Mergers Slow in August

0

Local mergers and acquisitions remained in summer doldrums in August, with only 67 deals worth an estimated $4.4 billion, according to data compiled for the Business Journal by Minneapolis-based investment firm Goldsmith Agio Helms.


That’s down from July’s 81 deals worth $4.7 billion and way off the torrid megadeal pace for June with its $20 billion in transactions. It’s even slightly below the August 2005 level of 75 deals worth an estimated $4.7 billion.

Of course, such slowing is typical in summertime, when dealmakers go on vacation. And these comparatively low numbers may be masking a more robust deal climate beneath the surface that could reassert itself as the year draws to a close.


“Our deal pipeline is as large as it’s ever been,” said Ed Villeneuve, managing director at Goldsmith Agio Helms. “We expect the pace of announced deals to pick up as we head into 2007.”


Historically low interest rates and loads of private equity dollars looking for companies in which to invest are driving this deal climate.


So far, though, consumer spending has remained strong, and that’s driven interest in deals involving retail products. Indeed, the largest local deal in August involved Boston-based private equity firm Berkshire Partners LLC and Los Angeles-based investment firm Freeman Spogli & Co. paying $1.2 billion for Dulles, Va.-based N.E.W. Customer Service Cos. Inc., which provides extended service plans for consumer products.


Another big consumer-oriented deal occurred when Boca Raton, Fla.-based Sun Capital Partners bought up Real Mex Restaurants of Cypress, with the $400 million deal negotiated out of Sun Capital’s West Los Angeles offices. The Real Mex chain includes such local icons as El Torito and Acapulco Mexican Restaurants.

Previous article ESPN Pulls Plug on Cellular Network
Next article Cecilia Wilkinson, Investor Relations Expert, Dies at 57
Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

No posts to display