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Capital Market Insights – Week of May 28, 2018

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Recent Notable Merger & Acquisition Transactions

May 23, 2018 – Home Chef, a provider of a subscription-based meal kit delivery services designed to help people to save time while enjoying home cooking, entered into a definitive agreement to be acquired by Kroger for $700 million, or approximately 2.80x revenue.

May 23, 2018 – EPIC Fuels, a supplier of aviation fuels, reached a definitive agreement to be acquired by BBA Aviation (LON: BBA) for $88.1 million or 0.22x revenue.  This acquisition fully supports the strategic development of Signature through increasing acquirer’s network relevance, extending the range of fuel and non-fuel services they offer their customers across their unique FBO network and continuing to establish a competitive cost structure through investment in technology and economies of scale.

May 23, 2018 – Hospitality Careers Online, a provider of industry-specific online recruitment services, was acquired by Virgil Careers, via its financial sponsor led by Genesis Park, through a $16.5 million LBO or approximately 3.30x revenue. DHI will use the proceeds in accordance with its stated capital allocation strategy, including the reduction of the balance on its revolving credit facility, support of strategic initiatives and potential return of capital to shareholders.

May 22, 2018 – Sensata Technologies (Valves Business), a manufacturer of mechanical valves intended to be used in pressure applications, reached a definitive agreement to sell its Valves Business to Pacific Industrial Company for $173 million or 1.48x revenue. The acquisition will enable Pacific Industrial Company to expand its tire valves business. The transaction is expected to close in the third quarter of 2018.

May 22, 2018 – Toledo Molding & Die, a manufacturer and supplier of automotive systems and components, entered into a definitive agreement to be acquired by Grammer (ETR: GMM) for $271 million or 0.90x revenue. With the acquisition, Grammer can further expand its position in North America and increase the revenue contribution generated in the world’s second-largest automotive market.

May 21, 2018 – CommerceHub (NASDAQ: CHUBA), a developer of supply chain software, was acquired by Sycamore Partners Management and GTCR through a $1.1 billion public-to-private LBO. This represent approximately 9.75x revenue and 35.68x EBITDA.

May 21, 2018 – EMI Music Publishing, a publisher of music albums, entered into a definitive agreement to be acquired by Sony Corp for $2.3 billion or 5.76x revenue and 15.34x EBITDA.  The closing of the transaction is subject to certain closing conditions, including regulatory approvals.

May 21, 2018 – PowerPlan, a developer of financial software, entered into a definitive agreement to be acquired by Roper Technologies (NYSE: ROP) for $1.1 billion or 7.33x revenue.

May 21, 2018 – Gulf Power, a provider of electricity generation services intended to cover the energy world’s entire added value chain, reached a definitive agreement to be acquired by NextEra Energy (NYSE: NEE) for $6.5 billion or 4.29x revenue and 13.57x EBITDA.  The acquisition also includes the assumption of approximately $1.4bn of Gulf Power debt. NextEra Energy will finance the $5.1 billion cash portion of the transaction through the issuance of new debt.