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June News & Closed Deals: Versatile Corporate Growth Strategies

Nick Coetzee | July 16, 2019

Welcome to the fifth Edition of Axial’s Lower Middle Market Digest, your source of news and deal announcements featuring boutique investment banks, family offices, private equity-backed portfolio companies, and lower middle market businesses.

Last month we discussed how technology is no longer the exclusive poster child of the venture capital community, as traditional private equity firms and corporate buyers have started investing heavily in the space.

Corporations have been increasingly active in recent years, both through launching venture capital arms to supercharge innovation and R&D, as well as initiatives to invest off of their balance sheet in smaller businesses & startups.

In today’s economy, the strength of the market is leading to companies having more cash on hand, while PE firms are engaging in longer hold periods given the better return profile, as mentioned in Bain’s 2019 PE report.

As a result, public, PE-backed, and family-owned businesses alike are launching diverse strategies to grow their top line & invest off of their (or their portfolio companies’) balance sheets.

As seen above, companies are making a substantial number of venture capital type investments into startups, independent of whether or not they have formal VC arms.


CB Insights

One interesting example of this is Axial member National Express LLC (NELLC), the North American subsidiary of National Express Group, PLC, one of the premier transportation firms in the United Kingdom.

With no venture capital arm, National Express has made two strategic investments into startups within just the last 3 months:

  • A strategic investment in WeDriveU, Inc., the leader in transportation solutions specializing in corporate and university shuttles.
  • A $3.6 million dollar Series A funding round in Kango, the award-winning app-based rideshare and childcare service for busy families

As if the VC space wasn’t congested enough, family offices are becoming increasingly influential investors competing for such deals. With a patient approach and flexible capital offerings, entrepreneurs are seeing them as attractive partners.

In just the past few months, three family offices have closed on VC-type investments sourced through Axial.

Have thoughts to share about the future of VC or diversified corporate growth strategies? Shoot us a line at blog@axial.net

***Make sure to follow Axial on LinkedIn to stay up to date on all of the latest market news.***


Shoutouts

  • LoHi Merchant Bank and LoHi Securities Announce Name Change to BritehornRead More
  • Seven FTI Consulting Experts Recognized as Leading Patent Professionals by Intellectual Asset Management Magazine. Read More
  • Aaron Rodgers Launches $50 Million Venture Capital Fund with ROTH Capital Partners. Read More
  • Peakstone Publishes Industry Reports. Read More
  • The Washington Post Names Chenega MIOS a 2019 Top Washington-Area Workplace. Read More

Thought Leadership 

  • Opinion: Both Growing and Selling a Mid-market Firm Takes Focus from Cascadia Capital LLCRead More
  • ‘Fewer Choices, Higher Prices’: Here’s What Spurred 10 States to Try and Stop the Sprint T-Mobile Merger from martinwolf M&A AdvisorsRead More
  • An Unfiltered Discussion on Financing Growth, Selling a Business and the Future State of M&A from FirePower CapitalRead More
  • A Veteran’s View Of The Modern Health by H. Lee Murphy from Dresner PartnersRead More
  • Reasons ‘Why some businesses never sell’? from AR2 LLC. Read More
  • Workforce, Reimbursement Challenges Creating Shortage of Pediatric Home Health Providers from Excelin Home Health. Read More
  • 3 “Green” Patents That Could Save The Environment from Global Patent Solutions LLCRead More
  • The Small Business Lending Tool Every Community Lender Needs from Vital Financial Services. Read More

People Moves

  • Baker Tilly Adds New Partner Brian Francese to Commercial Practice in New York. Read More
  • Capital Alliance Bulks Up Energy Practice With Two New Hires and Expanded Services. Read More
  • FTI Consulting Appoints Emre Carr as a Senior Managing Director. Read More
  • RSM Expands Security Privacy and Risk Practice With Two New Partners. Read More
  • Acorn Growth Companies Names New Partner. Read More
  • Air T, Inc. Names Brian Ochocki as CFO. Read More
  • Crestmark Welcomes Jeremy Borkowski, Douglas Lee, Melissa Perkins and Randall Pundzus to Equipment Finance Division. Read More
  • Encore Consumer Capital Promotes Kate Wallman to Director. Read More
  • SK Capital Expands Team to Bolster its Focus on the Lower Middle Market. Read More

Deal News from Sell-Side Members

  • Cascadia Capital Advises Ss Brewtech in Middleby Corporation Acquisition. Read More
  • Auctus Supports Splash Wines as Executive Advisor. Read More
  • Boustead IPO Client Soliton Closes $9.45 Million Private Placement. Read More
  • PJ Solomon Advised Arteriors On Its Sale To Norwest Equity Partners. Read More
  • Marlin & Associates Advises Zoomdata On Its Sale To Marlin Equity. Read More
  • AGA Recapitalizes with Trivest Partners from Carter Morse & GoodrichRead More
  • Quarton, A Cowen Company Advises IK Investment Partners In Its Acquisition of LAP GmbH Laser Applikationen as Both M&A and Debt Advisor. Read More
  • Griffith Bag Company, Inc Has Been Acquired By Laurel SPR Investments from Transact Capital PartnersRead More
  • Closed Deal Announcement Britehorn Partners Advises HVAC Service Provider on Sale to Strategic Buyer from LoHi Merchant BankRead More
  • Avalon Net Worth assisted in the sale of International Granite & Marble Corp. Read More
  • FOCUS Investment Banking Represents HL Precision Manufacturing in its Combination with Hi-Grade Welding to form H3 Manufacturing Group. Read More
  • SSG Advises National Fish & Seafood, Inc. in the Sale of Substantially All of its Assets. Read More​​​​​​
  • PR: Evolv Acquired by Salewa from Compass AdvisorsRead More
  • Paladin Capital Advisors Concludes Another Successful Deal. Read More

Deal News from Buy-Side Members

  • Amerisource Closes $1,000,000 Credit Facility for Staffing Company. Read More
  • Sheridan Capital Partners Invests in Atlantic Vision Partners. Read More
  • Advent International Agrees to Acquire a Majority Stake in Transaction Services Group. Read More
  • Alaris Royalty Corp. Announces Closing of $100 Million Bought Deal Convertible Debenture Financing. Read More
  • Brook Portfolio Company Allegiance Fundraising Acquires WeDidIt Crowdfunding Platform. Read More
  • CapitalWorks Sweeps Up Essco. Read More
  • Defense Contractor Provengo Marches Forward with New Funding from Decathlon Capital PartnersRead More
  • Gen Cap America Partners with Management to Acquire Mayflower Sales Co. Read More
  • Great Point Partners Completes Growth Equity Investment in Tergus Pharma to Build New 100,000 Square Foot Manufacturing Facility for Topical Pharmaceuticals. Read More
  • H.I.G. Capital Management Acquisition of Cardinal Logistics. Read More
  • Portfolio Company Banner Solutions Acquires Berg Wholesale from High Road Capital PartnersRead More
  • HKW Announces Add-on Acquisition by Xirgo Technologies. Read More
  • One Equity Partners Completes Acquisition of Walterscheid Powertrain Group. Read More
  • Halifax Group Invests in StrataTech Education Group. Read More
  • Validor Capital Acquires EDSCO Fasteners. Read More

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Last Month on Axial’s Middle Market Review

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Top 20 Lower Middle Market Investment Banks [Q2]. Read More

From F-16s to the Lower Middle Market – 7 Lessons These Investors Learned in the Military. Read More

Larger Funds Don’t Always Equate to Larger Returns. Read More

Why NPS Can Be Misleading When It Comes to Customer Due Diligence. Read More

Inclusive Banking Processes Lead to Better Results. Read More

Finding the Right Exit for a Fast-Growing Platform. Read More

Financing the Deal: Debt Types 101. Read More


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