Middle Market Weekly Outlook

Good morning, all. A study out last week explores how private equity firms determine capital structure, value transactions, source deals, and handle governance, and operational engineering. Among the findings, very few investors use DCF or net present value techniques to evaluate investments, relying instead on internal rates of return and multiples of invested capital. You can download the paper here.

Meanwhile, Quartz reports that boutique M&A advisors are eating big investment banks’ lunch, citing the players involved in the recent Verizon-AOL deal (LionTree Advisors and Guggenheim Partners for Verizon, and Allen & Company for AOL) and other headline transactions that have left out mention of any bulge bracket involvement.

Transactions:

• ConAgra buys Blake’s All Natural
• OnSource gets backing from Greybull Stewardship
• ZF acquires TWR automotive
• Torquest Partners sells Kissner Milling Company
• Mednax Inc. purchases vRad
• On Assignment Inc. buys Creative Circle
• Mud Pie LLC buys itself back from Lineage Capital
• Pexco sells TransDigm
• Direct Travel acquires Hobson Travel
• Chemetall acquires Chemal GmbH & Co. 
• J.F. Lehman & Company acquires Sprint Energy Services
• LivHOME Acquires Advanced Care Management

Opinions:

• Private equity is shaping the future of the NBA
• Small, midsize firms favor bank loans for capital needs
• Private equity won’t buy Huffington Post on it’s own
• Private equity firms were snubbed by regulators — and this chart shows how bad it is
• Private equity holding periods starting to fall
• Private equity firms improving disclosure of fees and expenses
• M&A the only survival strategy for the oil sector now
• Insurance world draws even more private equity cash 
• Time to check in on private equity
• More shale M&A on horizon as oil prices recover
• What do private equity firms say they do?
• Monetizing Investment: Equal terms for management and private equity sponsors
• Private equity doesn’t pay attention to CAPM
• Is M&A the new capital investment?
• Boutique M&A advisors are eating the big investment banks lunch
• M&A fuels fundraising
• New wave of M&A to be driven by innovation and disruptive deals
• An attractive M&A play in the busy biotech space
• Merger (insert day of the week) puts deals near record
• M&A activity in technology heats up

This week in history…The House passes the Tariff of 1824, designed to break America’s putatively heavy reliance on foreign goods (1824).