Lower Middle Market Weekly Outlook

Like Columbus in 1492, Blackstone seems to be moving into uncharted territory. Last week, the firm announced that it had decided to both spin off its advisory division and strike acceleration clauses in its future monitoring fee agreements. Both moves seem to be motivated by growing scrutiny from legal and regulatory watch dogs.

Although the advisory business was Blackstone’s oldest division, it supposedly “was being hampered by potential conflicts of interest arising from being housed under the same roof as a giant investing arm.” The newly independent business will be run by Paul J. Taubman. Some worry that the move could start a trend for other major PE shops.

Other PE norms are also being challenge as Elevation Partners opts out of traditional fund structure and GPs are becoming open to longer-term deals.

Transactions:

• StoneCalibre acquires Edge Biosystems
• Novacap buys Dialogic
• Aquiline to invest in Worley
• Century Capital invests in PrecisionLender
• Lincoln Electric Holdings acquires Easom Automation Systems
• The Jordan Company to acquire American Freight
• Impax to acquire Tower Holdings and Lineage Therapeutics
• Clearlake Capital buys Sage
• Sterling Partners invests in Results Physiotheraphy
• Postmedia to buy Sun Media for $275 million
• Monomoy Capital Partners completes take-private of Cobra Electronics Corporation
• TheStreet to acquire BoardEx
• NewBridge Bank and Premier Commercial Bank to merge
• Generation Growth Capital acquires Atlantic Precision
• Five Points Healthcare acquires Willowbrook Health Systems
• New Mountain closes its fourth fund
• Rock Hill recaps Rail Services & Logistics
• Voice Solutions completes acquisition of Digital Clinic
• Quad-C Management buys majority stake in Vaco
• Catamaran to acquire Salveo Specialty Pharmacy
• Ironwood Capital invests in Flow Dry Technology

Events:

• Tuesday: Axial Summit in Boston
• Wednesday: Trends and Opportunities in the Food & Beverage Industry Roundtable
• Wednesday: EuroGrowth 2014 in London

Opinions:

• The contract packager’s dilemma: Do I sell or do I grow?
• Should you split your company? What HP’s big move can teach entrepreneurs
• Private equity’s reputation is hurting deal flow
• Advisers turn to private equity as hedge funds lag
• Why investment banks are heading to UAE
• Mezzanine finance: A way to invest in growing companies
• CIOs look to middle market loans for returns
• Study finds that hospital mergers increase costs
• Energy mergers born of a production boom
• Private equity performance not dictated by how fast capital called
• Middle market debt: Better returns at lower volatility
• PE fundraising struck by third quarter malaise
• Private equity and activist investors: Frenemies in deal making
• Operating partners are facing scrutiny from the SEC
• The challenge energy companies face after mergers
• There’s a PE firm that buys the unsexy tech

This week in history… Congress passes the Clayton Anti-Trust Act (1914).