Sale of Alltel Tops List of 2007 Deals

by John Henry  on Monday, Jan. 21, 2008 12:00 am  

Windstream, the Alltel spinoff, made its first major acquisition by buying CT Communications Inc. of Concord, N.C., in May for $585 million. Windstream paid $31.50 a share in cash for the company - a 31 percent premium to CT Communications' previous 30-day trading average.

Jeff Gardner, president and CEO of Windstream, said the company will look to acquire more rural assets in the next five years.

In Arkansas, only 40 deals this year were valued at $10 million or more, slightly more than half of what was recorded the year before. But the large Alltel transaction skewed the value of those transactions.

National Picture

Nationally, deals hit a record $1.57 trillion, up 5.5 percent over 2006, according to Thomson Financial. European mergers totaled $1.78 trillion, and worldwide mergers hit $4.4 trillion last year, up 21 percent from 2006.

Most of the transactions happened in the first half of the year, before the housing bubble burst and the subprime credit concerns hit in full force.

Much of the U.S. merger volume was fueled by easily obtained debt financing, which helped private equity firms and other buyers borrow large amounts of money at attractive rates. Of course, much of that hit the wall in July as credit was tightened and borrowing became more expensive.

Some think the easy money days of the big private equity deals are through since the subprime crisis has brought the financial institutions back to earth. Other analysts, however, say that private equity will simply focus on different areas and possibly smaller buyouts, especially overseas in emerging economies.

Overlooked in the big slowdown of the huge private equity transactions in the last half of the year, down by more than 50 percent from the first six months, was the fact that corporate transactions were still strong.

Corporate deal volume reached $955 billion in the fourth quarter, accounting for 87 percent of all such volume.

Goldman Sachs Group, Morgan Stanley and Citigroup ranked as the top merger advisers for deals, according to Thomson Financial.



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