One firm taking advantage of the competitive M&A market is TA Associates.
The Boston growth firm has been active recently, exiting several deals. While some PE firms are sitting out the current M&A market because transactions are too expensive, others are taking advantage. “They’re taking money off the table,” one GP said of TA’s selling spree.
“Prices for companies are high right now, so it certainly is the right time to sell — especially if you think the market is approaching a peak,” a placement agent said.
One of TA’s biggest exits this year was BluePay Processing. On Dec. 1, First Data completed its $760 million buy of BluePay, the Naperville, Illinois, payment processor. TA acquired BluePay in 2013 for more than $200 million, Buyouts reported. The investment came from the firm’s 11th flagship fund, which collected $4 billion in 2009.
Another sale: Hershey on Dec. 18 said it would buy Amplify Snack Brands, maker of SkinnyPop popcorn, for $12 a share, or $1.6 billion. TA, Amplify’s largest stockholder, owns about 43 percent, or 33.15 million shares, a Hershey spokesman said. At $12 a share, TA’s stake is worth about $400 million.
TA acquired SkinnyPop in 2014, paying $320 million for a majority of the company (including $150 million in debt), Buyouts has reported. TA tried to sell the company back in 2015 but ended up taking it public. The investment came from TA XI, regulatory filings said.
TA is also exiting MedRisk less than two years into its investment. Carlyle Group said Dec. 18 that it would buy the specialized managed-care company. Buyouts pegged the sale at north of $1 billion. It’s unclear how much TA paid for MedRisk. Moody’s Investors Service reported TA’s investment in MedRisk in February 2016.
A growth firm, TA takes minority and majority positions in companies and invests $50 million to $500 million equity per deal. The firm targets five sectors including business services, consumer, financial services, healthcare and technology. TA closed its most recent flagship, TA XII, on $5.3 billion in 2016. How much of the pool has been invested is unclear.
While TA has been selling, it’s also been buying.
On Dec. 19 TA revealed separate investments in Flexera, a software developer, as well as the $802.5 million acquisition of the single strategy asset management business of Old Mutual Wealth. And on Dec. 18, TA invested in Healix, a provider of infusion therapy management services.
The investments in Healix and MedRisk came from TA XII, Preqin said.
TA could not be reached for comment.
Action Item: Contact Jeffrey Barber, co-head of TA’s North American healthcare and consumer group, at email@example.com
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