Middle Market Growth Conversations

PitchBook's director of research and analysis, Nizar Tarhuni, spoke with MMG on the sidelines of the Association for Corporate Growth's InterGrowth conference about emerging areas for private equity investment. Although opportunity zones have garnered attention for their tax benefits and economic development goals, Tarhuni doesn't expect to see widespread middle-market PE investment through that program, and he explained why. Technology, on the other hand, is becoming increasingly popular among PE investors. He described the subsets of tech that are attracting interest now and where he predicts we'll see more activity in the future. To read more about trends in middle-market private equity investment, visit our website, middlemarketgrowth.org.

Today, SoulCycle is a well-known fitness brand with indoor cycling studios across the country. But back in 2006, the first SoulCycle opened in a former dance studio off of a rear lobby in New York City, a location that the company's co-founders, Elizabeth Cutler and Julie Rice, found on Craigslist. On this episode of Middle Market Growth Conversations, Cutler describes how she and Rice built SoulCycle into a successful business, why she recommends the co-CEO management model, what it felt like to sell SoulCycle to fitness company Equinox in 2015, and the advice she'd give to other entrepreneurs considering an exit. After this podcast interview, Cutler spoke onstage during a fireside chat at ACG's annual InterGrowth conference, the preeminent gathering for middle-market M&A professionals. Next year's event will be held in Las Vegas on April 20-22. Learn more at intergrowth.org.

Adam Boscoe, director of corporate development for Trimble, spoke with MMG about his company's M&A strategy, including what makes a target attractive, how Trimble's corporate development team is structured, and the types of deals he likes to see from investment bankers. Trimble is a 40-year-old public company that provides advanced positioning solutions used in industries like agriculture, construction and transportation to increase productivity and improve safety. Boscoe estimates the company does about seven to 10 transactions each year, and in 2018 it completed two of its biggest deals to date. During this episode, which was taped on the sidelines of ACG Denver's Rocky Mountain Corporate Growth conference, Boscoe also shared his perspective on deal terms today and how private equity buyers have impacted the market. For listeners involved in corporate development, ACG Global is launching a new event called the Strategic Acquirer Summit, which will be held in Dallas on Nov. 4-5. Look for more information at acg.org.

Pauline Brown, the former chairman of North America for LVMH Moët Hennessy Louis Vuitton, reflects on her experience overseeing LVMH's portfolio of luxury brands in the company's largest market, and she offers insight into how high-end brands are faring in the changing retail landscape. After leaving LVMH in 2015, Brown joined the faculty of Harvard Business School, where she teaches a course she developed called "The Business of Aesthetics." On the podcast, she describes why a business that prioritizes aesthetics—and the human connection it establishes with its customers—will position it for success relative to competitors who treat their products like commodities. Brown, who has also held roles at The Carlyle Group, Estee Lauder and Bain, will speak on May 7 during ACG's InterGrowth conference in Orlando, following the women's breakfast. To learn more about the conference and to view the full speaker lineup, visit intergrowth.org.

Working for a private equity-backed business isn't for everybody. According to Bob Ryan, a partner at Shields Meneley Partners, only 1 in 5 professionals he works with in his firm's executive transition program is a fit for a leadership role at a PE portfolio company. In this episode of the podcast, Ryan and Keith Goudy, managing partner at Vantage Leadership Consulting, discuss what it takes to thrive at a PE-backed company, how compensation is changing, and the strategies companies are using to attract talented leaders and employees alike.

At a recent ACG event in Detroit focused on cross-border trade, Middle Market Growth sat down with leaders from ACG's Detroit, Western Michigan and Toronto chapters. They weighed in on how issues like tariffs and NAFTA renegotiation are impacting middle-market companies, and whether legalization of cannabis presents an investment opportunity for ACG members. The episode features interviews with Chris Letts, vice president at Morgan Stanley and president of ACG Detroit; Ben Gibbons, a partner with RSM Canada and a member of the ACG Toronto board of directors; and Eric Kamstra, a member of the board of ACG Western Michigan. It was taped during the Cross-Border Connections conference, an event hosted by ACG Detroit, Western Michigan and Toronto in March.

Joseph Comartin, Canada’s consul general in Detroit and a former member of Parliament, spoke with MMG on the sidelines of the recent Cross-Border Connections conference hosted by ACG’s Detroit, Toronto and Western Michigan chapters. He discussed the trade relationship between the U.S. and Canada, the impact of the steel and aluminum tariffs, and a collaborative infrastructure project that promises to yield economic benefits on both sides of the border.

Lower middle-market companies are increasingly attracting interest from private equity buyers. To hear what it takes to successfully partner with these businesses, MMG sat down with Matt Petrucci, a partner with Plante Moran’s transaction advisory services team, and Brett Holcomb, a principal with private equity firm Prospect Partners. Check out Part 2 of this interview to hear Petrucci and Holcomb discuss the role PE firms play in helping a company preserve its culture. They also describe the most innovative business models they’ve come across, and the broader trends they expect will impact middle-market investing.

In Part 2 of our interview with Matt Petrucci, a partner with Plante Moran’s transaction advisory services team, and Brett Holcomb, a principal with private equity firm Prospect Partners, the two discuss the role PE firms play in helping a company preserve its culture. They also describe the most innovative business models they’ve come across and the broader trends they’re watching. In case you missed it, check out Part 1 of the interview, featuring a discussion of what it takes to invest successfully in the lower middle market.

During the Atlanta ACG Capital Connection, MMG Editor-in-Chief Kathryn Mulligan sat down with Jim Douglass of Fulcrum Equity Partners and Scott Linch of DHG Private Equity to discuss dealmaking in the Southeast, industries to watch, and a new accounting change that’s impacting private equity portfolio companies.