Spring 2019

ROKU’S GROWTH: CREATING HUGE BUYOUT OPPORTUNITIES FOR TMT

The rapid rise of TV streaming platform company Roku has been difficult to ignore in the last year. Since going public, Roku has demonstrated market expansion and execution excellence, while lowering competitive risk and capital intensity through its strategic positioning as an “over-the-top” (OTT) takeover target and disruptive business model. With its continued growth, it is likely that larger companies such as Amazon or Google may be circling for a potential buyout.

TRANSDIGM ACQUIRES ESTERLINE

The aerospace-focused PE firm Transdigm acquired its rival Esterline last October for 4B$, its largest-ever deal. Evercore and Goldman Sachs advised Esterline, while Morgan Stanley advised Transdigm. This deal is expected to close this spring and will put Transdigm among the leaders of its industry. As of March, the company’s shares have increased by roughly 30% since the deal was announced and the market is optimistic about the company’s future.

EXPERTISE IS KEY WHEN IT COMES TO ENTERPRISE SOFTWARE

Software investments are currently surging in private markets. Technology pervades many PE deals because PE firms are in pursuit of deals that will drive sustainable value. Developments increasingly appealing to PE investors include artificial intelligence, data management, healthcare IT, industrial automation, and Software-as-a-Service.

PETAL: NO TRAINING WHEELS REQUIRED

Petal, a ‘beginners’ credit card company’ secured another round of funding of $34 million in October from Jefferies and Silicon Valley Bank. This comes several months after raising $13 million from Valar Ventures. Located in New York, one of the main hubs of financial technology (also known as, “Fintech”), Petal is a more developed startup poised to disrupt the credit card industry.

KKR ACQUIRES GEOSTABILIZATION INTERNATIONAL

On November 19th, private equity mega fund KKR & Co. (NYSE:KKR) announced an agreement to acquire GeoStabilization International (GSI) from Canadian private equity firm CAI Capital Partners. GSI is an infrastructure services company that specializes in geohazard mitigation. Their services include landslide repair, bluff stabilization, and rockfall mitigation.

INVESTING IN MARIJUANA STARTUPS WITHOUT TOUCHING THE CANNABIS

In 2017, sales of medical and recreational cannabis in the United States were nearly nine times higher than Oreo cookies and almost on par with Americans’ collective spending on Netflix subscriptions. Annual cannabis retail sales continue to grow year-over-year as new markets emerge and more states legalize medical and recreational marijuana.