Laclede Gas Purchase of Missouri Gas Energy Approved

July 18, 2013 17:28 by Clayton Reeves in Cooperatives, M&A, Natural Gas, Regulation, Utilities  //  Tags: , , ,   //   Comments (0)
Yesterday, state utility regulators approved the combination of Missouri's two largest natural gas companies. The Missouri Public Service Commission unanimously sent an agreement through that allows Laclede Gas Co. to purchase Missouri Gas Energy. The combined entity will have more than 1.1 million customers. The deal prevents Laclede Gas from seeking a general rate increase in its current service area until October 2015.  However, through the MGE territory, Laclede could seek an immediate rate hike. Read the full story here.

CC Capital Advisors Steps into Bank I-bank Fray

July 18, 2013 16:41 by Jill Mortensen in M&A  //  Tags:   //   Comments (0)
CC Capital Advisors has moved into the bank M&A advisory business with the hire of Shelley Reed, a former bank and thrift investment banker at Stifel Financial Corp. [More]

The Rise of Private Public Partnerships

July 18, 2013 14:53 by Bill Conway in Capital Markets, Economy, Energy, M&A, Natural Gas, Private Equity, Regulation, Telecom, Utilities, Water  //  Tags:   //   Comments (0)
Establishing Private Public Partnerships (P3) should have the attention of many municipal organizations across the country since, even in good economic conditions, infrastructure assets are not the highest and best use of a cities limited resources. [More]

Is Venture Capital Deal Making Hitting a Bottom?

July 17, 2013 10:29 by Clayton Reeves in Capital Markets, Financing, M&A  //  Tags: , , , , ,   //   Comments (0)
The pace of VC investment has gradually decreased in recent quarters, and we continued to see that trend in the second quarter of 2013.  Only 778 deals were completed during the quarter, which would represent the second fewest since Q4 2009.  The number has been below 1,000 deals for the last year, after reaching that point through all of 2011 and the first half of 2012.  With all the bad news, is there light at the end of the tunnel? Perhaps. Pitchbook believes the Q2 numbers will increase roughly 15% to account for deals that were not captured/reported in their initial round of research.  This would put the quarter more in line with the previous three quarters.  Furthermore, capital invested 11%, reaching $7.9 billion, the highest since the same quarter last year. Now, this may be a case of finding small positives in a trend that is undeniably flat at best.  However, if VC is hitting a bottom, there is plenty of dry powder available for deals to pick back up. Read the complete report here at Pitchbook.

Telecom Industry Sees M&A Heating Up

July 16, 2013 09:42 by Clayton Reeves in M&A, Telecom  //  Tags: , , ,   //   Comments (0)
Earlier in June, there were several articles saying that telecom could be getting ready to see the biggest merger spree since 2006.  Here is a list of telecom acquisitions over the last two years.  In an article in the Kansas City Star yesterday, this school of thought was further supported. AT&T offered $1.2 billion to buy Leap Wireless International Inc., adding motivation for smaller competitors such as Sprint Corp. and Dish Network Corp. to bulk up through deals of their own.  Additionally, this offer could create a bidding war similar to what was seen with Clearwire when Sprint and Dish fought it out in a bidding battle.  Verizon may be inclined to up the bidding for Leap simply to make AT&T pay a higher multiple. Chetan Sharma, a wireless-industry analyst in Issaquah, Washington, said “Everyone below the top four is pretty much done [because of the looming consolidation], I don’t think they’ll exist beyond the next 18 months.”   Now that would be some transformational change in the telecom sphere. Read more here.

First Half of 2013: PE Deal Flow Continues to Struggle

July 11, 2013 11:59 by Clayton Reeves in Capital Markets, M&A, Private Equity  //  Tags: , , ,   //   Comments (0)
For dealmakers, 2013 was primed to be an active time with optimism returning to markets and dry powder being expended in the form of M&A transactions.  In terms of the private equity, this did not come to fruition during the first half of the year. According to Pitckbook, deal flow continued to be stagnant through June of this year. You can see below the drop in number of deals from 1,148 in second half 2012 to 738 in first half 2013.     The monthly figures are similarly stagnant.      Despite an apparent uptick in capital invested in June, the underlying numbers tell a different story.  The $23 billion acquisition of Heinz has almost singlehandedly increased the capital invested over the prior four month average. There are several reasons we might be seeing this softness.  First, many of the deals that would've been littered across the first half of 2013 were rushed to completion in the last half of 2012, for tax purposes.  Furthermore, the optimism that we expected to guide M&A recovery has also spurred increases in equity prices, thus keeping multiples high.  In an already challenging environment for buyers, this has made closing a deal even more difficult.  There is hope, however.  Some professionals are seeing increased activity during the first half of 2013, although they said that the fruits of these labors would not be seen until later in 2013. Read the rest of the Pitchbook report here.

Retail M&A Showing Signs of Life?

July 10, 2013 17:20 by Clayton Reeves in Capital Markets, M&A  //  Tags: ,   //   Comments (0)
Although year to date M&A has been sluggish in many sectors, today marks the second large deal in the retail space this week. First, grocery giant Kroger announced a definitive merger agreement with Harris Teeter. Kroger will pay $49.38 in cash in a deal that is valued at roughly $2.5 billion. Harris Teeter brings 212 stores to the table, as well as annual revenues of $4.5 billion.   Then today, OfficeMax shareholders voted overwhelmingly in support of the merger with OfficeDepot. The combined entity hopes to compete with market leader Staples, and will have revenues in excess of $18 billion. Office Depot also divested their business in Mexico for roughly 8.7 billion pesos in cash.  This will improve their liquidity position headed into the merger with OfficeMax. The activity in retail and the size of these two deals is a hopeful sign in a market that needs to build some deal momentum in the second half of the year.

Chinese Investment in the U.S. Continues to Grow

July 10, 2013 09:32 by Clayton Reeves in Agriculture, Capital Markets, M&A  //  Tags: , , , , ,   //   Comments (0)
Despite political, regulatory, cultural and geographic obstacles to Chinese firms investing in the U.S., they continue to do so at a growing rate. Chinese figures show that their investment in the U.S. grew to $9.3 billion in 2012 from $1.88 billion in 2007. U.S. figures were even more extreme, concluding that the cumulative investment jumped from $3.4 billion to $22.8 billion in the same period.  The recently proposed acquisition of Smithfield Foods by Shuanghui International for $4.7 billion would represent the largest ever acquisition of a U.S. firm by a Chinese entity. Additionally, this acquisition could represent a threat to the U.S. food supply, which has generally been more protected through regulatory issues due to national interests. With many of the food related issues that Chinese firms have faced, either in the pet or human food arena, there is concern from regulators about the acquisition of Smithfield. Regardless of how the Smithfield acquisition turns out, one fact remains: the Chinese are interested in purchasing U.S. companies moving forward and have the dry powder to do so.  It will be interesting to see how this changes the M&A landscape moving forward. Click here to read the article this post references in the China Daily.

Aqua America: A Deal Making Machine in 2013

July 8, 2013 09:30 by Clayton Reeves in M&A, Utilities, Water  //  Tags: , , , , ,   //   Comments (0)
Aqua America announced last week that it has completed acquisitions of seven water and wastewater utility systems through June of this year This includes three in NC, three in PA, and one in VA. In PA, Aqua Pennsylvania (Aqua America's PA subsidiary) acquired Total Environmental Solutions, Inc., (TESI) for $11.8 million.  TESI serves roughly 6,000 customers on both the water and wastewater side. The remaining acquisitions account for roughly 1500 people.  The assets in NC were deemed "troubled" by state regulators, and Aqua America expects to invest roughly $500,000 in their restoration. Read more about Aqua America's acquisition spree here.

Inexperience in LBO Lending: A Dangerous Game

June 28, 2013 09:49 by Clayton Reeves in Financing, M&A  //  Tags:   //   Comments (0)
Mark Gaffin at the Gaffin Group offers some solid advice on the dangers of inexperience in LBO lending.  With the current deal drought, many lenders are trying to diversify their offerings and entering into a leveraged buyout market that can be dangerous for the inexperienced.  In the article he cleverly compares LBO lending to sailboat racing; the key similarity between these two items is that with experience comes a certain confidence and ability to manage the unexpected. Mark emphasizes the fact that executing deals takes a rare combination of experience, knowledge and patience from both lenders and other deal participants.  This is something not all firms, lenders or banks are equipped with.  Click below to read the rest of this article. Click here to read the full post.

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