M&A Observatory – June 2024

Deal Activity

Growthink Capital Research tracked 885 closed Merger & Acquisition transactions in May 2024 with U.S. targets, compared to the 914 tracked in April 2024.

This total includes 346 Private Equity or Private Equity-backed acquisitions and 539 corporate acquisitions. The distribution of deals continues to be heavily skewed towards non-PE corporate acquirers, which represented over 60% of the total in May 2024.


Growthink Capital’s Transaction of the Month

The streak of restaurant acquisitions continues, following last month’s Subway takeover by Roark Capital Group.

On May 1, 2024, The ONE Group Hospitality, Inc. (Nasdaq: STKS) completed its acquisition of Safflower Holdings Corp., the owner of Benihana Inc., for $365 million in cash.

This acquisition supports The ONE Group’s strategy to fortify and diversify its portfolio of experiential VIBE restaurant concepts. The ONE Group also owns STK, Kona Grill, and RA Sushi.

Benihana, headquartered in Aventura, Florida, operates 68 Benihana restaurants, one Samurai restaurant, and 19 RA Sushi restaurants, making it the largest operator of teppanyaki restaurants in the United States.

Fun facts: Benihana was founded by Hiroaki “Rocky” Aoki,  a former wrestler who once sold ice cream with tiny Japanese umbrellas in Harlem. Rocky had 7 children, including the famous DJ Steve Aoki.


Top Industries and Segments

The top 5 associated industries by number of completed transactions were Commercial Services, Enterprise Software, Media & Information Services, Construction & Engineering, and Distribution & Wholesale.

The top 5 associated verticals were Manufacturing, SaaS, TMT, Industrials, and AI. Fragmentation remains high, with the top 5 verticals representing merely 29% of total transactions.


Revenue and Earnings Multiples

From the transactions that disclose the valuation as well as revenue and/or EBITDA information, Growthink Capital derived a median revenue multiple of 2.4x and a median EBITDA multiple of 7.5x (excluding negative EBITDA companies).

The median deal size was $116 million, consistent with the $116 million median from April.

 


The Biggest Deal

The largest transaction in May was Exxon’s $64.5 billion acquisition of Pioneer Natural Resources.

Another significant deal was Johnson & Johnson’s (NYSE: JNJ) $13.1 billion acquisition of Shockwave Medical Inc. This acquisition strengthens J&J MedTech’s position in cardiovascular intervention and accelerates its expansion into higher-growth markets.

Shockwave Medical, a medical device company, focuses on developing and commercializing novel technologies for treating cardiovascular disease. Its proprietary intravascular lithotripsy (IVL) technology, which uses sonic pressure waves to treat atherosclerosis, offers a minimally invasive, easy-to-use, and safe method to improve outcomes for patients with calcified cardiovascular disease. IVL catheters deliver this therapy to diseased vasculature throughout the body, setting a new standard of care for calcium modification.


The Oldest and the Newest

Founded in 1869, Vaughan Manufacturing is a hand tool manufacturer based in Woodstock, Illinois. The company offers a range of tools including straight claw hammers, curved hammers, pry bars, soft face hammers, industrial tools, bear saws, replacement handles and wedges, and more.

On May 15, 2024, Vaughan Manufacturing was acquired by Marshalltown for an undisclosed amount. This acquisition enables Marshalltown to provide its customers with an even broader range of industry-leading, innovative hand tools and equipment.

Meanwhile, seven companies founded in 2023 and one in 2024 achieved exits last month.

One of these newer companies is AstuteForce, also based in Illinois. Launched in 2023, AstuteForce specializes in providing Salesforce technology services, helping customers optimize their use of Salesforce to drive success and achieve business goals.

On May 20, 2024, AstuteForce was acquired by TechTorch, an AI-enabled enterprise technology solutions company that supports private equity-backed businesses. This acquisition will enhance TechTorch’s Salesforce expertise and expand its commercial excellence practice.


To explore M&A alternatives for your business – whether that be pursuing a sale of the company, liquidity for shareholders, or growth-by-acquisition opportunities – please get in touch by completing this form or calling us at (213) 927-3968.

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