JULY 2015 THEMIDDLEMARKET.

COM

LOOK
TO
LATIN
AMERICA
Las inversiones en la regin
estn en su punto ms
alto de popularidad

Michael McGuinness
Jones Day

PUBLISHED IN PARTNERSHIP WITH

001_MAJ070115 1 6/8/15 12:50 PM

001_MAJ02222222222 1 6/8/2015 9:52:20 AM
 Contents July 2015 | Volume 50 | Number 07

Cover Story

Looking at
Latin America
Investment in the
region hits all-time
high, prompting
advisers to expand

18

Watercooler 23 Mid-Market
5 Organic Options Conditions Index
Tempt Buyers
After Atari: Video 24 Mid-Market
Games and M&A Pulse: FIRE
6 Toy Biz Deals Spike
8 3Qs W/ Jaime Wall
Robot Companies Guest Article
Cover Photograph by Matt Greenslade / photo-nyc.com

Consolidate 28 Donating to Charity is a

10 Pet Brands Merge Win/Win for PE Firms
Auto Snapshot
12 The M&A Scene: 30 People Moves
ACG Boston

Columns
14 Private Equity
Perspective
15 The Buyside
16 Finance Finesse

July 2015 MERGERS & ACQUISITIONS 1

001_MAJ070115 1 6/8/15 3:39 PM

 Inside Word
July 2015 Volume 50, Number 07

Editor-in-Chief Mary Kathleen Flynn

marykathleen.flynn@sourcemedia.com
Assistant Managing Editor Anthony Noto
anthony.noto@sourcemedia.com
Reporter Allison Collins
allison.collins@sourcemedia.com
Contributing Editor Danielle Fugazy
dfugazy@fugazygroup.com

Group Editorial Director, Banking and Capital Markets Richard Melville

richard.melville@sourcemedia.com
VP, Capital Markets Harry Nikpour
harry.nikpour@sourcemedia.com
Senior Sales Manager Richard Grant
richard.grant@sourcemedia.com

In the Spotlight Director of Research Dana Jackson

dana.jackson@sourcemedia.com

Group Creative Director Hope Fitch-Mickiewicz

hope.fitchmickiewicz@sourcemedia.com

I 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 issues cover story, with photographs by Matt
Art Director

General Manager, Digital Content

Nikhil Mali
nikhil.mali@sourcemedia.com
Paul Vogel
paul.vogel@sourcemedia.com
Production Manager Maria Marcoff
Greenslade. Investors are attracted to the region for various reasons, but mainly maria.marcoff@sourcemedia.com

economic growth opportunities coupled with investor-friendly policies. Private eq- Marketing Director Jeannie Nguyen
uity and venture capital firms committed $10.39 billion to investments in Latin jeannie.nguyen@sourcemedia.com
Marketing Coordinator Ashley Tavoularis
America in 2014, exceeding the previous record of $10.27 billion in 2011, accord- ashley.tavoularis@sourcemedia.com
ing to the Latin American Private Equity and Venture Capital Association.
Companies all over the middle market have been expanding to conduct trans-
actions 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 firms expansion into CHIEF EXECUTIVE OFFICER Douglas J. Manoni
high-growth areas, including Latin America, is one CHIEF FINANCIAL OFFICER Michael P. Caruso
CHIEF REVENUE OFFICER Marianne Collins
of the reasons Mergers & Acquisitions gave it our
EVP AND CHIEF CONTENT OFFICER David Longobardi
M&A Mid-Market Award for Law Firm of the Year CHIEF MARKETING AND DIGITAL OFFICER Minna Rhee
for 2014. SVP, CONFERENCES & EVENTS John DelMauro
McGuinness brings a wealth of experience in the SVP, HUMAN RESOURCES Ying Wong

region. Some of the notable deals he has advised on
over the years include: General Electrics (NYSE:
GE) $4.3 billion acquisition of the aviation business
of Avio S.p.A.; GrupoSuras $3.6 billion purchase of
INGs (NYSE: ING) Latin America pensions, life
insurance and investment operations; and Anglo American plcs (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.
Mary Kathleen Flynn
Editor-in-Chief
Mergers & Acquisitions | TheMiddleMarket.com
Email me at marykathleen.flynn@sourcemedia.com
Follow me on Twitter @MKFlynn
2 MERGERS & ACQUISITIONS
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2015 Mergers & Acquisitions and SourceMedia, Inc. All rights reserved.
July 2015

002_MAJ070115 2 6/8/15 5:51 PM

 has sold has sold has sold

has acquired a division of

to to to

and management

has sold has sold

have formed has acquired

to to

has sold

has acquired has been sold to has acquired

to

001_MAJ003 1 6/8/2015 9:51:39 AM

 Whats going on @

TheMiddleMarket.com

> Todays Transactions > People Database

Stay on top of mid-market Search profiles of various
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Game Stops Jeffrey Peek, vice
outbidding chair at Bank of
Hot Topic for America Merrill
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of online retailer
ThinkGeek

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004_MAJ070115 4 6/8/15 3:39 PM


Organic Options Crucial
for Hungry Buyers
W
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 an-
other sign that consol-
idation among food
distributors, especial-
ly those that specialize
in healthier options,
shows no sign of sim-
mering down.
If youre a compa-
ny with protein, this
is a wonderful time
to be a seller, says Bill
Gottschalk, senior ad-
viser of food and beverage M&A at Me-
sirow Financial. Another perk, Gottschalk
adds, are the companys 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 al-
ready been starving for growth via M&A.
POLITE CONVERSATION
Invest in due diligence. Spend more time and
effort thinking about alternative sources of informa-
tion to get a better understanding of whats going
on in a sector. Its about being thoughtful of where
and how you get information.
July 2015
005_MAJ070115 5
It spent $700 million on the Skippy pea-
nut butter brand from consumer products
giant UnileverMergers & Acquisitions
2013 Deal of the Year.
In 2014, Hormel paid $450 million
for CytoSport Holdings, maker of Muscle
Milk and other nutritional supplements.
Until Hormels recent slate of acquisi-
tions, the companys largest deal was the
2001 buyout of turkey rival the Turkey
Store for $334 million. However, Horm-
el is primarily known as the producer of
Spam, canned precooked meat products.
As more customers opt for healthier op-
tions and free-from foods - products
that arent pumped full of artificial growth
hormones, artificial dyes and other artifi-
cial ingredients - the industry is watching
companies like Kellogg (NYSE: K) report
a decline in profits. Recall how Golden
Rafi Musher, CEO of consulting firm Stax Inc.
Watercooler
Valley-based General Mills last year paid
$820 million for Annies Inc., best known
for its organic and natural macaroni and
cheese.
Hormel is no different. Realizing the
urgency of diversifying its protein offer-
ings, 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
As Video Gamers Go
Mobile, M&A Ensues
G
ameStop Corp., the go-to retail-
er 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 al-
lows 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 pur-
chase. The company is just one of many
big names in the video game sector wield-
ing M&A in this smartphone-equipped
era of gamers.
Sega Corp., still bruised by the finan-
cial losses incurred from the Dreamcast
video game system, began providing soft-
ware as a third-party developer, exiting
console manufacturing completely.
MERGERS & ACQUISITIONS 5
6/8/15 4:11 PM
 Watercooler
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 mo-
bile 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 en-
gineers 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 spe-
cializing in digital entertainment.
Segas actions also underscore how en-
ticing these companies can be to strate-
gic buyers and private equity firms alike,
while avoiding whatever pitfalls could
lead to obsolescence. Atari Inc., for ex-
ample, helped give birth to the mod-
ern-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 licens-
ing for titles such as RollerCoaster Ty-
coon. They had one of the best brands
in the entire world and they still devel-
op games today that people dont even
think about, Solganick says. Atari filed
for Chapter 11 in 2013, saying it wanted
to sell its portfolio of more than 200 vid-
6 MERGERS & ACQUISITIONS
006_MAJ070115 6
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
titlethe only valuation deemed an ac-
ceptable offer throughout the companys
bankruptcy process. We looked at the
whole component of Atari, says Ever-
green 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.
Segas one-time rival, Nintendo Co.
(TYO: 7974), agrees. The company re-
cently purchased a $181 million stake
in DeNA Co. Ltd. as a way to final-
ly bring popular games such as Super
Mario and Pokemon to smart phones.
Games M&A has become in-
creasingly strategic, such as the re-
cent Nintendo and DeNA deal com-
bining shareholding with commercial
partnership to pivot into mobile, says Di-
gi-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 mo-
bile games company z2
by King Digital Enter-
tainments. 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 vid-
eo 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
P
ropel Equity Partners keeps
purchasing toy companies to
grow portfolio company Alex
Brands.
The firm recently bought Jur-
atoys, 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 Propels
first add-on acquisition for Alex
Brands in Europe.
The deal brings Janods and Ka-
loos 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 inter-
national markets, says the targets
CEO Neil Friedman.
We see numerous opportuni-
ties in the European market and
this is a big step towards achieving
our goal of building a substantial
global presence.
Anthony Noto
July 2015
6/8/15 4:11 PM
 April 2015

$347,500,000

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Is pleased to announce the closing of

SFW Capital Partners Fund II, LP

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A partnership formed to invest in middle market businesses

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This announcement appears as a matter of record only

001_MAJ007 1 6/8/2015 9:52:46 AM

 Watercooler

Deal Dialogue in the video game sector. Kabam Inc., a

Jaime Wall maker of free-to-play games such as King-
doms of Camelot, has raised more than
Managing director, WJ Partners $244 million in venture capital, including

H
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 atten-
tion. Consumer-focused private equity firm Catterton invested in the ballet-in-
spired 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 danc-
er, 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 inves-
tor in 2012. The brands 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 womens 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 WJs husband-and-wife duo Ben and Jaime Wall, that num-
ber had tripled. Mergers & Acquisitions spoke with Jaime Wall about the trends that
drove Cattertons investment, as well as the classes themselves.
a $120 million investment from Alibaba
in July 2014. The San Francisco compa-
nys other backers include Canaan Part-
ners, 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 bas-
es and looking to buy small, independent
studios with unrealized hit potential. A
lot of the companies making these games
are independent and VC backed, Solgan-
ick says. Theyll stay on for three to five
years and then theyll exit.
Anthony Noto

What about Pure Barre brought in Catterton?

Pure Barre is such a unique brand. The reasons we were attracted to it are the As the Automation Space
same reasons Catterton was attracted to it its a passionate group everyones in
love with the Pure Barre Brand. It is more than just a physical exercise, it is a lifestyle.
Grows, Deals Percolate

A
From everything that they wear, to the women they hang out with inside and out- s the collaborative robotics indus-
side of the studio. Everyone who is a franchisee has been a client. People take classes, try grows at a 50 percent rate per
then want to become instructors, then they want to be franchisees. year, acquirers find themselves in a
land grab for deal opportunities.
What does the Catterton investment mean for Pure Barre? Teradyne Inc. (NYSE: TER) and
We will continue to grow the franchise base and we will continue to grow the Sealed Air (NYSE: SEE) are two active
product business. In September 2013 we launched our first branded Pure Barre ap- buyers. Teradyne recently agreed to buy
parel, and there is a lot of headroom left for us to expand. People always wondered if Universal Robots for $285 million.
Barre was a fad, and it really turned out to be a sustainable form of exercise. The target, advised by Mooreland Part-
ners, makes robots that work side-by-side
What are the trends behind this deal? with production workers in manufacturing
Its an overall fitness industry movement towards peak fitness, and a movement facilities. Universal had a revenue increase
from the treadmill to a great class. Pure Barre Feels like personal training, classes are of more than 70 percent in 2014, recording
around 20 people, and its part of a movement towards specialized fitness. Generally, a $38 million profit. It has been backed
people may or may not keep their gym membership, but they will spend for a class. by the Danish Growth Fund, Vkstfond-
Allison Collins en, since 2008. Vkstfonden has invested
more than $2.25 billion in small and medi-

8 MERGERS & ACQUISITIONS July 2015

008_MAJ070115 8 6/8/15 4:11 PM

001_MAJ009 1 6/8/2015 9:49:43 AM
 Watercooler
um-sized businesses since 1992.
Teradyne, advised by Jones Day, sup-
plies automatic test equipment used for
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-
Worldwise and Quaker Pet Unite As
Pet Brands Continue to Consolidate
P
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 al-
low 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, focus-
es on consumer products. J.M. Smucker Co. agreed to buy
Meow Mix and Milk-Bone owner Big Heart Pet Brands for
10 MERGERS & ACQUISITIONS
010_MAJ070115 10
Hatchback
Snapshot
ditional $65 million depending on perfor-
estimated
mance. Teradyne says collaborative robot-
ics is a $100 million segment and growing
Source: Institute of Mergers, Acquisitions and Alliances
at 50 percent per year.
Meanwhile, Sealed Air
bought Intellibot Robotics
LLC, a floor cleaning robot-
ics company, in April for an
undisclosed price. The Rich-
mond, Virginia-based target
develops robotic commercial
floor-cleaning machines. Number Value
Charlotte, North Caroli-
na-based Sealed Air aims to cre- While many auto-related deals such
ate safer supply chains. Brands as Flextronics $508 million purchase
include Cryovac food-packag- of Mirror Controls from Dutch PE
ing services, Bubble Wrap cushioning and firm Egeria continue to pop up,
Diversey cleaning and hygiene products. M&A volume in the sector for 2015
The company will add Intellibot to a di- is projected to be just shy of reaching
vision that includes floor cleaning brand 2014 numbers, even as car sales have
Taski. ticked upwards globally.
Allison Collins
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 cap-
italized buyers backed by a growing economy, according to a
report from investment
bank Capstone Advisors.
While a potential in-
terest rate hike in 2015
could drive down valu-
ations, 2015 is expected
to yield opportunities
for privately held mid-
dle market companies as
the M&A cycle enters a
boom phase, during
which activity and val-
uation premiums typically rise sharply.
Allison Collins
July 2015
6/8/15 4:11 PM
 Top Flight EW LLC, wants to go public right away
and are seeking * Mergers and Acquisitions
Investments Banks; along with Securities and
Capital Markets Law Firms with a great track record
of successfully raising * $5,000,000,000 five billion
dollars or more for public com-
panies as well as Entertainment
Companies, Mining Companies
and Real Estate Companies that
are private startup companies in
the process of going public thru
a reverse merger with currently
reporting, and currently trading
OTC public shell companies
after the reverse mergers are
completed.

PLEASE CONTACT:
Mr. Joseph | Top Flight EW
at 404-917-7308 or www.topflightew.webs.com

001_MAJ011 1 6/8/2015 9:45:14 AM

Untitled-2 1 6/2/15 2:49 PM

 Watercooler

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 oth-
er middle-market professionals from all over the country
gathered at the Cyclorama in Bostons historic South End
neighborhood to network and sample craft beers.
Photographer: Matthew Teuten

12 MERGERS & ACQUISITIONS July 2015

012_MAJ070115 12 6/8/15 4:11 PM

001_MAJ013 1 6/8/2015 9:51:04 AM
 Columns

Private Equity Perspective

Lower Middle Market Looks Good

MARY KATHLEEN FLYNN

W hile some signs indicate a slight slowdown in momentum, most dealmakers

interviewed at ACG Bostons DealSource Select in June said they feel very
positive about the current environment for M&A and arent concerned the good
times will end any time soon. Those focused on the lower middle market seem
especially confident.

Preliminary data from Thomson Reuters explains. One is: Its been a long time since we
showed fewer middle-market deals closed in May had a downturn. Its got to end. Were doomed.
(108) than in April (152). Deal value was also And the other is: Its been a very gradual recovery.
down in May ($14 billion) from April ($18.2 bil- We probably have a lot of room left to run. The
lion). And, after three months of increases on our answer is probably in the middle. An economic
There are Mid-Market M&A Conditions Index (MACI), downturn wont rain on the lower middle mar-
a lot of deal flow dipped slightly in May. kets parade, says Jester. There are a lot of things
things you Nevertheless, life in the lower middle
market is flourishing, reports Jay Jester of
can do Audax Private Equity, a lower middle-mar-
with a ket firm based in Boston. The volume of
logged deals at Audax began earlier in the
small year than usual and has continued to rise.
company We saw a good March and an outstand-
even if ing April, and May was possibly the best
month weve seen since 2007, explains
the Jester. And the quality of deals is high.
economy Margins, which measure operating profit-
slows. ability by dividing a companys Ebitda by

total revenue, have been steadily improv-
ing 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 sto-
ry? There are two schools of thought, Jester
you can do with a small company, even if the
economy slows a little. Watch our video inter-
view with Jester and others from the ACG Boston
conference at www.TheMiddleMarket.com.

14 MERGERS & ACQUISITIONS July 2015

014_MAJ070115 14 6/8/15 2:51 PM

 Columns

The Buyside
Packagers Scan the Globe for Partners

ANTHONY NOTO

C ompetition for targets in the food-packaging industry is intensifying, as ev-

idenced by a string of deals including Owens-Illinois Inc.s May purchase of
Vitro SABs glass container unit. In January, Rock-Tenn Co. created the worlds sec-
ond-largest packaging company when it bought MeadWestvaco Corp. for $9.2 bil-
lion. Meanwhile, Cie. de Saint-Gobain SA is selling its glass packaging shop Verallia.

One key aspect to this trend is that it spans protein. Because food is a necessity, public pack-
overseas. Mexico, for example, hosts bottling fa- aging companies are also believed to be on track
cilities for Diageo (NYSE: DEO), Heineken and to outperform players in industries where there is
Constellation Brands (NYSE: STZ), as well as discretionary spending, such as automotive.
bottling for Coca-Cola (NYSE: KO) and PepsiCo This trend will persist as packaging companies
(NYSE: PEP) all customers of Owens-Illinois boost their multinational reach in Mexico and Packaging
and Vitro. By inking a deal, both companies carve other countries where growing populations are companies
out a decent chunk of market share. consuming items for the first time in bulk. Like boost their
There are other factors to consider as well. Owens-Illinois did with the Vitro deal, other
More deals across the packaging space show how companies are expected to continue expanding in multi-national
buyers are looking to capitalize on growing com- different countries as well. reach in
mercial opportunities in both This transac-
the U.S. and emerging mar- tion marks an im-
countries
kets, especially in Mexico. The portant strategic where growing
theory is that, in foreign mar- step, says Ow- populations
kets, the rate of gross domestic ens-Illinois Chair-
product growth and packaged man and Chief Ex- are consuming
goods consumption may be ecutive Officer Al items in bulk.

higher due to rising standards Stroucken. Vitros
of living. leading position,
There are also some very long-term custom-
compelling global macro op- er relationships and
portunities so far in 2015 and heading into 2016: proven record of innovation and new product
A rising population and burgeoning middle class, development will enable us to capitalize on com-
for example, sparks demand for more food and mercial opportunities in Mexico.

July 2015 MERGERS & ACQUISITIONS 15

015_MAJ070115 15 6/8/15 9:37 AM

 Columns

Finance Finesse
In Frothy M&A Environment, Hold
Size Matters
ALLISON COLLINS

P 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.

We have had great success putting together Having just one lender and moving through
programs with our strategic investors that allow a sale process fast could also give middle-market
us to speak to about $150 million in hold size, buyers a slight price discount, depending on the
Brackett says. GE Antares was put up for sale in deal.
April as part of General Electrics (NYSE: GE) di- Purchase prices are high, and as opposed to
Some buyers vestment of GE Capital. having to pay absolute top dollar, some buyers
are finding they An alternative to using a lender with a large are finding they are able to buy at a slight dis-
are able to hold size is cobbling together a count based
syndicate, which can potentially upon speed and
buy at a slight add time to the deal process. In certainty, says
discount based the middle market, a hold size Brackett.
of $50 million to $75 million is A long,
upon speed considered large. frothy process
and certainty. If a sponsor can club up two involving many

or three guys and get a $150 different bid-
million deal done, thats a lot ders provides an
better than having a bunch of opportunity for
guys holding $20 million, says the seller to pit
Jeff Day at Chicago lender Mad- one against the
ison Capital Funding LLC. other for a long
Having fewer lenders on a David Brackett period of time,
deal makes things simpler, be- versus a buyer
cause fewer parties will need to get up to speed on just locking up the deal and saying, Ill take this
the deal and get credit approval, and it also makes off your hands, you dont have to worry about fi-
modifications less likely, sources say. nancing and I can close in 30 days.

16 MERGERS & ACQUISITIONS July 2015

016_MAJ070115 16 6/8/15 5:00 PM

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 Cover Story

LOOK TO
LATI
Photograph by Matt Greenslade / photo-nyc.com

Michael McGuinness
Jones Day

18 MERGERS & ACQUISITIONS July 2015 July 2

018_MAJ070115 18 6/5/15 7:15 PM

 D
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 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.
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. Its not the number one region in
terms of M&A, but its 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

K TO
the aviation business of Avio SpA; GrupoSura in its approximately $3.6 billion
acquisition of INGs (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
2015 July 2015 MERGERS & ACQUISITIONS 19

019_MAJ070115 19 6/5/15 7:15 PM

 Cover Story

investment operations; and Anglo American plc a growth strategy. $851

(LON: AAL) in its sale of a 24.5 percent stake For proof, look no further than transactions W
in Anglo American Sur, a Chilean copper mining completed by multilatinas, including Brazils AB we fo
company worth $5.4 billion to Mitsubishi. InBevs acquisition of the remaining 49 percent accum

Jones Day isnt the only law firm that has seen stake in Mexicos Modelo for $20 billion in 2013 in th
room to grow its practices in Latin America. As a and Brazils Ois acquisition of Portugal Telecom world
result of the increase in for $15 billion the same year. from
M&A activity, Willkie The multilatinas are more import- least
Farr & Gallagher has ant than ever before. They are active of La
We expect also expanded its Lat- and doing deals across Latin America. curre
to do more in America presence. They will continue to drive activity in comp
In 2014, the New the region, says McGuinness. You for th
energy deals York-based law firm will continue to see this, especially in M
between placed partner Maria financial services as the middle class in pecti
U.S. investors Ossa-Daza at the helm the region emerges. natio
of the Latin American In 2011, McGuinness worked on at the
and Mexico.

unit. She had previ- the landmark transaction completed VI is
ously represented Teva by multilatina Grupo de Inversiones JPMo
Pharmaceutical Indus- Suramericana. Columbia-based Gru- ment
tries Ltd. (NYSE:TE- po Sura purchased ING Grope NVs 60 in
VA) in a joint venture pensions, life insurance and invest- publi
with Proctor & Gam- ment management operations in mul- and f
ble Co. (NYSE: PG) to Maria Ossa-Daza tiple countries including Chile, Co- funds
combine their over-the- lombia, Mexico, Uruguay and Peru tions
counter consumer health care businesses in Latin for $3.6 billion. Amer
America. U.S. private equity firms are also interested vesto
Willkie Farr & Gallagher began taking Latin in taking part in the growth the region is expe- Amer
America more seriously when it noticed more pri- riencing. Bain Capital has completed two deals A
vate equity deals springing up in 2011, 2012 and in Brazil. The U.S. firm, which usually looks at Latin
2013. The firm remains committed to the region deals globally, became actively interested in Lat- Colo
today. We are still very bullish on Latin America. in America over the last decade. When entering $150
We have opened a Houston office for our growing new markets, we usually start by drawing upon long
energy practice and we expect to do more energy our existing resources. Once we are familiar and more
deals from this office between U.S. investors and confident in the deal market, we transfer people exited
Mexico, says Ossa-Daza. And we continue to to the area, and we supplement with local talent, L
grow our Latin American team. says Chris Gordon, a managing director with Bain Adve
In 2015, Willkie Farr hired Andres Ordonez, Capital. Its a successful model of blending. with
a senior associate from Colombia, who will focus For its first deal in Latin America, Bain Capi- demo
on M&A in Bolivia, Colombia, Ecuador and tal bought Spanish phone company Telefonica SA enha
Peru. At the end of 2014, the firm added Pablo Atentos call center business for $1.34 billion in famil
Gonzalez, a junior associate from Mexico who 2012. Atento is the largest provider of outsourced ing i
will work on M&A transactions in the country. call-center services to businesses in Latin America. The m
Latin American companies that are trying In March 2014, the venerable firm made its other
to build their presence in the entire region, not second foray into the Latin American market. The says P
just one country, are known as multinationals or firm purchased Brazilian health insurance operator al in
multilatinas, and they are eagerly using M&A as Intermedica from its founder for approximately Sa

20 MERGERS & ACQUISITIONS July 2015 July 2

020_MAJ070115 20 6/5/15 7:15 PM

 $851 million.
tions We are not flying blind there. When we enter a new market,
s AB we focus on sectors we know well from other experience weve
rcent accumulated. For example, we previously owned call centers
2013 in the U.S. and Japan, and health care companies all over the
ecom world, says Gordon. Both deals were completed with equity
from Bain Capitals existing funds. We are looking to deploy at
port- least $200 million, and ideally more, per transaction. A number
active of Latin American markets are not at that scale but Brazil is. We
erica. currently have employees in Brazil working with our portfolio
ity in companies. An office in the country is most likely the next step
You for the firm, although that is not yet in the works.
lly in Many of the larger U.S.-based private equity firms are ex-
ass in pecting to be active in the region. Boston-based Advent Inter-
national closed on $2.1 billion for investment in Latin America
d on at the end of 2014. Advent Latin American Private Equity Fund
leted VI is the largest such fund ever raised for Latin America, topping
iones JPMorgan (NYSE: JPM) Asset Managements Gvea Invest-
Gru- ments $1.9 billion fund, which was raised in 2011. More than
NVs 60 institutional investors participated in LAPEF VI, including
nvest- public and corporate pension funds, endowments
mul- and foundations, funds of funds, sovereign wealth
Co- funds, family offices and other financial institu-
Peru tions. About half the capital was raised from North
American investors, one-quarter from European in-
ested vestors and the remainder from institutions in Latin
expe- America, the Middle East and Asia.
deals Advent plans to use capital to invest in all of
ks at Latin America, but primarily Brazil, Mexico and
Lat- Colombia. The firm will be looking for deals in the
ering $150 million to $250 million range. Advent has a
upon long history in Latin America, having invested in
r and more than 50 companies across the region and fully
eople exited 34 of those businesses in the past 18 years.
lent, Latin America is an important region for
Bain Advent because it is a large, growing market
with attractive dynamics including favorable Chris Gordon
Capi- demographics, opportunities for productivity
ca SA enhancement, fragmented industries and a high degree of
on in family ownership. We believe these dynamics create interest-
urced ing investment opportunities, particularly for private equity.
erica. The market is also characterized by limited competition from
de its other financial sponsors relative to the size of the markets,
. The says Patrice Etlin, a managing partner of Advent Internation-
erator al in Sao Paulo, Brazil.
mately Sao Paulo-based Patria Investments, which is 40 percent-
owned by Blackstone Group, closed on a $1.8 billion fund in
2015 as well.
However, its important to note that its not easy for private
equity firms, especially middle-market private equity firms, to
complete deals in Latin America because of the strong local pri-
vate equity industry.
Theres a local private equity industry usually playing in
middle market transactions, but there is definitely room for
scale foreign investors willing to put resources on the ground
and learn the market, says Gordon.
In addition to local competition, U.S. strategic acquirers
are also looking to grow market share by purchasing compa-
nies in Latin America. In May, PPG Industries (NYSE: PPG)
bought paint store operator Consorcio Latinoamericano for an
undisclosed amount. Consorcio operates a network of 57 paint
stores in Central America, which after the deal closes will allow
PPG to expand its operations in the area. After the transac-
tion is completed, PPG will have 87 company-owned stores in
Belize, El Salvador, Guatemala, Honduras, Costa Rica, Nica-
ragua and Panama. Pittsburgh-based PPG won Mergers & Ac-
quisitions M&A Mid-Market Strategic
Buyer of the Year Award after making a
handful of middle-market acquisitions
in 2014, in addition to Comex, a $2.3
billion paint purchase.
Earlier this year, Owens-Illinois Inc.
agreed to buy a Vitro SAB unit that makes
glass containers for food and beverages for
$2.15 billion to expand in the growing
market for food packaging in Mexico.
This transaction marks an import-
ant strategic step, said Owens-Illinois
Chairman and Chief Executive Officer
Al Stroucken. Vitros 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.
Certain sectors and countries are clearly more attractive than
others. Brazil, Colombia and Mexico have the most activity, but
the Pacific Alliance--Chile, Colombia, Mexico and Peruis in-
creasingly important. Founded in 2011, the initial goal of the
alliance was to further free trade and economic integration. The
four founding nations of the Pacific Alliance represent nearly 36
percent of Latin American Gross Domestic Product.

2015 July 2015 MERGERS & ACQUISITIONS 21

021_MAJ070115 21 6/5/15 7:15 PM

 Cover Story
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 signifi-
cant drop in commodity prices, and concern about the gov-
ernments 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 its still very important. That
said, the Pacific Alliance countries are
growing in importance as well.
Colombia is getting significant in-
bound 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 for-
eign 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.
Colombias strong GDP growth Patrice Etlin
and rising middle class are attracting
greater attention from international investors, though the pri-
vate equity market there is still developing, says Etlin.
Advent International acquired a minority stake in Colom-
bian brokerage Alianza Valores, while financial services com-
pany Encore Capital Group financial services acquired a ma-
jority 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 Colombias largest-ever telecom deal. Latin Amer-
ican-based private equity firms Altra, Mercantil Colpatria and
SCL Energa Activa acquired a Colombian power plant from El
Dorado Group, a U.S.-based infrastructure and project develop-
er 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 theres a lot of
change thats 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 through-
out 2014, but there are challenges, including lack of GDP
22 MERGERS & ACQUISITIONS
022_MAJ070115 22
growth. Mexico remains highly correlated to the U.S. market
and is a more concentrated economy, but we believe private eq-
uity penetration is limited and the countrys expanding middle
class and structural reforms are creating investment opportuni-
ties, says Etlin.
The telecom industry is seeing lots of activity in the coun-
try these days. The Mexican governments crack-
down on billionaire Carlos Slims Amrica Mvil
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 com-
pany controls about 70 percent of Mexicos mobile
market and 80 percent of the fixed-line business.
Reducing Slims market share below 50 per-
cent would be a win for President Enrique Pea
Nieto, who pledged to boost competition in Mex-
ico, where massive wealth is concentrated in a few
hands.
With all this in play, AT&T has been invad-
ing 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 mo-
bile 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 Mex-
ico. In December 2013, Mexicos 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 ex-
ploit future fields. The U.S. Energy Information Administration
estimates that the reform could yield a potential increase of 75
percent in Mexicos long-term oil production and open oppor-
tunities 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
6/5/15 7:15 PM
 Data

100
90
80
70
60
50
40
30
20
10
0

Deal Flow Momentum Continued in May but More Slowly

I
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 spon-
sored 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 Aprils 57.9. Leads, Signed Letters and Completed Deals all
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

July 2015 MERGERS & ACQUISITIONS 23

023_MAJ070115 23 6/5/15 6:44 PM

 Data

100

80

60

40

20

0
COMPOSITE DEAL DEAL DEAL ECONOMIC TAX REGULATORY
VOLUME VALUE MULTIPLES IMPACT IMPACT IMPACT

100

80

60

40

20

0
COMPOSITE DEAL DEAL DEAL ECONOMIC TAX REGULATORY
VOLUME VALUE MULTIPLES IMPACT IMPACT IMPACT

Less Irrational Exuberance for Financial Services M&A

D
ealmakers polled in May predicted that M&A in financial ser-
vices, insurance and real estate (FIRE) will increase over the
coming year, according to Mergers & Acquisitions Mid-Mar-
ket Pulse (MMP). But survey participants were not as enthusias-
tic 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 Con-
gress would lessen regulation of the financial services industry,
thereby boosting their hopes for the sector. In May, however, some
24 MERGERS & ACQUISITIONS
participants expressed concern that a slowing economy and a po-
tential hike in interest rates would slow M&A expansion in finan-
cial services. Reflecting those concerns, the sectors latest Com-
posite 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

024_MAJ070115 24 6/5/15 6:45 PM

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001_MAJ009 1 6/8/2015 9:41:01 AM


The 2015 AM&AA Summer Conference leads the industry in bringing
together key middle-market players, speakers and some of the years
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KEYNOTE SPEAKERS
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 Guest Article

Donating to Charity is a contr

chari
grant

Win/Win for PE Firms D

quidi
tial c
Contributing illiquid assets gives donors tax to co
assets
deductions and other benefits must
to sel
accep
Ryan Boland, Fidelity Charitable the n
must
assets

P
poten
rivate equity professionals may want to fair-market value of the charitable contribution. Fo
consider a different and potentially more For the charity, the subsequent seller of the asset equit
efficient way of donating to charity. or recipient of distributions generally does not pay stock
Whether at their own firms or their capital gains tax. These combined tax efficiencies ner in
portfolio companies, private equity professionals can sometimes enable donors to give 20 percent comp

embrace efficiency in all its forms. Increasingly, this to 30 percent more to charity than they could vehic
habit is carrying over to their charitable giving. have to a non-charity recipient, even in donating and e
Both the donor and recipient the exact same asset. In
public charity can derive signif- The first point to remember assets
icant tax efficiencies from the is that the assets must be donat- instru
The donor contribution of private equity ed outright to a public charity; privat
doesnt incur interests that are often held by selling or liquidating the assets Th
PE professionals and, more prior to the donation would ne- natin
a capital gains generally, any non-publicly trad- gate the benefits. If these same is str
tax on ed assets. Giving these types of private business interests were woul
appreciation, assets instead of cash can signifi- contributed to a private foun- terest
cantly increase the size and im- dation instead of directly to a likely
and is entitled pact of a charitable gift. public charity, the donor could receiv
to a charitable Non-publicly traded assets, claim only a charitable income tured
income tax also known as complex or illiq- tax deduction equal to the origi- have
uid assets, that can be donated nal tax basis in the donated asset. ty. If
deduction.

to public charities include pri- Because of these tax treat- to a p
vate C corporation stock, S cor- ment differences, many donors publi
poration stock, limited liabil- Ryan Boland who already have formed a fair-m
ity company interests, limited private foundation are choos- ity do
partnership interests and real estate. ing to contribute these complex assets directly to intere
Donating non-publicly traded assets offers a public charity. Donors who wish to have their Th
several efficiencies and advantages. The donor charitable gift go to many charities, however, are in a f
doesnt incur a capital gains tax on appreciation, increasingly choosing to make their contribution uity
and the donor is entitled to a charitable income to a charity with a donor-advised fund program, have
tax deduction for the independently evaluated, a charitable vehicle that allows donors to make chari

28 MERGERS & ACQUISITIONS July 2015 July 2

028_MAJ070115 28 6/5/15 6:44 PM

 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, li-
quidity and liability factors when weighing a poten-
tial 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 charitys 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.
ution. For the purposes of this article, the term private
asset equity interest encompasses portfolio company
t pay stock; limited partner fund interests; general part-
ncies ner interests, typically formed as a limited liability
rcent company; special purpose vehicle or co-investment
could vehicle interests, both typically formed as LLCs;
ating and even interests in a private equity firm.
In assessing whether these types of privately held
mber assets are suitable for charitable donation, it may be
onat- instructive to consider four scenarios for a fictional
arity; private equity firm: Kind Capital Partners, KCP.
assets The first scenario would be considering do-
d ne- nating an ownership interest in the firm. KCP
same is structured as a limited partnership. While it
were would probably be possible to transfer an LP in-
foun- terest in the firm to a public charity, it would not
to a likely be a great asset to give or for the charity to
could receive. Had the private equity firm been struc-
come tured as a publicly traded partnership, there may
origi- have been a great charitable planning opportuni-
asset. ty. If a partner donates his or her private interests
treat- to a public charity before they are converted into
onors publicly traded interests, the donor can receive a
ed a fair-market value deduction and the public char-
hoos- ity does not pay tax when it converts the private
tly to interests into public shares.
their The second scenario would involve an interest
r, are in a fund operated by KCP. A typical private eq-
ution uity fund, formed as a limited partnership, will
gram, have an expected term of eight to 10 years. Many
make charities prefer not to accept an interest in an as-
2015 July 2015
029_MAJ070115 29
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 compa-
ny to themselves before a possible sale, that stock
might make a terrific charitable contribution:
providing a highly valued fair-market value de- Many charities
duction for the donor, and a high-liquidity asset prefer not to
for the charity.
The fourth scenario involves interests in co-in-
accept an
vest vehicles or special purpose vehicles. Many interest in an
private equity firms form CIVs or SPVs to enable asset that will
the firms principals, employees and investors to
invest in and share more fully in the profits of not be liquid for
select portfolio investments. The CIV or SPV is many years.
likely to own interests in a single asset. If that as-
set 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 distribu-
tion from the CIV or SPV will flow to the charity
when the asset is sold.
There is a prominent industry trend toward pri-
vate equity firms creating more and more CIVs to
respond to investor demand. As more firms and in-
vestors 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 pri-
vate equity world is making tremendous contri-
butions to charity. As awareness of the advantages
of this method of charitable donation increase, it
is possible that overall giving will increase expo-
nentially.
Ryan Boland is a vice president for the complex as-
sets group at Fidelity Charitable, an independent
public charity with a donor-advised fund program.
MERGERS & ACQUISITIONS 29
6/5/15 6:44 PM
 People

Golub, Houlihan Lokey Tap GE Capital Alum Chian

As General Electrics (NYSE: GE) divestiture of GE Capital un-
folds, some of the groups executives are jumping ship. Other firms
have already started poaching the mid-
dle-market giants professionals. New York-
based 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 manag-
ing 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 po-
sitions, says Golubs Andy Steuerman, head of middle-market lending
at the New York firm. It doesnt hurt that GE Capital is up for sale. More
analys
He he
people are coming here. search
Schoennagal was a senior vice president at GE Capital before of the
joining Los Angeles-based investment bank Houlihan Lokey. At his at Ban
new post, Schoennagal will assist private rities.
equity-backed companies in raising cap- added
ital, in addition to working closely with the aging
firms U.S.-based Capital Markets team on from
cross-border financings. Schoennagel joins where
Houlihan Lokey after spending roughly 10 rant s
years at GE Capital, where he most recently Saleh
served as a senior vice president. General Nollen
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 capitals chief
technology officer to be CIO at Splunk.

American International Group Inc. (NYSE:
AIG) The New York financial services compa-
ny 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, shar-
ing 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. bail-
out. 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. Separate-
ly, Peter Juhas is stepping down as global head
of strategy. Juhas, who joined in 2011 after previ-
ously working at Morgan Stanley, is leaving to pur-
sue new opportunities, according to an AIG memo.
Baker & McKenzie Lee McIntyre has re-
turned 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 prac-
tice.
Barnes & Thornburg LLP The Los Angeles
law firm has tapped entertainment attorney Caro-
lyn 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, Virgin-
ia-based consulting firm tapped Art Chivvis and
Mark Hardy as managing directors and Jim Et-
tamarna and Marten Leijon as principals. Prior
to working at a namesake firm, New York-based
Chivvis worked in JPMorgan Chase & Co.s merg-
ers 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
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 in-
vestment bank recently announced a slate of
new hires. They include managing directors
Charles Mather and Gene Ramirez; direc-
tors Brett Fodero and Steven Marder; and
vice president Matthew McLeod. Mather,
previously co-head of equity capital markets
at Janney Montgomery Scott, joins BTIGs
New York headquarters with Fodero, who was
previously at BMO Capital Markets. Ramirez,
Marder and McLeod each previously at Mor-
gan Joseph TriArtisan join the San Francisco
office. Separately, Tim Chiang was brought in
as a managing director and specialty pharma-
ceutical research analyst. Prior to joining BTIG,

30 MERGERS & ACQUISITIONS July 2015 July 2

030_MAJ070115 30 6/8/15 3:55 PM

m Chiang was a managing director and senior covering footwear and
analyst at CRT Capital Group for five years. apparel manufacturers.
field was a managing director for SunTrust Banks
Inc. in Dallas. Previously, he had served as a prin-
cipal at Lauriat Capital, an executive vice president
He held similar positions at FTN Midwest Re- Previously, he worked
at CIT Group (NYSE: CIT)
search and Natexis Bleichroeder, and was part for Cohen Specialists and an officer at Barclays
before of the specialty pharmaceutical research team as an equity specialist plc (NYSE: BCS). Abra-
At his at Banc of America Securities and UBS Secu- on the American Stock ham has been named se-
rivate rities. The investment bank also Exchange. Robert Abraham nior vice president of new
cap- added Peter Saleh as a man- business development. He
th the Citizens Bank The firm has announced is a former Citibank vice
aging director. He joins BTIG
m on three new hires: director Lan Haverfield, president and currently
from Telsey Advisory Group, serves as president of
joins as well as senior vice presidents Robert
where he covered the restau- Abraham and Lawrence Ridgway. the Commercial Finance Lawrence Ridgway
ly 10 rant sector. Earlier in his career, League. Ridgways post
Haverfield has been hired as a director of
cently Saleh worked as an associate at originations in business capital for Citizens will be in the the business capital division. His pre-
eneral Commercial Banking. Most recently, Haver- vious banking experience includes positions at US
Nollenberger Capital Partners, Lan Haverfield
ril 10

ired a
chief

nnison
s chief
d held
V and

d in-
ate of
ectors
direc-
r; and
ather,
arkets
BTIGs
o was
mirez,
Mor-
ncisco
ght in
arma-
BTIG,

2015 July 2015 MERGERS & ACQUISITIONS 31

031_MAJ031 31 6/9/2015 1:16:39 PM

 People
Bank, Morgan Stanley and GE Capital.
Evercore (NYSE: EVR) Jeffrey Rosichan
has joined the investment banks 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 mar-
kets. Ballan was previous-
ly vice president of inves-
tor relations at residential
mortgage originator PHH
Corp. as well as a sell-
side 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 borrow-
ers 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 pres-
ident. 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 merchandis-
ing officer. Since then, Efros has helped HRC ex-
pand its services, which include advising retailers
on how to integrate supply chain logistics.
32 MERGERS & ACQUISITIONS
032_MAJ070115 32
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 out-
side 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
KeyBancs Boston branch.
Prior to joining BMO,
Griffin was at Cowen
and Co. LLC. Separately,
KeyBanc expanded its
consumer retail segment
in Charlotte, North Caro- Paul Griffin
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 Is-
lands-based holding company appointed Stfan
Descheemaeker chief executive officer. The
announcement coincides with the closing of its re-
cently-announced acquisition of Iglo Foods Hold-
ings. Descheemaeker will also serve as CEO of Iglo
Group, replacing current CEO Elio Leoni Sceti.
Descheemaeker recently served as CEO of Delhaize
Groups 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 liq-
uidate three funds. However, equities will continue
to be a part of Pimcos
investment services. Mai-
sonneuve took on the role
of chief investment officer
for global equities just af-
ter 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, Maison-
neuve 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 firms Minneapolis office. There he
will provide financial services to middle-market
clients and focus on expanding TrueNorths foot-
print across the Midwest. Jarretts past experience
includes positions at Kidder Peabody, Prudential
Securities, Lazard Middle Market and Quetico Part-
ners, which he Jarrett co-founded in 2009.
William Blair & Co. The Chicago investment
bank made Jonathan Skinner head of technol-
ogy 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 firms financial
sponsors group.
Winston & Strawn LLP Bill Bowers has
joined the New York law firm where he will repre-
sent underwriters, place-
ment agents, lenders and
liquidity providers in a va-
riety of structured finance
transactions in the trans-
portation 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 financ-
ings for almost all U.S. major airlines.
July 2015
6/8/15 3:55 PM
 GREG NELSON AARON SOPER NICK TALLY
gnelson@wilmingtontrust.com asoper@wilmingtontrust.com ntally@wilmingtontrust.com
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