Slideshow: Middle Market Deals Down in Q1, Houlihan Emerges as Top Advisor

Middle market transactions, like general M&A, dropped in first quarter.

Globally, there were roughly 8,000 middle market mergers in Q1, according to Thomson Reuters. The deals generated $148.8 billion, a 16.8% decrease from the same period in 2011. The top deal came from Crown Castle International which acquired a portfolio of ground lease-related assets from Wireless Capital Partners for about $180 million in cash (plus $320 million in debt).

Thomson Reuters, publisher of peHUB, defines middle market transactions as those deals valued up to $500 million.

The drop in middle market deals isn’t a surprise. A few weeks ago, peHUB reported that there were 2,332 U.S. announced M&A transactions in first quarter, valued at $192.7 billion. This represents a 53% decrease by deal value and a 21.5% slide by the number of deals, Thomson Reuters said

There was one winner in Q1. Houlihan Lokey emerged as the top middle market deal advisor with 28 transactions, Thomson Reuters said. Houlihan Lokey advised in the $245 million sale of TFI Holdings to Heckmann Corp., as well as Schiff Nutrition Group’s $150 million buy of Airborne.

Here are the top three PE-backed middle market M&A deals.

Image credit: M&A concept photo courtesy of ShutterStock


[slide title=”3. Transcend”]

Image courtesy of Shutterstock

Nuance Communications, in March, agreed to pay $29.50 a share, or $300 million, to acquire Transcend Services. Transcend provides transcription and clinical documentation services to the healthcare industry.

Nuance is backed by Warburg Pincus. In 2009, Warburg paid $175 million for a stake in Nuance.

[slide title=”2. ISTA Pharmaceuticals”]

Image Credit: Courtesy of ISTA Pharmaceuticals

Bausch + Lomb in March also agreed to buy ISTA Pharmaceuticals for $9.10 a share or roughly $500 million. Warburg Pincus owns Bausch & Lomb. Irvine, Calif.-based Ista is a leading prescription eye care business.

According to the New York Times, the deal makes sense for Bausch because it already makes nearly all of ISTA’s current U.S. products. Goldman Sachs advised Bausch. Greenhill & Co. provided financial advice to Ista.

[slide title=”1.A&P”]

Image of fruit and produce courtesy of Shutterstock

In March, supermarket chain A&P emerged from Chapter 11 bankruptcy. Mount Kellett Capital Management, The Yucaipa Cos. (the investment vehicle of Ron Burkle) and funds managed by Goldman Sachs Asset Management provided $490 million debt and equity financing to sponsor the reorganization. JP Morgan and Credit Suisse also arranged a $645 million exit facility.

A&P filed Chapter 11 in December. The company, which is actually The Great Atlantic & Pacific Tea Company, operates 320 stores in six states under the following trade names: A&P, Waldbaum’s, Pathmark, Best Cellars, The Food Emporium, Superfresh and Food Basics.