The perfect storm for sellers in 2012 was the outlook at the end of 2011. Apparently, buyers have been slow to get on board due to lingering concerns about the economy and the European debt crisis. These buyers seem to be ready, set and waiting for this perfect storm to calm down as indicated by January’s data.
According to CapIQ, the number of closed M&A transactions in the United States (including undisclosed values) was 1,418 in January 2011 and 1,014 in December 2011. The first month of 2012 was 1,046, up slightly from December 2011 but down from January 2011. Locally, Northeast Ohio encountered the following closed M&A transactions: 44 in January 2011, 41 in December 2011 and 30 in January 2012. December and January are typically the busiest months of the year when it comes to closed deals. This historical trend would suggest that the rest of the year would be less active, but with private equity needing to invest and with high cash on hand for strategic buyers, conditions are still in place for solid deal making throughout 2012.
Local strategic buyers wasted no time announcing acquisitions in January after completing a handful of acquisitions in December 2011. TransDigm Group Inc. led the acquisitive charge within the manufacturing industry with its $750 million acquisition announcement of AmSafe Global Holdings Inc. from a group controlled by Berkshire Partners LLC and Greenbriar Equity Group LLC. AmSafe had 2011 revenue of approximately $260 million.
Within the real estate industry, DDR Corp. and Blackstone Real Estate Advisors announced the purchase of 47 U.S. shopping centers with a proposed transaction value of $1.43 billion.
Dan Gilbert completed the sports owners “trifecta” with his January purchase of the Cleveland Gladiators as part of the Arena Football League. This adds to his investments in the Cleveland Cavaliers and the Lake Erie Monsters, a minor league hockey team. Gilbert’s Cleveland sports investments, and his investment in the city’s forthcoming casino, solidifies his commitment to the future of Northeast Ohio.
Resilience Capital Partners purchased Weaber Inc., one of the nation’s leading hardwood lumber producers in Lebanon, Pa., employing more than 300 people. Meanwhile, The Riverside Co. ended 2011 with a record 29 completed acquisitions and is not stopping in 2012 as another three acquisitions were completed in January.
Albert D. Melchiorre is the president of MelCap Partners LLC, a middle-market investment banking firm. He is also a director on the ACG Cleveland board. For more information on MelCap Partners, please visit www.melcap.co. For more information about the Association for Corporate Growth, please visit www.acg.org/cleveland.
Deal of the Month
The deal of the month is awarded to TransDigm for announcing its $750 million acquisition of AmSafe Global Holdings. Nicholas Howley, TransDigm’s chairman and CEO, stated that the deal “meets our strategic, operational and value-creation criteria. … Most of AmSafe’s revenues come from highly engineered, proprietary aerospace product with substantial and growing aftermarket content.”
AmSafe is well-known for its proprietary aviation passenger seatbelts and airbags. The company’s products are on nearly all of the world’s airlines with products certified and installed on more than 90 percent of the aircraft produced worldwide. AmSafe is the first and only company to have a seatbelt airbag system installed worldwide on both commercial transport and general aviation aircraft.