Wall Street: Come get your 'corporate orphans'

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10 THINGS ON WALL STREET

Hi. I'm Aaron Weinman. Let's look at the M&A environment — particularly the white-hot demand for healthcare, and opportunities behind corporate carve outs.

Before going into that, it's our last call to nominate up-and-comers for Insider's 2022 class of Wall Street rising stars. Submit your ideas here.

Now, let's get on with it.


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Images of the healthcare industry

1. Healthcare and corporate divestitures remain hot. They provide hope in an otherwise lackluster year for M&A.

But Amazon's $3.9 billion play for clinic operator One Medical could prove one of the most meaningful transactions of the year, according to Robert Brown, global chief executive of independent investment bank Lincoln International.

"There's this convergence of traditional healthcare, consumerism, and digitization," Brown told Insider. "We're in the early innings of what that's going to do for how we seek and consume healthcare services. Amazon wants to be a player in that."

Brown said certain spots of healthcare will feel the pinch of inflation through increased labor costs, but he's bullish on healthtech and, interestingly, animal health.

"We have an aging population. You still have demand. And one of the hottest areas we've seen, although it's cooling off a bit, has been animal health. During the pandemic, everybody bought pets. The shelters cleared out," he said.

Conglomerates from General Electric to Kellogg, meanwhile, have announced plans to spin off or sell certain businesses to focus on core areas as businesses adjust to high inflation and an economic slowdown. That's an opportunity for acquisitive private-equity firms.

PerkinElmer on Monday became the latest business to join the carveout craze, when it agreed to sell three businesses to New Mountain Capital for $2.45 billion. It will focus on life sciences and diagnostics (also hot healthcare spaces), and is shedding its applied, food, and enterprise services businesses.

"Private equity loves to buy 'corporate orphans.' They say 'hey, if I put a good manager on this, as a focused business, it can be way better than being lost in the shuffle of a conglomerate,'" Brown said.

In case you missed it, here's a look at the who's who behind the Amazon-One Medical deal.


In other news:

Fintechs are filling up leaderhsip roles with seasoned executives.

2. Fintechs are shifting their recruiting efforts. Companies are looking for seasoned veterans who can help weather the rough market environment.

3. Wells Fargo is bringing thousands of workers to Dallas, Texas. The San Francisco-headquartered bank plans to build a $200 million lakeside office campus in Las Colinas, the Dallas News reported.

4. Investors and venture-capital firms are funding innovative startups throughout the creator economy and influencer industry. Here are 13 standout investors who are betting on disruptors in an economic downturn.

5. Pivoting back to healthcare, some startups in the space have raised billions of dollars on the promise of disrupting the space. Here are the presentations obtained by Insider that many used to raise cash.

6. Tom Brady-backed breadmaker Hero Bread is in talks to raise a convertible note, according to Bloomberg. The note is poised to convert at either a $400 million valuation for Hero Bread, or a 20% discount to its next funding round.

7. Toronto-Dominion Bank is close to a more than $1 billion deal to buy investment bank Cowen, the Wall Street Journal reports. A deal – which would give TD Bank a deeper presence in investment banking as well as the US — could be announced as soon as Tuesday

8. Publicis just won most of AB InBev's $5 billion ad business. Here's seven other accounts up for grabs, and who could win them.

9. More than 30,000 tech employees lost their jobs as of July. These are their stories of the personal and economic toll of staff cuts in the industry.

10. Rihanna's net worth has ballooned to $1.7 billion. Here's how the 34-year-old Barbadian singer — who was declared a national hero of the Caribbean island nation last December — built her fortune.


Done deals:

  • GoDigital Media Group has acquired NGL Collective, a Latin-American digital media and entertainment company. As part of the deal, NGL will merge with GoDigital's mitú, a digital publisher that is focused on Latino content.
  • Global Payments will pay $4 billion to buy payments tech firm EVO Payments. It will also obtain a $1.5 billion convertible investment from Silver Lake as part of the purchase.

Curated by Aaron Weinman in New York. Tips? Email aweinman@insider.com or tweet @aaronw11. Edited by Hallam Bullock (tweet @hallam_bullock) in London.

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