M&A drama on the rise amid flood of deals, Tracking the transition from deal-by-deal to funded

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The Wire

Dec. 1, 2021

M&A drama on the rise amid flood of deals, Tracking the transition from deal-by-deal to funded

Happy Mid-Week!

Drama: You know, Dear Reader, we at the Hub love diving into The Drama. Here now is an entire report about Drama in M&A transactions.

Berkeley Research Group (which, in another arena, is the replacement GP selected by LPs of Novalpina’s first fund, read about that here), found in a recent survey that deal professionals expect M&A disputes to increase. And especially those deals involving private equity firms.

“As well as rising deal volumes, there are new deal structures, new investment vehicles, advances in technology and rapidly changing economic conditions, all of which have contributed to the number of M&A disputes,” said BRG director Kevin Hagon in the report.

Newbies: We have an in-depth look on Buyouts tracking the transition from independent sponsor to raising a first institutional fund, highlighting the journeys of Diversis Capital and Luminate Capital.

Diversis’s first realization, and “what changed the game for Diversis,” was a label and artwork software provider called BLUE Software, acquired in late 2014. “That was a carveout of a public company, and [an] independent process run by the corporation,” Ron Nayot told Buyouts. Diversis got wind of the opportunity, which had gone overlooked by the market, “and really ingratiated ourselves with the management team, with the corporation, and really built a partnership.”

But being a fundless sponsor meant going above and beyond to prove themselves. “It took us about six months of courting the general manager of that division, showing we were credible and knew exactly what to do,” Kevin Ma recalled. “That whole process took a year, year-and-a-half.” When it came time to pitch the board, the corporation was acquired by another public company, necessitating an additional round of persuasion.

Read more here on Buyouts.

That’s it for me! Hit me up with tips n’ gossip and feedback at [email protected] or over on LinkedIn.

Read the full wire commentary on PE Hub...

Also of note (may require subscriptions)

Siris Capital Group brings next flagship to market in tech fundraising wave (Buyouts)

How to score a fund commitment from CEFC: Executive director Rory Lonergan describes the two things Australian government-backed investor CEFC wants to see from a prospective GP in this short video. (New Private Markets)

"H.I.G. Capital is joining the race to raise technology investment capital by private-equity firms as deal values climb." (WSJ Pro)