M&A Round-Up: Week of August 14th, 2023
KPMG Survey Finds ESG Drives Successful Transactions
ESG has become a significant topic in finance and is increasingly influencing the realm of mergers and acquisitions. KPMG recently conducted a survey among M&A professionals, revealing that half of the respondents have cancelled deals due to findings during ESG due diligence. Moreover, two-thirds of the respondents indicated a willingness to pay a premium for companies that align with their ESG priorities.
The survey encompassed 200 professionals, including investors and debt providers. The findings indicate that 74% of these professionals have already incorporated ESG considerations into their M&A agendas. Among them, 46% stated that this integration was motivated by the identification of ESG-related risks and opportunities. Additionally, 19% attributed this incorporation to investor requirements, while 14% mentioned anticipating new regulatory mandates.
As governments worldwide integrate ESG principles into laws, observing how M&A advisory firms adapt to this due diligence aspect will be intriguing. Advisors may need to adjust their mandates to better align with ESG requirements, thus enhancing the likelihood of successfully concluding deals.??????????????????????????????
Thoma Bravo and Madison Dearborn Partners, LLC Sell Syntellis Performance Solutions (now part of Strata Decision Technology)
On August 9th, Madison Dearborn Partners (MDP) and Thoma Bravo announced the sale of their ownership stake in Syntellis, an enterprise performance management software, data analytics, and intelligence solutions provider, to Roper Technologies, Inc. in an all-cash transaction valued at $1.4B
Thoma Bravo and MDP assumed control of Syntellis in August 2020 following its acquisition from Kaufman Hall . Over this period, Syntellis undertook several notable initiatives to enhance its market presence and offerings, including add-on acquisitions and an extensive product development journey which culminated in the creation of the Axiom365 software platform.
The sale to Roper Technologies underscores the culmination of Syntellis' transformation under Thoma Bravo's and MDP's guidance.
Tapestry Acquires Capri Holdings Limited for $8.5B
Tapestry, owner of Coach and kate spade new york , announced that it will be acquiring Capri Holdings, the parent company of Michael Kors , Versace , and Jimmy Choo , in a transaction valued at $8.5B. The combined entity will look to rival European fashion and luxury goods conglomerate 酩悦·轩尼诗-路易·威登集团 and Gucci ’s parent company, 开云 .
The news comes a week after Kering acquired a 30% stake in Italian fashion house Valentino for €1.7B ($1.8B). The transaction represents the largest fashion acquisition in recent years, creating a company with combined annual revenues of $12B.
The new entity will be better positioned to grow sales internationally and collaborate on the creative front. Nevertheless, Tapestry faces an uphill battle as all three brands acquired as part of the transaction have been facing declining revenues and brand image issues in recent years.
The Campbell's Company to Acquire Rao's Specialty Foods, Inc. for $2.7B
In a strategic move aimed at diversifying its product offering, Campbell's is set to acquire Sovos Brands , renowned for its Rao’s and noosa yoghurt brands. The transaction, valued at $2.7B, is equivalent to $23 per share.
Sovos Brands boasts a track record of robust historical growth, with the company's stock rising by 57% since the start of the year. The achievement is further underscored by Rao's impressive sales growth, surging 35% YoY.
With the acquisition, Campbell's will seek to harness Sovos Brands' exceptional growth trajectory, potentially leveraging its expansive platform to fuel further growth for Rao's products. However, it is worth noting that the premium paid for Sovos Brands is being regarded as high by several analysts, considering the market's previous valuation of the company and its mixed response in the aftermath of the acquisition.