Lower Middle Market Weekly Outlook

Good morning, all. With the new year just days away, many are predicting that the oil industry will be particularly active for M&A in 2015. Given the recent downdraft in the price of oil, smaller oil and gas explorers are most likely to be targets for takeovers — especially given the overall friendly deal environment that will likely persist.

Last week also had some news about the private equity gender gap: Preqin learned that women occupied just 11 percent of senior level positions in PE firms — a rate they considered “notably low,” despite being higher than previous years. The same study revealed that only 12% of LPs believe having more women in senior private equity positions would improve returns. Fifty nine percent, however, believe that gender diversity would be a good thing for a firm as a general principle.

Transactions:

• Main Street Capital Corporation invests in Garlock Rubber Technologies
• First Reserve acquires Navigator Energy Services
• Onicon grabs Greyline Investments
• Morgenthaler PE buys Bowles Fluidics Corp.
• Barnes & Noble buys back Nook stake from Pearson
• Enhanced Equity Funds invests in West Dermatology
• Diversis Capital buys majority stake in BLUE
• LDC sells stake in Ocean Group to Searchlight Capital Partners
• Tailwind Capital buys Diamondback Drugs
• Kayne Anderson invests $100 million in Treadstone II
• NoteVault receives follow-on financing from West Partners
• High Road Capital sells Handi Quilter
• Mrs. Fields Confections acquires assets of Maxfield Candy Company

Events:

•  Happy New Year!

Opinions:

• Entering the secret garden of private equity
• M&A boom helps push investment banking fees to highest level since 2007
• 2014 middle market IPO activity increases over 2013, but continues to lag behind historic levels
• Corporate boards have latitude in mergers
• 2015 could be watershed year for capital formation by mid-market companies
• PE in 2015: Mike Beauregard on debt, valuations
• Private equity funds still going strong in Brazil despite economic malaise
• Why was 2014 a year of mergers and mega deals?
• Cross border mergers face growing scrutiny
• Nonbank lending hits a high in Europe
• 5 ways Washington is actually helping small business
• Private equity expected to be big winner in alternatives in 2015
• What a CEO learned about private equity and new value-creation paths
• Success and failure in a year of prominent deals
• Top health care mergers, partnerships, and alliances in 2014
• Good days not yet here for India’s investment bankers

This week in history… The Celler-Kefauver Anti-merger Act passes into law (1950).