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About DealWire
ACG Philadelphia's quarterly M&A report, captures deal and transactional activities from around the region based on ACG Philadelphia members' and other dealmakers (investment bankers, private equity professionals, professional service firms and corporate executives).

Click here for Historical Featured Deal Summaries

Questions about DealWire Philadelphia should be directed to Jen Simons at jsimons@acg.org.
 
 
  
 


 


The latest deal news from around the region
DealWire Philadelphia, Q4 2013 Volume IX, Issue IV

 

Strong 4th Quarter Establishes a New Peak for Volume and Value
in the Region

- commentary by Jonathan Chou, Eureka Growth Capital
& ACG Marketing Committee Member

 

Summary

At the end of 2012, the deal community celebrated its best year in terms of M&A volume and value since the end of the Great Recession. Due to modest economic recovery, tax code uncertainty, and a significant amount of capital available for transactions, 2012 M&A activity reached new highs in the Philadelphia region with 864 completed transactions yielding $46.9 billion of value (compared to 729 deals worth $37.0 billion in 2011).
 
However, momentum for increased M&A deals did not carry-over into the first half of 2013 as volume remained flat when compared to the same period in 2012. Perhaps it was the lack of a strong catalyst (e.g., looming changes to taxes) to bring sellers to the table, the continued sluggish economic environment amidst political uncertainty and dysfunction, and/or simply a breather due to the heavy utilization of resources to close deals at the end of 2012, but actual M&A activity did not seem to live up to the lofty expectations of deal professionals through most of 2013.

Despite the tepid start in 2013, the ingredients for an acceleration of M&A activity remained strong – lenders appeared eager to increase loan volume and accepted higher levels of leverage in transactions; corporate buyers continued to hold record levels of cash on their balance sheet, could raise additional financing in a favorable capital markets environment, or if publicly-traded, they could use their stock as valuable currency which likely had seen significant appreciation over the last couple of years; and private equity funds had considerable capital to deploy before their investment period ended.
 
The region’s M&A activity finally started to show some signs of breaking out in Q4 2013, yielding 264 deals and $21.1 billion of value which represents highs for at least the last 24 quarters (see details below). With rising valuations and the elements for a strong M&A market still in-tact, we can hope that the strong 2013 fourth quarter is a signal of things to come in 2014 as both non-financial and financial owners of healthy companies realize it is an opportune time to pursue a liquidity event.

 

Scroll down to read more about our 31 member firms' Q4 2013 transactions as well as their new hires and promotions. 


Fourth Quarter Transaction Volume & Value - Philadelphia Region

Total regional transaction volume (comprising of M&A, Public Offerings, Private Placements, and Spin-Offs) experienced strong growth in Q4 2013 with 440 completed deals, which represented an increase of 11% over the 396 deals reached in Q3 2013. On a year-over-year basis, the fourth quarter transaction volume grew by 25% compared to the 353 deals in Q4 2012. The significant growth in volume extended across all transaction types with M&A deals up 12% and 13% over Q3 2013 and Q4 2012, respectively, and capital markets transactions up 10% and 48% over Q3 2013 and Q4 2012, respectively.

The quarter’s transaction volume set new highs in totality and within sub-segments as compared to any of the period shown in the following graphic.

 

 

Supported by heavy deal volume, the region’s transaction value in Q4 2013 reached $46.4 billion versus $33.3 billion in Q3 2013 and $31.8 billion in Q4 2012. This is the highest quarterly level since Q2 2008, when values reached $55.3 billion, and over 459% greater than the trough of $8.3 billion in Q1 2009. In particular, M&A deals in the period yielded $21.0 billion, representing a peak in terms of value and average deal size ($79.8 million) over the last 24 quarters.

 

The following graphic depicts quarterly aggregate dollar transaction volume since 2009 (dollars in billions) and shows the strong rebound from the declines experienced earlier in the year.







The following tables present the detailed quarterly transaction volume and value since 2010 for the region’s total transactions and M&A transactions (dollars in billions).





Notably, the growth in M&A transactions that the Philadelphia region experienced in Q4 2013 far outpaced the growth in M&A transactions on a national level. From Q3 to Q4 in 2013, the number of regional deals increased 12% compared to a decline of 8% for national deals, illustrating the strong interest for M&A involving companies in the Philadelphia region. This is consistent with the trend that regional transactions have comprised a bigger share of national transactions over the last several years as depicted by the following graph.

 




Annual Transaction Volume and Value – Philadelphia Region

Buoyed by a strong fourth quarter, the Philadelphia region saw 1,512 deals closed during 2013, representing an increase of 199 deals compared to 1,313 regional deals closed during 2012. The transaction value of these 2013 deals also reached $160.9 billion, up 26% over the $127.2 billion attained in 2012. Both volume and value measurements established new annual peaks for the region and significantly higher than the 2009 trough of 802 deals worth $60.2 billion. The following table presents each year’s annual total transaction value and deal count and the year-over-year (YoY) absolute and percentage change show, along with the average annual individual transaction size.





While the region’s M&A transactions produced moderate gains in 2013 versus 2012, capital market transactions surged in 2013 as the stock market had a banner year.  With 608 transactions yielding $108.7 billion of value, 2013 capital market volume and value of transactions were 49% and 70% greater than the 2008-2012 annual averages of 408 transactions and $63.8 billion, respectively.





Industry Sector Analysis

The following stack graph depicts the number of total transactions in the greater Philadelphia area across industry sectors during the past 12 quarters. 



REGIONAL QUARTERLY TRANSACTION COUNT BY INDUSTRY SECTOR (2011 to 2013) 

 

 

Consistent with previous periods, the top five industry segments (Financials, Information Technology, Consumer, Healthcare, and Industrials) comprise the majority of the region’s transactions, with over 87% of the total transaction count.  Of these top sectors, Financials and Information Technology exhibited strong year-over-year transaction volume growth at 25% and 18%, respectively.  Of note, the Materials sector also saw exceptional M&A interest in 2013, with 101 deals completed, representing a 63% increase over 2012.

 



Outlier Adjustments - Philadelphia Region


During Q4 2013, there were nine outlier M&A deals totaling approximately $39.0 billion of transaction value that were excluded from the overview provided herein. Regarding their "outlier" status, note that these nine outliers averaged $4.3 billion each, whereas the other 264 transactions included in Q4’s normalized metrics averaged $79.8 million each.


*To create a more realistic picture of the region's Total Transaction Dollar Value going forward, large outlier M&A deals will be excluded and listed within this footnote.


Source: S&P Capital IQ

AMETEK
Ametek (Bill Eginton, Paul McLaughlin, Michael Russin and Joseph Toto) completed two acquisitions in Q4.
See list of deals


Argosy Capital
Argosy Capital (Michael Bailey, Donald Charlton, Matthew Erbe, Kirk Griswold and Keven Shanahan members) led a recap in Q4.
See list of deals


Ballard Spahr LLP
Ballard Spahr LLP (Craig Circosta, Brian Doerner, Carl Fridy, Anuj Goswami, Amit Kakkar, Robert Krauss, Steven Miller and Matt Potalivo members) served as legal counsel for its clients on 19 completed transactions in Q4.
See list of deals


Blank Rome
Blank Rome (Steven Dubow, Matthew Rotenberg and Alex Tablin-Wolf members) provided legal advisory for its clients on 9 closed transactions in Q4.
See list of deals


Boathouse Capital 
Boathouse Capital (Kurt Aplan, Bill Dyer, Steve Gord, Ken Jones, Andrew Olsen and Colin Raws members) invested in one completed transaction in Q4.
See list of deals


Boenning & Scattergood, Inc.
Boenning & Scattergood, Inc. (Alex Bondroff, Charles Hull and Jim McCormick members) provided investment banking services to its clients for 3 closed transactions in Q4. 
See list of deals


CBIZ MHM, LLC
CBIZ MHM, LLC (Bill Hoffman, John Lenzi, Mark McGuriman, Sean O'Reilly, Saul Reibstein, David Stagliano, Stefania Veneziale and Gregory Watts members) provided services for 2 closed deals in Q4.
See list of deals


Corporate Advisory Solutions, LLC
Corporate Advisory Solutions, LLC (Michael Lamm member) announces the completion of its first transaction in Q4. 
See list of deals


Curtis Financial Group, LLC 
Curtis Financial Group, LLC (Jason Cunningham, Steve Economou, Ryan Hurst and  Kevin Rudd members) served as the exclusive financial advisor on one completed transaction in Q4.  The firm also promoted two employees to higher ranks.
See list of deals and promotions


Drinker Biddle & Reath LLP
Drinker Biddle & Reath LLP (Elizabeth Babson, Joshua Bernstein, William Clark, David Denious, Neil Haimm, Laura Householder, Daniel Krane, Matthew Meyers and Douglas Raymond members) served as legal counsel for its clients on 26 closed transactions in Q4. 
See list of deals


Duane Morris LLP
Duane Morris LLP (Peter Byrne, Heather Carmody, John Coogan, Richard Jaffe, Maria Rose Granholm, Darrick Mix, Kathleen Shay, Thomas Spencer, Richard Silfen, Barry Steinman and David Toner members) advised its clients on 13 finalized transactions and added 3 new attorneys in Q4. 
See list of deals and new hires


Eckert Seamans Cherin & Mellott, LLC
Eckert Seamans Cherin & Mellott, LLC (John Pauciulo member) served as counsel for its clients closing one transaction in Q4.  
See list of deals


Fairmount Partners LP
Fairmount Partners LP (Bill Burns, Bill Frame, Charles Eckert, and Richard Wainwright members) provided M&A advisory for its clients on 2 closed deals in Q4.  
See list of deals


Fesnak and Associates, LLP
Fesnak and Associates, LLP (Abraham Atiyeh, Robert Fesnak, Lisa McLemore, Joseph Pellerite and Michael Verrill members) provided services on one completed transaction in Q4. 
See list of deals


Graham Partners
Graham Partners (Joseph April, Scott Conklin, Joseph Heinmiller, Joseph May, Clemente Micara-Sartori, Robert Newbold, Andrew Snyder, Christopher Voudouris, Joshua Wilson and Marsha Zebley members) completed 5 transactions in Q4.
See list of deals


Griffin Financial Group, LLC
Griffin Financial Group, LLC (Glenn Bernabeo and John Lee members) provided M&A advisory on 10 completed transactions in Q4.  
See list of deals


Inverness Graham Investments
Inverness Graham Investments (Denis Connell, Ken Graham and Matthew Moran member) completed 4 acquisitions in Q4.
See list of deals


Janney Montgomery Scott LLC
Janney Montgomery Scott LLC (Joseph Culley, Steven Higgins, James McNaughton, Joseph Reichert, Brendan Tierney and Brian Van Der Waag members) served as investment banker for its clients closing 20 transactions in Q4.  
See list of deals


Klehr Harrison Harvey Branzburg LLP
Klehr Harrison Harvey Branzburg LLP (Patrick Murphy, Michael Rittinger and Michael Zanan member) provided legal counsel for its clients closing 5 transactions in Q4. The firm also hired an attorney.
See list of deals and new hires


LLR Partners 
LLR Partners (Christian Bullitt, Gregory Case, Vignesh Chandramouli, Kristy DelMuto, Mitchell Hollin, Zachary Sigal, David Steines and Todd Morrissey members) closed 3 transactions in Q4.  The firm also added a new operating partner.
See list of deals and new hires


McCausland Keen & Buckman
McCausland Keen & Buckman (Robert Mascioli member) provided legal counsel for its clients closing 12 transactions in Q4.  
See list of deals


Milestone Partners
Milestone Partners (Adam Curtin, Peter Elkes, Brooke Hayes, Daniel Johnson, John Nowaczyk, Daniel Ryan and Geoffrey Veale members) closed 3 deals in Q4.
See list of deals


Morgan, Lewis & Bockius, LLP 
Morgan, Lewis & Bockius, LLP (Louis Ballezzi, Tracy Dowling, David Gerson, Barbara Shander and Kevin Shmelzer members) provided legal counsel to its clients on 5 closed transactions in Q4.
See list of deals


Pepper Hamilton 
Pepper Hamilton (Steven Abrams, Bruce Fenton, Michael Gallagher, Matthew Greenberg, Christopher Miller and Keely Stewart members) provided legal advisory closing 5 deals for its clients in Q4.   The firm also added 3 attorneys.
See list of deals and new hires


Phoenix Management Services
Phoenix Management Services (Vincent Colistra, Michael Jacoby, Mark Karbiner and Michael McCauley members) promoted one of its own to VP in Q4.
See list of promotions


SSG Capital Advisors, LLC 
SSG Capital Advisors, LLC (Mark Chesen, Michael Goodman, Michael Gorman, Matthew Karlson, Terry Kohler and J. Scott Victor members) closed 3 transactions and completed one promotion in Q4.
See list of deals and promotions


Stifel
Stifel (Lauren Harrington, John Honovich, Robert Kent and Bharat Ramprasad members) served as investment banker for its clients on 6 completed transactions in Q4.
See list of deals


Stradley Ronon 
Stradley Ronon (Michael Bonner, Christopher Rosenbleeth and Todd Vanett members) served as legal counsel to its clients on 9 completed transactions in Q4.
See list of deals


Teleflex Incorporated
Teleflex Incorporated (Jan Monster, Dwayne Ritchie and John Sickler members) acquired a business in Q4.
See list of deals


Triumph Group, Inc.
Triumph Group, Inc. (Timothy Wilkin member) completed one acquisition in Q4.
See list of deals


White and Williams LLP
White and Williams LLP (George Hartnett, Michael Mentzel and Ryan Udell members) counseled its clients on 4 completed transactions in Q4.
See list of deals

  
Q4 2013 Featured Deal

For a listing of all historical featured deals please go to the LIBRARY tab.

Showcasing ACG Member Deals
 

 

Featured Deal:

Alliance Holdings, Inc. buys Markel Corporation


 

A record of nine ACG Members involved in deal!

Based on a discussion with:
Steven Higgins, Managing Director of Janney Montgomery Scott, concerning the sale of Markel Corporation to Alliance Holdings, Inc.


Synopsis
On December 4, 2013 Markel announced that it had been acquired by Alliance, effective November 1, 2013.  The process from start to finish featured a Who’s Who of ACG Philadelphia deal professionals whose names appear in green italics throughout this announcement.  Janney served as the exclusive financial advisor to Markel’s shareholders.  The Janney deal team consisted of Steven Higgins (ACG MBR), Brendan Tierney (ACG MBR), Brian Van der Waag (ACG MBR), and Ruilin Xu.  Janney was awarded the sale mandate after winning a competitive bake-off coordinated by the Company’s longtime legal counsel, Larry Laubach of Cozen O’Connor.  The Alliance team consisting of Ken Wanko (ACG MBR), John Kolla (ACG MBR) and Danielle Qi (ACG MBR) prevailed in the sales process. 

Overview of Markel Corporation
Founded in 1922 and headquartered in Plymouth Meeting, PA, Markel is a pioneer in the use of high performance fluoropolymer (PTFE) solutions to market-leading customers in the automotive, communications, environmental, and industrial markets.  The Company enjoys an attractive share in many of the niche markets where it operates.  By combining proprietary manufacturing processes and patented technology, Markel has become a valued, solution-oriented, supply chain partner to a global customer base.

Markel was family-owned and under current management had successfully (i) diversified the Company’s revenue streams, (ii) accessed new international markets, (iii) invested substantial resources in new product development, and (iv) continuously improved the profitability profile of the business.

Transaction Summary
Steven Higgins, Managing Director with Janney shared, "As we got to know the business, it became clear that in addition to valuation, identifying a suitor that understood Markel’s culture and possessed the financial and strategic resources to help the Company achieve its growth objectives would be critical shareholder considerations."

Janney conducted a broad marketing process involving both corporate and financial buyers.  Throughout the process, the Alliance team demonstrated a sincere interest in partnering with Markel management.  Alliance’s ESOP holding company structure, which would give Markel’s employees the ability to participate in the success of Alliance’s diversified portfolio of investments through their retirement accounts, also resonated with Markel’s selling shareholders.  The fact that Alliance was headquartered within a 30 minute drive of Markel’s headquarters in Plymouth Meeting, PA served as an added bonus.

Kenneth J. Wanko, President and Chief Executive Officer of Alliance commented, "Markel has demonstrated the ability to rapidly develop and adapt new technology to the changing needs of the market. In addition, Markel has the leadership, expertise, resources and equipment to support the customized needs of these markets. Alliance is excited to partner with Markel and provide its financial and strategic resources to help the company continue its strong growth trajectory."

More Noteworthy ACG Philadelphia Chapter Involvement
  • Cozen O’Connor – Larry Laubach (ACG MBR), Member, Tracy Sheridan Reyle, Member, and Jessica Alexander, Associate, served as Markel’s legal counsel
 
  • Ballard Spahr LLP - Brian Doerner (ACG MBR), Partner, Steven Miller (ACG MBR), Partner, and Amit Kakkar (ACG MBR), Associate, served as Alliance’s legal counsel
 
  • RBS Citizens Bank - Amara Briggs, Senior Relationship Manager, and Tony DeCarlo, Portfolio Manager, led the bank’s senior debt financing in support of Alliance’s acquisition
 
  • Blank Rome LLP – Heather Sonnenberg, Partner, served as counsel to RBS Citizens Bank
 
  • KPMG LLP- Scott Heery (ACG MBR), Partner and Thomas DiEnno (ACG MBR), Director, performed transaction due diligence for Alliance

Post-closing:
  • CBIZ, Inc. – Sean O’Reilly (ACG MBR), Director, performed asset valuation services for Alliance
 
  • Ellen Purdy (ACG MBR) was hired as Markel’s new Chief Financial Officer 
 
Q1 2012 Featured Deal Video Interview



Member John Nowaczyk discusses the completed Q1 2012 recapitalization of Image API, LLC by Milestone Partners. Fairmount Partners advised Image API and the transaction involved several Philadelphia-area companies.
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