Middle Market Growth Conversations

Christopher Gavigan is co-founder and chief purpose officer for The Honest Company, the baby, home and beauty products company he started in 2012 with actress Jessica Alba. On the podcast, Gavigan discussed his experience running a wellness brand, including building trust with customers, recovering from product recalls and reputation challenges, and competing at a time when consumer goods giants are pivoting toward healthy and safe ingredients. Gavigan also talked about his latest venture, Prima, a wellness brand focused on the benefits of CBD and hemp, and what his role at The Honest Company looks like today. To listen to past podcast episodes and read about the latest trends in the middle market and M&A, visit middlemarketgrowth.org.

Martin Okner, president and chief operating officer of dpHUE, sat down with MMG during the Association for Corporate Growth's InterGrowth conference to talk about the evolution of the beauty industry and how dpHUE's robust digital strategy is helping the company compete in today's market. Okner, who will step into the role of ACG Global board chairman in September, described dpHUE's business model and products, which help customers who color their hair maintain and boost color between salon visits. Okner also shared some of the innovative ways the company is leveraging technology, including an app for salon professionals to order products for their clients while earning a commission, and dpHUE House, a content studio in Los Angeles frequented by celebrities and other influencers. Read more about the "Age of Micro Beauty" in Okner's 2017 article, referenced on the podcast: https://www.linkedin.com/pulse/age-micro-beauty-martin-okner/ To read more about trends in the middle market, visit our website, middlemarketgrowth.org.

The Association for Corporate Growth's membership includes roughly as many corporate members as private equity, and a number of them are involved in the function of corporate development. As part of its efforts to help corporate development officers build their networks and share best practices, ACG will host its inaugural Strategic Acquirer Summit on Nov. 4-5, 2019 in Dallas. On this episode of the podcast, ACG Global board members Brent Baxter, a managing director with Nolan and Associates, and Aaron Polack, head of business development at Lion Equity Partners, discussed the role of corporate members within ACG, corporate programming at the local ACG chapter level, and what attendees can expect from the upcoming summit. To learn more about the Strategic Acquirer Summit and the criteria to attend, visit acg.org/events/strategic-acquirer-summit.

Kevin Depew, RSM's deputy chief economist and industry eminence program leader, spoke with MMG about the economic outlook for middle-market businesses and how they're responding to tariffs, technological change and a tight labor market. During an interview on June 19, Depew discussed recent developments in the United States' trade dispute with China, the industries that will be most affected, and how middle-market companies are adapting. RSM recently published its latest US Middle Market Business Index, and Depew discussed some of the key findings, including the positive outlook of executives in Q2. In the index, RSM noted a concern that the middle market is not in a position to make investments for the future, such as training for the modern workforce. Among the obstacles is the overwhelming number of options of new technology offerings and vendors, which many middle-market companies lack the resources to evaluate. To read the latest RSM US Middle Market Business Index, visit https://rsmus.com/economics/rsm-middle-market-business-index-mmbi.html To read more about trends in middle-market private equity investment, visit our website, middlemarketgrowth.org.

Whit Matthews, senior investment director at Aberdeen Standard Investments, sat down with MMG on the sidelines of the Association for Corporate Growth's InterGrowth conference to talk about what his firm looks for when selecting GPs to work with and some of the common missteps he sees private equity firms make during succession planning. During the conversation, he also described his firm's relationship with independent sponsors, and he commented on some of the broader fundraising and investing trends he's watching. To read more about trends in middle-market private equity investment, visit our website, middlemarketgrowth.org.

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.