The Biggest Deals of 2012: Mergers, Acquisitions in Arkansas Make for a Busy Year

by Jan Cottingham  on Monday, Jan. 21, 2013 12:00 am  

“Buyers want to own businesses and sellers want to sell them,” he said. Timing “is a factor, but it may not be the only factor in getting it done. ... We weren’t advising people to buy just because of the potential that taxes would increase, and did.”

Instead, slower organic growth in the economy encourages companies to look for acquisitions in order to speed up growth. And “outliers,” companies whose growth has outstripped general growth in GDP or in their particular industries, make for very attractive acquisition targets, McKissack said.

“A tremendous amount of equity capital out there combined with a still favorable leverage environment … continues to bode well,” he said.

In Arkansas last year, the sale to Walgreen Co. of Stephen LaFrance Sr.’s drugstore chain for $438 million likely got the most local press on the M&A front, primarily because both Walgreen and Stephen L. LaFrance Holdings’ storefronts — USA Drug, Super D Drug and Med-X — are so visible.

In addition, the sale deprived the state of one of its largest private companies. LaFrance had revenue of $825 million in 2011, Walgreen said at the time the acquisition was announced.

Another high-profile deal is the plan, mentioned in January and announced in October, by Murphy Oil Corp. to spin off its subsidiary, Murphy Oil USA Inc., comprising its retail gasoline kiosks, seven product distribution terminals and two ethanol production facilities in North Dakota and Texas.

The formal announcement came after a New York hedge fund, Third Point LLC, told the energy company that it had a “significant stake” in Murphy Oil, had sought approval to increase its position and urged the company to spin off its highly profitable retail arm.

Murphy Oil took the advice, and the new company will be independent and separately traded, similar to its 1996 spinoff of Deltic Timber Corp.

Murphy’s board also authorized a special dividend of $2.50 per share for a total dividend of about $500 million and a share buyback program of up to $1 billion of the company’s shares of common stock.

The spinoff is scheduled to be complete this year, Murphy officials say.

And, in fact, Third Point filings with the Securities & Exchange Commission indicate it accumulated a significant stake in Murphy Oil last year — at least $260.5 million in shares bought between July 1 and Sept. 30, 2012.

Other deal-making of note involving Arkansas enterprises came in the health care sector, with five significant transactions each totaling an estimated $9 million or more. Those ranged from the $113 million purchase by Tennessee company Acadia Healthcare of Amicare Behavioral Centers of Fayetteville to the cancellation by the University of Arkansas for Medical Sciences of its lease agreement with Central Arkansas Radiation Therapy Institute.



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