||EVENTS & NETWORKING
Pittsburgh-area mergers and acquisitions rise in 2010
Pittsburgh Business Times - by Patty Tascarella
More Pittsburgh companies and business divisions were sold last year than in 2009, according to two separate reports.
Downtown-based investment banking firm Raptor Partners LLC, which used data from Capital IQ as well as its own research to track acquisitions in the Pittsburgh area, counted 74 local deals in 2010, compared with 65 in 2009. Combined sales prices for 2010 were $5.9 billion — comparable data was not available for 2009 — and most of the local companies were bought by strategic acquirers.
In a separate study, San Francisco-based BizBuySell.com, which tracks the deals listed on its website in markets across the country, said 21 deals were completed, up from 17 in 2009. The median asking price for the year was $372,077; down from $450,000 in 2009.
“That’s a result of pricing decline,” said Mike Handelsman, group general manager at BizBuySell, where deals are mostly below $1 million. “Small business owners in Pittsburgh are pricing more aggressively, resulting in more businesses selling.”
Fourth quarter results were mixed. BizBuySell said seven deals were completed during the final three months of 2010, compared with six in 2009. The median asking price for fourth quarter 2010 was $270,000; it was $150,000 during the comparable period in 2009.
Raptor counted 10 transactions for the quarter. Of those, six disclosed financials, which came to a combined $5.69 billion. A year ago, there were 15, four of which disclosed financials, which totaled $84.61 million.
Chevron Corp.’s $5.47 billion acquisition of Atlas Energy Inc. was by far the fourth quarter’s biggest deal, boosting numbers for the three-month period far beyond a year ago. But two other transactions during the quarter also outstripped reported total dollars for the final three months of 2009 — Kadmon Pharmaceuticals LLC’s $100 million purchase of
Three Rivers Pharmaceuticals LLC and Laird PLC’s $90 million acquisition of Cattron Group International Inc.
Schneider Downs Managing Director Peter Lieberman said financial markets “improved steadily” as the year went on.
“Around the second half of 2010, the debt markets opened up pretty significantly,” Lieberman said. “The bank lenders started to re-emerge, leading to a re-emergence of private equity, narrowing the advantage strategic buyers held that probably started when the market crash happened in late 2008.”
Already, 2011 looks to be off to a strong start. Scott Mashuda, managing director of River’s Edge Alliance Group LLC, which represents companies looking to buy, said some Pittsburgh transactions dragged into 2011, in part because the extension of Bush administration tax breaks didn’t create a financial incentive to complete deals in 2010.
“A lot of deals didn’t get closed by year-end,” Mashuda said.
Demand is strong for manufacturing and distribution companies, as well as health care, Mashuda said, “but lifestyle businesses, small retail shops, are difficult to move.”
One company that has recently acquired another one is II-VI Inc., a Saxonburg-based optics manufacturer, which last month announced it was buying Max Levy Autograph Inc.
“We worked on (the) Max Levy (deal) for three years,” said Francis Kramer, II-VI president and CEO. “Although (business owners) claim they’re ready to sell, they postpone. It’s easier if you’re buying a division of a large public company.”
email@example.com | (412) 208-3832