The value of the biggest deals in Arkansas last year totaled $29.22 billion. That number reflects a robust mergers, acquisitions and investment environment in the state, but it also reflects a change in how Arkansas Business calculated deal activity.
This year we’ve included deals that involve sizable investments in a company — for example, the $4.1 billion Walmart paid in two transactions for a majority stake in Flipkart, an Indian e-commerce company, and the $700 million that Global Principal Finance and TPG Growth invested in Hybar, the steel rebar mill under construction in Osceola.
Arkansas Business previously had restricted the list of biggest deals and the total of known values of those deals to a company or investors outright buying another company or its assets.
And as in previous years, the biggest deals list includes only those deals believed to be valued at $10 million or more.
The main reason for the change is the increasing number of private equity companies in Arkansas, particularly their emergence in northwest Arkansas, a development that reflects the vast amount of available capital in the region.
One example is SymBiosis Capital Management, a venture capital firm based in Bentonville, which participated in a $100 million investment in Metagenomi, a biotechnology company in Emeryville, California, and a $50 million investment in Evommune of Palo Alto, California, another biotech company.
Another is NewRoad Capital Partners of Rogers, which describes itself as an investor in “high-growth supply chain and logistics, retail and marketing technology companies.” It appears twice on our list as an investor, participating in a $26 million investment in OGY Docs, a logistics company linked to WaveBL, based in Tel Aviv, and an $18 million investment in Tracer Labs of New York, a marketing data aggregation and reporting platform firm.
NewRoad also appeared in the No. 4 transaction, the $800 million purchase by Mars of Kevin’s Natural Foods, dba CalChef Foods LLC. The sale included the exit of NewRoad as a minority backer.
Or consider Ingeborg Investments of Bentonville, which invested in Highlight Insights, a market research platform, and Mind Body Medical Services, dba Caraway Medical Services. Olivia Walton, who is married to Tom Walton, grandson of Walmart founder Sam Walton, is the founder and CEO of Ingeborg Investments, which describes itself as focusing “on direct investments into women-led, early-stage startups.” Olivia Walton also now chairs the board of Crystal Bridges Museum of American Art in Bentonville.
The Walton Family Foundation itself appears at No. 8 on the list, participating in a $230 million investment in Skydio, a drone manufacturer in San Mateo, California.
And though we have included this $5.66 billion in investments on the biggest deals list, Arkansas Business can still make an apples-to-apples comparison of the value of the biggest deals in the state between 2022 and 2023 by restricting the 2023 total to just those deals that were outright purchases. That total was $23.56 billion, a 445% increase above the 2022 total of $4.32 billion.
$14.9B U.S. Steel Sale
Two heavyweights on this year’s list involve companies that are not headquartered in Arkansas but which have major holdings here.
Topping the list is the planned purchase by Nippon Steel of Tokyo of U.S. Steel of Pittsburgh. The value of that deal, announced in December, is $14.9 billion. U.S. Steel has helped make Mississippi County the biggest steel-producing county in the nation with its two plants, Big River 1 and Big River 2, now under construction.
Coming in second was Ohio-based J.M. Smucker’s $5.6 billion acquisition of Hostess Brands. Hostess, of Lenexa, Kansas, has a 330,000-SF manufacturing plant in Arkadelphia.
At No. 3 was Walmart’s purchase in July of a $3.5 billion stake in Flipkart, one of the largest e-commerce companies in India. In December, it made another $600 million investment in Flipkart, bringing last year’s total investment in the company to $4.1 billion.
The $290 million purchase by Alimentation Couche-Tard Inc. of Laval, Canada, of 45 Big Red Stores in Arkansas from Summerwood Partners of Bryant was No. 7 on the list.
As always, in researching the biggest deals in Arkansas, Arkansas Business finds transactions that went under the radar or discovered purchase prices that weren’t widely reported. Olympic Steel of Cleveland paid $37.8 million for Central Tube & Bar of Conway, a maker of tube and bar products for original equipment manufacturers across the mid-South. J.B. Hunt Transport Services paid $85 million for BNSF Logistics.
As is typical, real estate deals comprised a big portion of the list, including the $77 million sale of a 295-unit apartment complex on 15 acres in Rogers.
Global M&A Drops
Worldwide, merger and acquisition activity fell 17% last year compared with 2022, according to data from LSEG Data & Analytics. M&A activity in 2023 totaled $2.89 trillion, its lowest level since 2013, the firm reported.
Interest rates weighed on dealmaking, a factor cited by Marshall McKissack, who leads the M&A practice at Stephens Inc. of Little Rock. “It definitely was a tough year,” he said, citing “interest rate uncertainty, continued inflation, supply chain — there’s still some of that going on — [and] labor.
“Then you had some continued geopolitical things with Russia and Ukraine that were certainly pervasive in the mindset of people taking risks. Then Gaza and the Middle East. Those things weigh on people’s minds from a risk standpoint.”
“Financing was more challenging from a debt perspective,” McKissack said. “Early on you saw some failed banks with Silicon Valley being in the headlines, in Q1, early part of Q2, and that certainly affected lenders’ mindsets and the cost of financing. It definitely had an impact, the willingness to finance more than just the absolute cost of it. There was a big pullback in Q2 and Q3 on financing. That again contributes to a tough year.”
McKissack was referring to Silicon Valley Bank of Santa Clara, California, which collapsed March 10. Signature Bank of New York was closed down two days later.
This year is looking a little better, he said. “People in the deal business are typically optimistic,” McKissack said, but it remains “an iffy market.”
That said, “It feels like capacity in the debt market is back to some extent,” he said. “Costs are down a little bit. And [there’s] some more willingness to lend. There’s still a tremendous amount of cash on the sideline on strategic buyers’ balance sheets in private equity funds, inside family offices. There’s definitely a desire to deploy that and to create investment opportunities.”
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