2011 is finishing with a flurry of merger and acquisition activity.
In the last three months, Jackson Brothers of the South purchased Queen City Food & Vending Inc.; Springfield Brewing Co. sold to local investors; Hiland Dairy acquired Fordland-based Memory Lane Dairy; engineering firm Mathews & Associates agreed to sell to Illinois-based Crawford, Murphy & Tilly Inc.; and two Branson hotel developers bought the 166 Auto Auction.
One local M&A expert said the recent announcements are in line with a national trend, and the activity could point to a more fully realized economic turnaround.
Steven Blumreich, president of BKD Corporate Finance LLC, a wholly owned subsidiary of national accounting firm BKD LLP, said the firm’s consulting and merger work increased more than 20 percent in 2011 compared to 2010. Based on estimates from industry analyst Pitchbook that some 2,000 to 2,500 private equity firms are holding more than $430 billion in equity, Blumreich expects 2012 could see the same kind of growth.
The Ozarks isn’t without private-equity fueled activity. Ozark-based home care software provider HealthMedX attracted investments by two private equity groups that specialize in investing in health care companies. A deal reached this month for an undisclosed amount gives Spectrum Equity Investors and Trident Capital
majority ownership of HealthMedX.
BKD has managed a number of local transactions in recent years, including McKesson Corp.’s $190 million purchase of Springfield-based McQueary Bros. Drug Co. and Empire Bank’s buyout of Citizens National Bank.
Based on recent transactions, Blumreich predicts an upswing in manufacturing.
“We (brokered a sale of) a company in Colorado that manufactures (computer numerical control) equipment that is used by other manufacturers,” Blumreich said.
“And they just had one of the best years in their history. What that told us was there were more orders from other manufacturing companies of manufacturing equipment.”
He said auto sales and durable goods sales have increased in 2011, both of which paint a positive landscape for further economic growth.
“We see a slow but steady recovery taking place,” Blumreich said, adding that recent jobs’ numbers, a lagging indicator, are starting to improve.
According to the Commerce Department, shipments of durable goods have increased five of the last six months through October and were up 1.3 percent in the month.
On Oct. 21, a pair of Branson hotel developers and car enthusiasts purchased Manheim Missouri, aka the 166 Auto Auction, and Jordan Valley Auto Repair, both on West Sunshine Street, west of South Scenic Avenue.
Tom Schaefer and Tom Keeter formed 166 Holding Co. LLC in October to purchase the Manheim facility for an undisclosed amount.
The business partners had worked in an unofficial capacity with an Akron, Ohio-based auto-auction company for the last three years to learn the trade before they discovered Atlanta-based Manheim Remarketing Inc. was selling its Springfield operation.
166 Holding Co. also is starting 166 Floorplan Express as a financing arm for area automobile dealers.
“We felt like this was a good market area for automobile sales and automobile repair,” said Schaefer, the president and CEO. “We had looked at several different dealer auto auctions around the country and really liked this area and this operation the best.”
In 30 years working in the hotel industry, Schaefer and Keeter developed or owned roughly a half-dozen properties in the Branson area, including the original Holiday Inn, a Holiday Inn Express and the Crown Plaza Hotel. Automobiles are their new love.
“It can be a financially lucrative business if run properly,” Schaefer said. “And I think we’re both just car nuts.”
Schaefer said the partners self-financed the acquisition.
Though burdened in recent years by federal regulations, Great Southern Bank’s director of commercial lending said traditional banks’ lending should begin to open up.
Kevin Baker said Great Southern’s commercial loan volume is up roughly 5 percent this year compared to 2010.
“I don’t know that it is so much because of a robust economy. … We’re experiencing growth and I think it probably has more to do with the fact that we’re in good shape and willing to lend money,” Baker said.
Great Southern Bancorp Inc. (Nasdaq: GSBC), the Springfield-based holding company for Great Southern Bank, recorded third-quarter net income of $6.5 million, a 4.7 percent increase from earnings of $6.2 million in the same quarter in 2010.
Baker said he thought those banks that have weathered the recent economic downturn are in a lending mood.
“Banks were probably a little more stringent for a couple of years there, but I would say that if you’re a healthy bank and you’ve made it through the last two or three years, you probably have a lot of cash on your balance sheet right now and so you have a lot more liquidity to lend,” Baker said. “It really isn’t that mystical.”[[In-content Ad]]
