CIT) and an officer at Barclays plc (NYSE: BCS). Abraham has been named senior vice president of new business development. He is a former Citibank vice president and currently serves as president of the Commercial Finance Lawrence Ridgway League. Ridgway’s post will be in the the business capital division. His previous banking experience includes positions at US
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MERGERS & ACQUISITIONS
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Bank, Morgan Stanley and GE Capital. Evercore (NYSE: EVR)— Jeffrey Rosichan has joined the investment bank’s Menlo Park, California, office as a senior managing director. Rosichan was most recently managing director and vice chairman at Deutsche Bank. Prior to that, he led the U.S. equity capital markets group at Banc of America Securities. Rosichan also held a similar role at Merrill Lynch, as head of investment banking in Hong Kong. Franklin Square Capital Partners— The Philadelphia-based investment firm has hired Jim Ballan to serve as senior vice president, investor relations and capital markets. Ballan was previously vice president of investor relations at residential mortgage originator PHH Corp. as well as a sellside analyst in both credit Jim Ballan and equities at a variety of firms, including Lazard Capital Markets, JP Morgan (NYSE: JPM), Bear Stearns and CIBC Oppenheimer. Fried Frank Harris Shriver & Jacobson LLP— The New York law firm enlists Julian S.H. Chung as a partner in the finance practice. Chung represents large financial institutions and borrowers in commercial lending transactions, focusing on senior secured finance for leveraged acquisitions. Julian S.H. Chung Previously, she was a partner at Orrick Herrington & Sutcliffe LLP.
HRC Advisory— The retail advisory unit of Hilco Global recently promoted Farla Efros to president. She will continue to report to HRC CEO Antony Karabus. Efros joined HRC in January 2013 from Office Depot (Nasdaq: ODP) where she served as executive vice president and chief merchandising officer. Since then, Efros has helped HRC expand its services, which include advising retailers on how to integrate supply chain logistics.
MERGERS & ACQUISITIONS
Jackson Lewis PC— Richard Vitarelli comes aboard Jackson Lewis from McCarter & English. has over two decades of experience representing employers in all aspects of labor relations and employment law. Vitarelli previously served as outside general counsel to the Waterbury Connecticut Financial Planning and Assistance Board, a state takeover board created to restructure finances, labor agreements and post-employment benefits. He was a Commissioner of the Connecticut State Ethics Commission from 1997 to 2004 and served as Vice-Chair and Chair-Elect from 2002 to 2004. KeyBanc Capital Markets— The investment banking arm of Cleveland-based KeyCorp (NYSE: KEY) announced two hires and one promotion. Paul Griffin left his post at BMO Capital Markets to be a managing director at KeyBanc’s Boston branch. Prior to joining BMO, Griffin was at Cowen and Co. LLC. Separately, KeyBanc expanded its consumer retail segment Paul Griffin in Charlotte, North Caro-
lina, hiring Mike Jones as a managing director and promoting Brad Swanson to segment head of the consumer and retail investment banking group. Prior to joining KeyBanc, Jones was a managing director at BMO Capital Markets, while Swanson was at RBC Capital Markets. Nomad Holdings— The British Virgin Islands-based holding company appointed Stéfan Descheemaeker chief executive officer. The announcement coincides with the closing of its recently-announced acquisition of Iglo Foods Holdings. Descheemaeker will also serve as CEO of Iglo Group, replacing current CEO Elio Leoni Sceti. Descheemaeker recently served as CEO of Delhaize Group’s European division. Pacific Investment Management Co. LLC (Pimco)— Virginie Maisonneuve is leaving the Newport Beach, California investment firm. In a statement, CEO Douglas Hodge said the move is part of a larger focus in which Pimco will retreat from equities as the board of trustees plans to liquidate three funds. However, equities will continue
to be a part of Pimco’s investment services. Maisonneuve took on the role of chief investment officer for global equities just after Pimco co-founder Bill Gross was asked to leave the firm in December. She Virginie Maisonneuve was brought in by former chief executive Mohamed El-Erian. Prior to joining Pimco in 2014, Maisonneuve was head of global and international equities at Schroders plc. TrueNorth Capital Partners— Bill Jarrett has been hired as a managing director overseeing the advisory firm’s Minneapolis office. There he will provide financial services to middle-market clients and focus on expanding TrueNorth’s footprint across the Midwest. Jarrett’s past experience includes positions at Kidder Peabody, Prudential Securities, Lazard Middle Market and Quetico Partners, which he Jarrett co-founded in 2009. William Blair & Co.— The Chicago investment bank made Jonathan Skinner head of technology investment banking. He has been a partner at the firm since 2008 and will succeed Robert Metzger. Skinner joined the firm in March 2006, has led the Boston office for seven years and has been a senior member of the firm’s financial sponsors group. Winston & Strawn LLP— Bill Bowers has joined the New York law firm where he will represent underwriters, placement agents, lenders and liquidity providers in a variety of structured finance transactions in the transportation sector involving aircraft, vehicles, vessels, and railcars. In the past, Bowers served as general Bill Bowers counsel to GPA Capital in Shannon, Ireland, from 1990 to 1993. After that, he became an associate general counsel for GE Capital Aviation Services Inc. in Stamford, Connecticut, from 1993 to 1995. Since then, he has been involved in such financings for almost all U.S. major airlines. July 2015
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