In the world of Dallas-Fort Worth mergers and acquisitions call 2014 the year of the energy deal. Some 26 M&A energy transactions involving at least one North Texas party and worth at least $120 million closed last year, according to a D CEO analysis of Thomson Reuters data. The total value of those energy deals— $28.6 billion—outstripped all other M&A industry sectors last year.
While “energy spending will certainly slow in 2015,” says S. Scott Parel, a partner in the Dallas office of Sidley Austin LLP, another observer notes that private equity firms are still sitting on capital—they call it “dry powder”—that will need to be deployed in the sector. “They will be looking to pick up some bargains if commodity prices remain low,” says Amy R. Curtis, a partner in the Dallas office of Thompson & Knight LLP.
And, those lower commodity prices are benefiting other M&A sectors. Chris Converse, the Dallas-based partner and chairman of Gardere’s securities and corporate governance team, says his firm is seeing a number of manufacturing companies in play. “That’s probably part of a larger nationwide trend in which capital has been flowing back into the U.S. manufacturing sector due to a variety of factors, including lower energy and transportation costs,” says Converse, who’s also a member of Gardere’s private equity industry team.
We are proud to honor the companies and the dealmakers who helped make 2014 such a robust year with our 2015 Mergers and Acquisitions Awards, presented by D CEO and the Association for Corporate Growth. On the following pages, you’ll find profiles of the finalists for these awards. We’ll reveal the winners at an event in May.
Our judges for this year's program were: Tony Banks, director, business development, Hein & Associates; Michael Ehlert, senior vice president and region manager, Capital One Business Credit Corp.; Robert Kibby, shareholder and section head of corporate securities, Munsch Hardt Kopf & Harr PC; Jeff Noland, founder, chief operating officer, and chief financial officer, DartPoints; and Eric Williams, partner, Haynes and Boone. We appreciate their help.
Longwater Opportunities, sale of Circuitronics Inc.
The conventional wisdom is that when a private equity firm buys a business, the investors will cut everything to the bone in the interest of making a fast buck by flipping the company within a short time frame.
The trio of 30-something guys who run the Dallas private equity shop LongWater Opportunities wants the world to know they do business differently. Exhibit A: LongWater’s roughly 5-year ownership of Irving’s Circuitronics Inc., which culminated in the December sale of the firm to Los Angeles’ Corridor Capital.
Circuitronics assembles what are known as printed circuit boards, which are the green boards inside electronic devices that hold components such as chips. Founded in the early 1970s, the company puts together printed circuit boards for customers who need the gear to last a long time. But by 2009, when LongWater bought it, Circuitronics had seen its growth stall. Its manufacturing equipment was outdated, and it was performing a lot of jobs with old technologies and old approaches.
So, LongWater’s team did something most unlike what private equity is known for: they spent money on the business. LongWater poured capital in the high six figures into new equipment, and invested in everything from inventory and accounting software to new salespeople. All told, Circuitronics’ staff grew from the high 20s at the time of LongWater’s buyout to closer to 75 when it sold the business.
Jordan Bastable, a LongWater managing partner, says he and his partners in the firm, Brooks Burgum and Will Dobbs, are out to build their portfolio companies up—not the other way around. “We’re interested in adding jobs and partnering with family-run businesses,” he says.