Number of Big Deals Grows in 2010

by Jan Cottingham  on Monday, Jan. 24, 2011 12:00 am  

 The climate in Arkansas for mergers and acquisitions improved last year, and the forecast is for continued recovery.

The number of big deals - those known or thought to be valued at $9 million or more - announced in the state during 2010 rose to 64 compared with 58 in 2009. And that big-deal figure of 64 doesn't include the apparently unprecedented number - 13 - of bank acquisitions involving Arkansas companies last year.

(Click here for a list of the biggest deals of 2010.)

The bank acquisitions are listed separately because though they all involved assets far in excess of $9 million, calculating their individual values is much more difficult. All the banks acquired had failed, so the FDIC, as receiver, essentially paid the acquiring financial institutions undisclosed sums to take over the distressed financial institutions.

(For the list of the biggest bank deals, click here.)

The biggest acquisition announced last year was the purchase of Baldor Electric Co. of Fort Smith by the Swiss conglomerate ABB Ltd. for $4.2 billion. (See story, Page 1.) That far outweighed the largest sale of 2009: the purchase by Little Rock's Windstream Corp. of Iowa Telecommunications Inc. for $1.1 billion. In 2009, Windstream occupied four spots in the list of top 10 high-dollar purchases.

Windstream, though not as active in 2010, stayed in acquisition mode, paying $782 million for Q-Comm Corp. of Overland Park, Kan., and $310 for Hosted Solutions LLC of Raleigh, N.C.

Wal-Mart Stores Inc. was also busy last year, working to compensate for slowing growth in the United States by buying huge international concerns, primarily grocery retailers. The shareholders of South Africa's Massmart agreed last week to Wal-Mart's $2.2 billion offer, announced in September, to purchase 51 percent of the company. The Bentonville retailer is now poised to enter the African market.

Wal-Mart, however, still sees room for grocery growth in the U.S., according to a research report released last week by J.P. Morgan analysts.

The company "continues to see plenty of opportunity to grow in the U.S. especially in dense urban markets," the report said. The report noted Wal-Mart's recent announcement of a new small-store format but predicted that the most significant small-store rollout wouldn't occur until 2013-14.

'A Fantastic Improvement'
"There was certainly a resurgence in M&A activity," said Marshal McKissack, managing director and head of mergers and acquisitions at Stephens Inc. of Little Rock. "We looked at the total U.S. markets, where we focus, and overall deal activity was up 21 percent on an announced basis.

"And if you break it down into middle-market M&A, where we spend a lot of our time at Stephens, it was up almost 50 percent, so definitely a fantastic improvement relative to 2009."



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