Summer Intern Spotlight: Get to Know Luke Hendry

Luke Hendry joined the Normandy team at the beginning of June. In only a few weeks’ time, Luke became deeply involved with several of our buy-side projects across several different industries. In addition to supporting the team with researching and evaluating opportunities for our clients, Luke is leading the charge in identifying new software and operational tools for the firm. We are very excited to have him supporting the team for the rest of the summer.

Where did Luke grow up?
Flower Mound, Texas, northwest of Dallas and northeast of Fort Worth.

Where does he go to school? What is he studying?
Luke is a rising junior at Boston College’s Carroll School of Management. He is double majoring in Finance and Accounting and possesses a unique interest in entrepreneurship and business strategy.

Is he in any clubs at BC?
Luke is a director of the Boston College Investment Club (BCIC) where he covers Real Estate and Financials. He is also a member of the BC Cooking Club, and plays intramural basketball and volleyball.

What does he do when he is not in school or working at Normandy?
Outside of school and work, Luke enjoys spending time with his family, including his four sisters. He also flies standby almost every weekend and enjoys visiting friends and family throughout the country, particularly during the summer months. Already this summer, he has flown to Chicago, New York, Texas, Washington D.C, Kansas City, and Charlotte.

Why did he apply to Normandy Advisors?
Luke heard about Normandy Advisors from a former intern. He was intrigued by the opportunity to learn about the middle market and hear from owners about how they built their companies. He also had a strong desire to understand what drives M&A value for private equity firms and strategic buyers.

Any interesting or unique facts that few people know about him?
In a given year, Luke will probably take 40 to 50 flights on standby throughout the U.S. Also, Luke worked as a shift manager of a pizza restaurant in high school and employed several of his high school classmates and sisters.

If he could have dinner with any well-known “historical figure,” living or deceased, who would it be?
Andrew Carnegie

What is he doing next summer?
Next summer, Luke will be interning in NYC with RBC’s investment banking team. We expect Luke to come into that internship with significant knowledge about M&A and the middle market from his experience with Normandy.

Q2 2021 Market Update

Deal making activity set a record in the first half of 2021. A combined $456.6 billion worth of total deals in the U.S. closed in the first six months of the year, accounting for nearly two-thirds of all deal value recorded in 2020 (Pitchbook Q2 PE Breakdown). Likewise, add-on activity continued to increase as 74.5% of all buyouts in Q2 were add-on acquisitions, an all-time high. The buy-and-build strategy can take on different forms. Some involve large-scale roll-ups in highly fragmented markets. Others seek opportunistic M&A transactions that allow portfolio companies to pursue specific product, geographic, or operational goals.

There are many reasons for the growing interest in add-on acquisitions. In addition to the multiple arbitrage opportunity, additive deal making presents the opportunity for a platform to expand geographically, diversify its product offerings, and expand in new end-markets. When executed properly, this strategy enables a platform to leapfrog organic growth. The buy-and-build approach also increases the likelihood of a platform being sold in a sponsor-to-sponsor transaction. A company’s track record of successfully completing acquisitions under the first sponsor represents an attractive selling point to the second sponsor. Platforms may be passed between buyers focused on successively larger deal sizes, acquiring add-ons as they go.

The most popular industry for buy-and-build strategies has been financial services. In 2020, 84.8% of all acquisitions within financial services were add-ons (Pitchbook Q2 Analyst Notes). This is in line with general trends for deal making. Based on YoY deal count growth, insurance is the most active sector with 52% deal growth, followed by communications/networking (40%) and IT services (40%) (Pitchbook Quantitative Perspectives). These trends are undoubtedly persisting in 2021. Normandy Advisors has also seen strong growth and interest in the tech-enabled services space, which has, in part, been spurred by the pandemic, and represents an attractive, asset-light opportunity with the potential for margin expansion and add-on acquisitions.

In speaking with industry professionals and well over 300 business owners this year, Normandy recognizes the heightened interest in M&A from both sides of the table. The uncertainty surrounding proposed capital gains tax increases is causing some owners to rethink the timing of their succession plans. Investment banks are staffing up in anticipation of a busy second half to 2021, and middle-market PE firms are looking to act on a potential increase in acquisition opportunities. The second half of 2021 should see deal making, and specifically add-on acquisitions, continue to pick up speed as sponsors put excess capital to work market conditions incentivize transactions.

Summer Intern Spotlight: Get to Know Andrew Luntz

Andrew Luntz joined the Normandy team in early June, bringing the total number of ‘Andrews’ at the firm to three. In just a few short weeks, Andrew has added significant value to several of our retained buy-side searches, drawing on prior experience at a search fund and his strong data management skills. We are very excited to have Andrew on board for the 2021 summer.

Where did Andrew grow up?
Slingerlands, NY, just outside of Albany

Where does he go to school? What is he studying?
Andrew is a rising junior at Boston College where he is majoring in finance and minoring in philosophy

Is he in any clubs at BC?
Andrew is a director of the Boston College Investment Club (BCIC), a student-managed investment fund. Andrew works alongside other BC students to actively manage a portfolio in excess of $1M. Aside from BCIC, Andrew is involved with BC’s investment banking club and plays on the club rugby team

What does he do when he is not in school or working at Normandy?
When he is not in the office, Andrew can usually be found on the golf course with his friends. He also enjoys mowing lawns in his hometown on the weekends

Why did he apply to Normandy Advisors?
Andrew wanted an opportunity to learn about the private equity industry in a small-team environment. Having previously interned for a search fund, Andrew wanted to see another side of the private investment world and understand the role of a buy-side advisor in M&A

Any “fun facts” or unique interests we would now know unless we got to know him?
After taking a class at Boston College, Andrew developed a strong interest and appreciation for architecture and urban development. He has an impressive knowledge of Boston’s architectural history

If Andrew could travel anywhere in the world, where would he go?
Ushuaia, Argentina (also known as the ‘End of the World’)

February 2021 Market Update

The COVID-19 pandemic disrupted many aspects of the market in 2020, and private equity firms across all landscapes have been at the forefront of the changing environment. Deal volume, deal size, and fundraising all declined in aggregate in 2020. According to PitchBook’s 2020 Annual US PE Breakdown, “PE deal activity saw 5,309 deals close for a combined $708.4 billion – YoY dips of 3.4% and 7.3%, respectively.”

Much of this disruption has been witnessed within the middle market. Rookie and sophomore funds have struggled to raise new capital due to the lack of in-person due diligence, which has tended to favor the fund managers with more established relationships. However, many middle market firms have shifted to, or further focused on, add-on acquisitions, which “accounted for 72.5% of all buyouts, an all-time high” in 2020 (PitchBook 2020 Annual US PE Breakdown). This is a sensible strategy in the COVID-19 environment due to the smaller transaction sizes and decreased risk relative to new platform acquisitions.

Looking to the future, 2021 has some positive catalysts. We anticipate deal activity to increase, in part, due to a build-up of postponed transactions from 2020. We also expect total funds raised to surpass 2019 levels, assisted by a high volume of first-time funds coming to market. Much of the increase in private equity deal activity can be attributed to tightening yield spreads. Investors will look to alternative investments to capture alpha in this environment. Investors and economists expect current monetary conditions to persist through 2021.

At Normandy Advisors, we see an opportunity to build stronger platforms for our clients through add-ons in 2021. We have significant experience helping our clients grow their existing portfolio companies through M&A and are well positioned to work in this increasingly competitive market.

To learn more about how we work with private equity firms and strategic buyers, check out this page.

Intern Spotlight: Get to Know Luke Pillarella

Luke began interning with Normandy Advisors in late 2020. A quick learner, Luke has already made a positive impact on four of our retained buy-side searches, assisting with research and evaluation of acquisition opportunities, and providing us with detailed analysis of current M&A activity in the Middle and Lower-Middle Market. Despite working remotely, Luke has been actively engaged with the team at Normandy and is continuously helping us improve our research capabilities by utilizing software and data.

Where did Luke grow up?
Bethlehem, PA, former home of the Bethlehem Steel Corporation

Where does he go to school? What is he studying?
Luke is a Junior at Boston College, Carroll School of Management. He is double majoring in Finance and Accounting and pursuing a minor in Mathematics

Is he in any clubs at BC?
Luke is on the Executive Board of BC’s Investment Club, a student-managed investment fund. Luke mentors many younger students who are interested in the investing world, and he enjoys having the opportunity to manage real money. Luke also worked as a full-time manager with the NCAA Division 1 Top 50-ranked BC baseball team throughout his Freshman and Sophomore years, and currently works part-time with the team

What does he do when he is not in school or working at Normandy?
In his (limited) down time, Luke enjoys running, lifting weights, and reading. He typically reads non-fiction and recently finished reading Sapiens by Yuval Noah Harari. He is currently reading Mathew McConaughey’s memoir, Greenlights

Why did he apply to Normandy Advisors?
Luke wanted to gain exposure to the private equity space while working with a small team to learn as much as possible. He learned about the internship from a Boston College alumnus who had previously worked at Normandy

Any “fun facts” or unique interests we would now know unless we got to know him?
Luke completed Boston’s Tough Ruck in April of 2019 with a 45-pound weight on his back. He also has a strong interest in military history

What is he doing next summer?
Luke will be working as an investment banking intern at RBC. Although the internship will be remote and not in New York City as anticipated, he is excited about the opportunity to continue learning and working within the investment world