Less than robust M&A activity Featured

8:00pm EDT September 30, 2013

The market is waiting on deal flow, which is the prevailing theme from seven months of less than robust M&A activity in 2013. Fundamentals are supporting a favorable exit window for sellers. Increased deal activity has not yet shown up in the data, but there is pent up demand in the market from buyers and capital providers. Debt financing appetite continues to remain robust with borrowers able to secure favorable terms as lenders compete aggressively for quality deals. All of these factors are pushing up valuations.

 

August Deal Highlights

Cleveland-based private equity firm Resilience Capital Partners and co-investor Littlejohn & Co. completed the acquisition of The Fabri-Form Co. of New Concord, Ohio. Fabri-Form is a plastic thermoformer serving the automotive, grocery and heavy-duty trucking industry.

Akron-based electrical contractor J.W. Didado Electric Inc. was acquired by Quanta Services Inc. becoming part of Quanta subsidiary PAR Electrical Contractors. J.W. Didado provides commercial, residential, industrial and high voltage electrical services. Houston-based Quanta specializes in electric, natural gas and pipeline contracting, and reported revenue of $5.9 billion in 2012.

For-profit Community Health Systems Inc. of Nashville, Tenn., acquired Akron General Health System. With the addition of the 532-bed hospital, CHS will add to its growing network of hospitals in Ohio, which also includes a total of four hospitals in Youngstown, Warren and Massillon.

 

Deal of the month

The take-private of American Greetings Corp. was completed by majority shareholders the Weiss family, led by Chairman Morry Weiss, CEO Zev Weiss, and President and COO Jeffrey Weiss, with a subsidiary of Koch Industries Inc. also making an investment. The $19.00 per share cash offer valued the company at $851 million.

Headquartered in Brooklyn, Ohio, the 107-year-old company is the nation’s second largest manufacturer of greeting cards after privately held Hallmark Cards Inc. The digital age has impacted American Greetings’ primary market of print greeting cards, which is seeing electronic greetings gain favor.

The Weiss family estimates that the company needs to spend as much as $446 million during the next five years with some of the funds earmarked to upgrade technology, according to a press release. American Greetings reported revenues of $1.87 billion in fiscal 2013.

 

Andrew K. Petryk is managing director and principal of Brown Gibbons Lang & Co. LLC, an investment bank serving the middle market. Contact him at (216) 920-6613 or apetryk@bglco.com.