Lower Middle Market Weekly Outlook

Good morning, all. While 2014 was a good year for fundraising, it looks like 2015 may be even better.  A survey by Coller Capital learned that nearly 40% of institutional investors are planning to raise their target allocations to PE in 2015. However, this fundraising seems dependent on GPs maintaining the exceptionally strong exit strategies of late.

It will be interesting to watch how the restoration of diplomatic ties between the U.S. and Cuba will impact investment strategies in the coming year. Although many — particularly real estate investors —  acknowledge the significant opportunity presented, some feel it is wise to be patient when approaching the new market.

In other news, after being ousted from the company last week, American Apparel founder Dov Charney is allying with Irving Place Capital to takeover the clothier.

Transactions:

• High Road Capital sells Handi Quilter
• Thai Union Group acquires Bumble Bee Seafoods
• New State Capital Partners buys UMS
• GI Partners to acquire Logibec
• Interfor completes debt financing with Prudential Capital Group
• OMERS PE sells Logibec
• TuneCore acquires DropKloud
• Aquiline to buy LenderLive
• The Riverside Group invests in Brookson Group
• Brookside Mezzanine Partners invests in MarketCast
• HGST to acquire Skyera
• Tailwater Capital closes $650 million energy fund
• Turnbridge Capital buys Cimarron Energy
• Spectrum Equity to buy ExactBid
• Capital IP Investment Partners invests in Magnum Semiconductor
• Charlesbank Capital Partners invests in Varsity Brands
• Hamilton Beach Brands acquires Weston Products
• Intercos and Catterton announce strategic partnership
• Actis invests in Genesis Group
• Warburg Pincus commits $75 million to Blue Yonder
• Audax Group sells Distribution International
• HDFC to raise $500 million real estate fund

Events:

• Happy Holidays!

Opinions:

• Improving access to capital markets
• Why so many mergers and acquisitions fail after the deal is closed
• Should middle market companies consider supply chain finance?
• Banks win more time to sell private equity stakes
• A short history of deals with Elliot and Thoma Bravo
• Private equity flexing its muscle in the energy sector
• As middle market M&A thrives, 15 trends to track in 2015
• Will cheap oil lead to big mergers?
• Investors fear industry is at ‘top of the cycle’
• PE firms helped drive record IPO issuance in 2014
• Private equity can be like a bad breakup
• What will pharma do when there are no more mega mergers?
• CalPERS may change benchmark for private equity
• Business development companies reveal risks
• Largest private equity-backed deals of 2014
• Anti-takeover measures often hurt investors

This week in history… Coca-Cola buys Orangina for $840 million (1997).