Happy New Year!
Last year M&A activity increased in leaps and bounds in most areas around the world. From Latin America, to the Asia Pacific, to North America, new deals were announced with more regularity and at higher valuations this past year than any time since 2007.
M&A truly returned in 2011; in many regions, we saw transaction levels reaching all-time highs. As the economy continues to gain momentum, we expect heightened levels of M&A activity.
One major trend in the Emerging Markets was that transaction volumes approached similar levels as Developed Markets, and numerous international transactions confirmed this. Versailles Group contributed to this trend by assisting in the divestiture of Brazil’s Brapenta Eletronica Limitada to UK-based Loma Systems, a subsidiary of US-based Illinois Tool Works (NYSE: ITW). This transaction was unique by its nature and structure, and is a major indicator of the way future Emerging Market deals will be done. For more information, see the press release.
In the United States, the major M&A trend was consolidation, which has been ongoing since early 2010. Mid-sized companies are being acquired by larger competitors seeking to acquire and capitalize on their efficiencies and market shares. Versailles Group witnessed this firsthand in numerous transactions, including advising its client Kenneth Crosby, on its sale to DXP Enterprises (NASDAQ: DXPE). This transaction was a perfect example of a large, public distribution company synergistically acquiring a competitor for its market share, location, and industry-leading efficiencies. For the specifics of that transaction, see the press release .
An overall 2011 trend was that large corporations executed deals faster than ever. Versailles Group was retained by SuperMedia LLC (NASDAQ: SPMD) to divest Switchboard.com. From start to finish, this transaction was completed in 60 days. This demonstrates the fact that large corporations are more flexible and able to close transactions faster than ever in an increasingly competitive M&A environment. Our expertise allowed us to quickly link our client with multiple buyers and the deal was closed rapidly and at an excellent value.
