For starters, they represent a foundation for next-generation networks. Click below to download and read our Q1 2024 Market Updates for sector-specific insights and synthesis across categories.
G2 Capital Advisors, a leading full-service investment bank and restructuring advisory firm, announced the continued expansion of its investment banking team today with the addition of Heidi Piché, a managing director in the firm’s consumer and retail group. As Managing Director, Heidi will spearhead the firm’s efforts in the Consumer & Retail industry, leveraging her extensive expertise and industry knowledge to deliver exceptional advisory services to G2 clients within the Consumer & Retail vertical, specifically the restaurant and franchised business sectors.
“We are thrilled to welcome Heidi as a senior member of G2’s consumer and retail team,” said President of G2, Matt Konkle. “Her deep experience and relationships across the consumer and retail space both complement our existing capabilities and reinforce our ability to deliver best-in-class client outcomes.”
Piché brings over 20 years of banking experience, primarily in helping middle-market restaurant companies raise capital for growth and/or M&A activity. Prior to joining G2, Heidi spent 15+ years at Wells Fargo, most recently as a Segment Leader within the Restaurant Finance Group. During her tenure, she was pivotal in establishing Wells Fargo as an industry leader in Restaurant Finance, executing high-profile transactions, fostering valuable client relationships, and developing innovative financial strategies.
Before leading a division of the Restaurant Finance Group, Piché was an officer in the Credit Resolution Group, providing risk management and industry expertise to clients most impacted by the COVID-19 pandemic. She began her tenure at Wells Fargo as a Business Development Officer, managing and developing client relationships, working closely with both founder-owned businesses and private equity sponsors active in the C&R industry. Before joining Wells Fargo, she worked at Bank of America in the Corporate Banking Restaurant Group.
“Heidi’s appointment represents a significant milestone for our firm as we continue to strengthen our position in the consumer and retail sectors,” said Jeffrey Unger, Chairman & CEO of G2 Capital Advisors. “Her expertise and dedication to delivering exceptional client service align perfectly with our mission of providing best-in-class investment banking services. We are delighted to welcome Heidi to our team and look forward to the success she will have on the G2 platform.”
G2 Capital Advisors offers M&A advisory services, including sell-side and buy-side advisory capital markets, operational and financial restructuring, and related strategic advisory services to complement a client’s growth plan. With a distinguished track record of advising on nearly $4 billion in closed M&A transactions, providing integrated investment banking services for high-growth companies in the Consumer & Retail, Industrials & Manufacturing, Technology & Business Services, and Transportation & Logistics industries.
CLIENT
PureRED is a leading marketing, data, and technology partner delivering digital content at scale. With over 50 years of experience, PureRED works with 14 of the largest 25 retailers in the country and provides fully integrated marketing and advertising capabilities for Fortune 500 brands across retail, consumer packaged goods, financial services, and specialty brands.
SITUATION
Throughout its partnership with RFE, PureRED has grown and evolved as a marketing services business. To deeper serve its customers, PureRED sought additional strategic capabilities across retail marketing, technology-enabled, and analytics solutions. The team enlisted G2’s M&A advisory solution to enhance an extensive organic initiative to expand digital capabilities.
ENGAGEMENT
G2 Capital Advisors, LLC (“G2”) partnered with RFE Investment Partners and PureRed Management as the exclusive buy-side advisor to the Company. The partnership included a comprehensive strategy definition process to identify accretive growth opportunities and targeted outreach to relevant candidates in the marketing services industry.
OUTCOME
G2’s mandate with PureRED brought a successful acquisition of Haddad & Partners, a leading design and digital agency. The Fairfield, CT-based company maintains a global footprint to deliver design, copy & content, animation, digital delivery, and analytics solutions for multi-national brands in technology, financial services, and consumer products industries.
“This is a great day and we are energized about the possibilities this new partnership affords our clients and teammates,” said Brian Cohen, CEO at PureRED and H&P. “H&P’s expertise in content creation, innovation, and digital delivery complements PureRED’s technology, data, and creative offerings seamlessly. DJ and his team have built an impressive company, and their culture aligns perfectly with ours. The future is bright for all of us.”
“This is the next evolutionary step for H&P and we’re beyond excited to be taking it with PureRED. This move expands our talent pool and capabilities, and it also provides our clients with plenty of new offerings, while giving our global team some amazing opportunities for growth,” said DJ Haddad, Founder and Chief Creative Officer at H&P. “We look forward to the exchanging of cultures and ideas between our two companies and the benefits it’ll bring to all of our clients.”
Andrew Keleher, Director of Business Development at G2 Capital Advisors, and lead contact on G2’s engagement with RFE and PureRED added, “It is incredible to see these businesses join together. Through our close relationship with RFE, we built a robust strategy to support PureRED via add-on acquisitions. It is exciting to see how well DJ and Haddad & Partners fit that strategy, and we are thrilled to see how the businesses will continue to strengthen each other as a combined organization. G2 is looking forward to supporting continued growth for the organization in 2023.”
About PureRED
PureRED is an award-winning, 600+ associate, PE-owned advertising, marketing, and technology company that creates and distributes digital content at scale for 14 of the largest 25 retailers in the US and provides Fully Integrated Advertising and Marketing solutions for Fortune 500 Consumer and Retail brands.
About Haddad & Partners
Haddad & Partners is a full-service, global creative agency made up of a veteran team of problem solvers, designers, copywriters, animators, developers, video producers, and all-around doers. Since 2007, they’ve worked tirelessly for some of the world’s biggest brands, such as Microsoft, Amazon, TD Bank, Fannie Mae, and Total Wine & More, in generating innovative and measurable creative campaigns while never losing sight of the importance of maintaining a highly collaborative remote working environment.
About RFE Investment Partners
RFE Investment Partners is a private equity firm focused on making control investments in established small market companies located in the United States. RFE is a long-standing firm founded in 1980 with over 40 years of experience investing in the lower middle market. RFE’s investment strategy is to transform its portfolio companies from the lower end of the market to fully professionalized and market-leading middle-market companies. RFE is currently investing out of Fund IX.
About G2 Capital Advisors
G2 Capital Advisors provides M&A, capital markets, and restructuring advisory services to the middle market. We offer integrated, multi-product, and sector-focused services by pairing highly experienced C-level executives with specialist investment bankers. We aspire to be the trusted advisor to our clients, including corporations and institutional investors.
CONTACTS ON THIS DEAL:
Andrew Keleher, Director, Business Development T: 860.748.6480 E: [email protected]
Ben Stevenson, Associate: T: 412.680.9100 E: [email protected]
Jeremy Caulkins, Associate: T: 585.645.4472 E: [email protected]
Jereme LeBlanc, Managing Director, Buy-Side T: 917.541.5164 E: [email protected]
G2 Capital Advisors is pleased to present its Consumer & Retail, Industrials & Manufacturing, Technology & Business Services, and Transportation & Logistics market updates. Click to download the full reports, including commentary and analysis on Q4 M&A and market trends within our core focus sectors.
Consumer & Retail Market Trends:
While retail foot traffic rose for practically all categories, it wasn’t enough to counter the effects of inflation combined with deep holiday discounting. Inflation was up 6.5% from year-ago levels – while lower than the peaks seen earlier in the year, it was enough to dampen consumer confidence heading into holiday shopping. Moreover, food prices continue to climb, driving consumers to devote more of their dollars to necessities rather than discretionary goods.
Industrials & Manufacturing Market Trends:
After two years of pandemic-fueled disruption, a host of new challenges arose in 2022 for packaging businesses as increased inflation and interest rates, the war in Ukraine, and commodity prices hitting historic highs, impacted the pace of M&A activity. Despite the challenging macroeconomic environment, the appetite among private equity groups and strategic buyers for well-established packaging companies remained high.
Technology & Business Services Market Trends:
The US economic outlook remains unclear with a general negative sentiment. Increasing interest rates, supply chain issues, and geopolitical uncertainty are putting pressure on multiples in many segments of the market. Value creation and a focus on fundamentals will be key themes in 2023 with businesses and investors intent on how they build value organically and inorganically in line with core growth theses. For many privacy equity firms, the near-term focus will likely be on add-on acquisitions that enhance existing portfolio companies.
Transportation & Logistics Market Update:
As transportation and logistics providers navigate an uncertain economic and freight environment, operators in California are faced with an additional challenge as Assembly Bill 5 California (“AB5”) takes effect following numerous legal battles. AB5, which became state law in 2019, requires companies to reclassify many independent contractors as employees, prohibiting trucking companies from working with owner-operators and 1099 drivers in California. In an environment where a driver shortage persists, eliminating a strategy that provides trucking companies scalability and flexibility could have lasting implications across the freight market.
Questions? Please reach out to our team below.
Record-breaking post-Holiday sales masked a marked slowdown in overall retail spending. Despite Black Friday and Cyber Monday sales surpassing $20 billion for the first time in history, U.S. retail spending experienced its most significant decline of the year, suggesting households are making strategic financial decisions as they plan for the road ahead. The economy remains at an unprecedented crossroads, with many questions looming:
Will inflation continue to slow, and how much further could interest rates rise? The Fed continues to raise rates at a slightly slower pace and has signaled its intention to continue doing so at least through the spring.
Will a slightly slowing economy morph into a full-blown recession, and will the labor market remain strong? While sales and margins show signs of softening, the labor market continues to defy expectations, making it hard for the Federal Reserve to further ease the policy. Layoffs in the technology, media and real estate industries make headlines. Still, they represent a minuscule portion of the labor force, with overall jobless claims falling by 20,000.
How much longer will pandemic-era savings and easing supply chains buttress consumer spending, and will they continue to spend more on necessities? While personal savings soared to nearly $6.5 trillion in 2020, they’ve since dropped to below $500 billion, lower than the $1.4 trillion pre-pandemic. Despite supply chain imbalances driving discount sales as retailers looked to shed excess inventory, consumers are focusing their budgets on food and other staples and spending less on holiday categories such as electronics, clothing, and sporting goods.
Ultimately, is a recession inevitable, and how bad might it get? This remains anyone’s prediction, but for business owners, management teams, and industry leaders, any level of uncertainty should be met head-on – waiting to seek clarity can be a losing move.
Connect with G2 to discuss your 2023 strategic objectives. At G2 Capital Advisors, deep sector and operational expertise underscore our dedication to achieving success at all costs. We support clients through both healthy market cycles and times of distress, with a refusal to fail. We provide highly tailored advice to company-specific circumstances in an ever-changing world. Reach out today to start the conversation.
G2 Capital Advisors is pleased to present its Technology & Business Services (“T&BS”) industry update for Q3 2022, providing commentary and analysis on M&A and market trends within the Technology & Business Services sectors and sub-sectors.
The US economic outlook remains uncertain with a general negative sentiment. While supply chain issues are easing, the hiring and job markets remain strong, and consumer spending while slowing is not plummeting, The Conference Board forecasts that economic weakness will intensify and spread more broadly over the coming months driven by inflation and a hawkish Federal Reserve stepping in to aggressively increase the federal funds rate. The Federal Reserve typically walks rates up slowly because they work with a lag, but one that can be powerful. The current rate of increases has them moving more quickly to offset the lag which is a delicate balance. The Federal Reserve’s rate increases represent the fastest tightening since the 1980s when they ultimately raised rates to nearly 20%, sending unemployment to greater than 10%.
The impact on the T&BS M&A market is largely just emerging. We are seeing a slowdown in response increasing costs of leverage and the general uncertainty in the market as well as a marked increase in scrutiny of fit and during diligence. Additionally, many private equity firms were able to return capital to investors from strong exits over the last couple of years, taking the pressure off near term exits. However, quality deals are getting done and 2022 volume is expected to be up from pre-pandemic levels.
Several sectors in particular have seen increased deal volume generated by significant tailwinds. Cybersecurity software and services deals have received interest and attention driven by the ongoing diplomatic tensions between the US and Russia created by Russia’s invasion of Ukraine earlier in the year, as well as the continued fraying of relations with China in response to a host of factors. There has been a similar boom in IT consulting services sector, as companies continue to need highly-specialized, knowledgeable consultants to help them adapt to the ever-changing technology landscape and offset a tight skilled labor force.
Rising Inflation Causing Consumer Pause
With the changing inflation rates, the U.S. still holds an optimistic outlook on global e-commerce, though some consumers may be more hesitant to engage in interactions. Ensuring proper customer experience and well-handled delivery procedures could go a long way in retaining shoppers in 2023.
Mastering the Retailer Supply Chain
Players like Amazon and Walmart have set a new standard for consumer’s expectation for same-day or next-day delivery. To respond, we’ve seen retailers enhancing their partnerships with, and even acquiring third-party logistics providers to get goods to consumers faster. Recent examples include American Eagle Outfitters’ acquisition of Quiet Logistics, Costco’s acquisition of Innovel Solutions, and Panasonic’s acquisition of Blue Yonder, a widely used warehouse and labor management platform.
It’s no secret COVID-19 exploited vulnerability to global supply chain and manufacturing procedures. As many retailers felt the repercussions of this and know the outcome of another supply chain disruption, companies may start to diversify the location of suppliers to account for the unpredictability of this disruption.
Our consumer & retail team has played a hand in acquisitions for retailers with recent engagements including:
- Acting as Exclusive Financial Advisor for TPS Holdings LLC in acquiring The Paper Store
- Acting as Exclusive Sell-Side Advisor in Champlain Capital acquiring Bee’s Wrap
Shift to e-commerce beyond just distribution
Brands that were traditionally offline continue to seek additions to bring them online as quickly as possible, and many of these partners are opportunistically acquiring brands themselves. The incredible growth in the eCommerce Aggregator space, driven both by traditional M&A activity and high-value VC investment, continues to dominate the headlines. Additionally, consumer companies continue to invest in areas like CRM and content marketing to extend the product experience and further influence consumers’ decision-making and online presence.
Consolidation focused on higher-order territories
Where M&A activity historically skewed toward product category or aisle consolidation has shifted into higher-order need-state territories and solutions. For example, owning the hand cream aisle has taken a back seat to owning a total care story, and owning healthy eating has been replaced by owning all of the lifestyle. Further consolidation is expected as many product categories and store aisles remain highly fragmented.
How to win in retail today? Be nimble and think broader
For consumer & retail companies, the ground is constantly shifting. Spiking and fickle consumer demand, supply chain snarls, inflation, and fast-evolving consumer preferences are reverberating throughout the industry. These shifts are affecting every aspect of a retailer’s business—from sales and marketing strategy to inventory and supply chain management.
What Are Consumers Looking For?
Consumers expect more from retail companies today. They demand an easy, efficient, and enjoyable experience above all else. They increasingly expect retailers to meet them exactly where they are, and to meet their expectations instantly, all while displaying a lower capacity for frustration.
“Retail is as real-time as it’s ever been. Pricing fluctuations, trip-driving behavior shifts, and demand for immediacy—especially given the normalization of same-day delivery and an endless aisle online—have forced everyone in retail to leave room in their long-term plans for adaptations and adjustments.”
– Brian Cohen, Managing Director & Head of Consumer & Retail, G2 Capital Advisors
Rather than temporary, pandemic-related changes that will revert back to normal, we believe these shifts have permanently altered the retail environment.
Against this backdrop, it is critical for consumer & retail companies to embrace a more nimble and flexible strategy. Today, long-term plans are only as good as how often you revisit them. Management teams must continuously reassess their strategy and make adjustments based on the prevailing market conditions.
Questions Retailers Should Be Thinking About
- Will inflation continue to slow, and how much further could interest rates rise?
- The Fed continues to raise rates at a slightly slower pace and has signaled its intention to continue doing so at least through the spring.
- Will a slightly slowing economy morph into a full-blown recession, and will the labor market remain strong?
- While sales and margins show signs of softening, the labor market continues to defy expectations, making it hard for the Federal Reserve to further ease the policy. Layoffs in the technology, media and real estate industries make headlines. Still, they represent a minuscule portion of the labor force, with overall jobless claims falling by 20,000.
- How much longer will pandemic-era savings and easing supply chains buttress consumer spending, and will they continue to spend more on necessities?
- While personal savings soared to nearly $6.5 trillion in 2020, they’ve since dropped to below $500 billion, lower than the $1.4 trillion pre-pandemic. Despite supply chain imbalances driving discount sales as retailers looked to shed excess inventory, consumers are focusing their budgets on food and other staples and spending less on holiday categories such as electronics, clothing, and sporting goods.
- Ultimately, is a recession inevitable, and how bad might it get?
- This remains anyone’s prediction, but for business owners, management teams, and industry leaders, any level of uncertainty should be met head-on – waiting to seek clarity can be a losing move.
How do these trends affect you?
Our consumer & retail team welcomes the opportunity to share our perspectives on today’s consumer and retail environment. We can help you revisit your strategic roadmap, including whether now is the right time to sell your business, continue to grow through acquisitions, or raise external capital. Contact us to start a conversation today or learn more about our expertise in retail.
CLIENT
Worldwide Produce (“Worldwide”) is a leading distributor of high-quality fresh fruits, vegetables, dairy products, and specialty foods to local restaurants, national chains, hotels, country clubs, entertainment venues, and catering companies in the Southern California region. Operating from state-of-the-art climate-controlled facilities in Los Angeles, California and Las Vegas, Nevada, Worldwide stocks thousands of items needed to efficiently operate a foodservice business. Worldwide also carries hard-to-find specialty items, paper goods, and cleaning supplies.
SITUATION
Long-term industry leader, Worldwide, joined forces with financial partner, Sole Source Capital (“Sole Source”) in 2019. Since being founded in 1989, Worldwide established its reputation as a premium produce provider to the Foodservice industry and experienced strong organic growth. Following its partnership with Sole Source, Worldwide’s management team were looking to further enhance their growth through a targeted M&A strategy to deepen their service and product offerings, acquire new customers, and expand geographically into new markets.
ENGAGEMENT
G2 Capital Advisors, LLC (“G2”) served as the exclusive financial advisor to Worldwide leading a bespoke buy-side effort focused on identifying and engaging with companies that have a strong market presence and operations within the produce distribution markets.
OUTCOME
G2’s mandate with Worldwide led to the acquisition of Vision Produce Company (“Vision”) which added an enhanced geographic presence, additional sales channels, deep grower relationships, and a strong talent pool. Together, Worldwide and Vision will leverage a larger geographic footprint, impressive food safety records, and expertise to deliver the highest quality of goods to their customer base.
Todd Ferguson, CEO of Worldwide Produce, commented “I’m thrilled that Vision Produce has joined the Worldwide family. The team at Vision brings tremendous experience sourcing and importing quality produce, and expertly serving their blue-chip customer base. With a location in Phoenix as well as Los Angeles, Vision’s footprint allows us to continue to expand our reach and serve customers in this key growth market.”
“We are excited for the Worldwide team on its closing of Vision Produce as this acquisition will further enhance their capabilities. Both companies are highly reputable players with long histories of success, and we are glad to have played a role in their new partnership,” said Andrew Keleher, Vice President at G2 Capital Advisors.
About Worldwide Produce:
Worldwide Produce is a leading distributor of fresh fruits, vegetables, dairy products, and specialty foods to independent and chain restaurants across the Southern California region. The company operates out of two distribution facilities located in Los Angeles, CA and Las Vegas, NV and stocks roughly 6,000 SKUs. Worldwide Produce was founded by current management in 1989 and has rapidly grown its revenue base due to its high-quality produce, superior service levels, strong sales staff, and high-quality
leadership.
About Vision Produce Company:
Established in 1980 with facilities in both Los Angeles and Phoenix, Vision Produce is a produce importer and distributor selling primarily to retail, wholesale and foodservice distribution customers in the Western United States. The Company offers a variety of fresh produce types including mangoes, limes, melons, chili peppers and more, which are sourced primarily from Mexico and South America. Additionally, Vision Produce owns Southwest Truck Brokers, a Phoenix-based freight and logistics broker primarily servicing the Western United States.
About Sole Source Capital
Founded in 2016 by David Fredston, Sole Source Capital is a private equity firm that thematically invests in fragmented, high-growth industrial subsectors. Sole Source seeks founder-owned businesses or corporate carve-outs that will benefit from the team’s operating and M&A capabilities. The Firm has a strong operating heritage that enables it to execute a buy and build strategy with significant downside protection. The Firm is headquartered in Dallas, Texas with offices in Santa Monica, California. For more information, please visit www.solesourcecapital.com or contact [email protected].
About G2 Capital Advisors
G2 Capital Advisors provides M&A, capital markets and restructuring advisory services to the middle market. We offer integrated, multi-product and sector-focused services by pairing highly experienced C-level executives with specialist investment bankers. We aspire to be the trusted advisor of choice to our clients including corporations and institutional investors.
CONTACTS ON THIS DEAL:
Peter Reed, Director, Buy-side: T: 617.918.7972 E: [email protected]
Andrew Keleher, Vice President: T: 860.748.6480 E: [email protected]
Matt Ball, Senior Associate: T: 617.918.7933: [email protected]
Aaron Levy, Senior Analyst: T: 857.250.2767 E: [email protected]