October 14, 2014
After years of lying fallow, the mergers and acquisitions (M&A) area of the US starts to see a significant improvement.
During the first four months of 2013, M&A deals have consummated $402 million in total, which is a massive 66% increase from $242 billion during the same period of the previous year.
However, some analysts believe that while the M&A in the USA has received a major boost and the total number of deals has increased significantly, only a few mega deals have taken place, including the purchase of the food processing company H.J. Heinz in Februrary 2013 by Berkshire Hathaway Inc. for $28.4 billion and the $29.8 billion leveraged buyout (LBO) of the reputed PC manufacturer Dell.
“Buffet will study these companies for years and years,” said Roger Aguinaldo, the Managing Director of Forest Hills Capital Management. “If and when he can get the company at the right price, he’ll say, ‘We’re buying.’”
According to Aguinaldo, Buffet is a perfect candidate for taking over Heinz, as the products of the food processing company “continue to generate tremendous cash flow.”
GREENWICH, August 15,2014
Metropoulos continues to seek buyers, as it attempts to sell its iconic beer brand, called “Pabst Blue Ribbon,” which it acquired from Calif-based Kalmanovitz Charitable Foundation back in May 2010, for a reported $250 million.
However, the price of Pabst is even higher this time, as it has been burdened with debt and its total investment is down significantly. As a result, the private equity firms might have to be certain about its viability before approaching with an offer.
“It seems that this sub-par brand is asking for too much money,” said Roger Aguinaldo, the Managing Director of Forest Hills Capital Management, a private equity firm. “It doesn’t seem they have many growth options. Companies that command nine times multiple or better are growing at least 15 to 20 percent per year and have many growth opportunities. Pabst has negative growth at 3.8 percent per year, reading decreasing sales.
Aguinaldo states that Pabst might require such a dynamic team that can help the company to achieve the desired level of growth with the injection of creativity and the execution of the development strategy effectively.
“An acquirer would probably be expected to inject this growth,”he said. “But that acquirer is not going to pay twice for that growth – once to the seller and again when it owns the company and needs to inject capital to execute upon that growth plan.”
GREENWICH, July 2, 2014
Brynwood Partners VII, a Greenwinch-based private equity fund, purchases Nestle’s Juicy Juice, a pioneer brand in the 100 percent juice category, through its new company, called Harvest Hill Beverage Co.
Juicy Juice has been Brynwood’s sixth acquisition of a Nestle USA owned endeavor in its 30-year history. More significantly, it has been the company’s third purchase of a Nestle USA business in the last 14 months.
Juicy Juice was acquired by Nestle in 1986. But its share has been declining continuously. According to the Wall Street Journal, its share value dropped to 3.9 percent, which is a significant decrease from 4.6% in 2011.
Roger Aguinaldo, the Managing Director of a private equity firm Forest Hills Capital Management, calls Juicy Juice as a deprived brand being a small part of Nestle’s huge business.
However, Aguinaldo mentions that Brynwood can concentrate on Juicy Juice by investing resource effectively. It might transform it into a highly successful business.
June 6, 2014
The architectural coating business of PPG Industries of North America has purchased Painter’s Supply, a Bridgeport based independent provider of architectural paint.
The deal had been announced on Monday, June 2. However, both the companies refused to reveal the financial term of the agreement.
In addition to Painter’s Supply, PPG is also buying Homax, a provider of aerosol drywall and ceiling texturing applications, from Olympus Partners as announced on Thursday, June 5.
In April 2014, PPG’s architectural coatings declared that it had been planning to re-brand its own paint stores and expand the business through independent paint distributors.
“They’re going vertical. It’s a strategy that makes sense. They want to own the brand,” said Roger Aguinaldo, the Managing Director of Forest Hills Capital Management.
Aguinaldo added, “This is a way for them to get in front of painting contractors.”
May 14, 2014
General Electric purchases Wurldtech, a Vancouver, British Columbia-based company specialized in cyber security technology.
With the purchase of Wurldtech, General Electric is looking to emerge as a strong advisor in the field of water and electric security system, which is a commanding factor in the US economy.
However, due to retaining its own brand name and being an affiliate, Wurldtech would not be called as a division of General Electric, as stated by Forest Hills Capital Management’s Managing Director Roger Aguinaldo.
“They would be owned 100 percent by GE,” said Aguinaldo, “but they would not be totally integrated into all of GE’s back offices.”
November 28, 2012
While the shoppers might be planning to spend extra money incautiously to purchase new things, the companies are becoming more cautious to acquire businesses.
In 2012, 10,346 mergers and acquisition deals take place in the US, which has a value of $859.2 billion. Despite the number of deals has been enhanced by 9%, the value has declined significantly by 8%.
According to Roger Aguinaldo, the Managing Director of Forest Hills Capital Management, the decayed activity highlights the unwillingness of the companies’ CEOs in investing their $985 billion in cash to take an opportunity of growing their endeavors by taking the risk of acquiring other businesses.
Despite some people predicts that the situation will be improved in December, as the sellers prepare to fix their tax rates before possible enhancement, Aguinaldo doesn’t seem to be hopeful. He says, “Companies are taking a moment to see what’s going on. It’s like a long pause.”
June 19, 2012
Greenwich based private investment firm Clearview Capital Fund II LP continues to purchase new companies, as it acquires sport shooting manufacturer Battenfeld.
Established in 2000, Battenfeld manufactures shooting accessories under different brands, including Tipton Gun Cleaning Supplies and Caldwell Shooting Supplies. At present, there are 40 employees working in the company.
Clearview owns a wide range of businesses, including Hillsdale Furniture LLC, Pyramid Healthcare and All Tech Inspection Inc. According to the Managing Director of Forest Hills Capital Management Roger Aguinaldo, the acquirement of Battenfeld is a new opportunity for the Greenwich based firm.
Aguinaldo said, “Clearview’s interest is to increase profitability as well as increase equity value of the company so the owners realize a return on their investment.” He added, “Their desire is to buy companies in which they can invest and grow. It looks like they feel it’s a good investment for them. Their involvement in this is backing the management and providing capital and resources.”
July 25, 2006
Nashville based HCA is being purchased by a group of investors, as the company agrees with an acquisition deal worth of $20.8 billion.
The acquirement has been made by a group of three buyout companies, including Bain Capital, Kohlberg Kravis Roberts (KKR) and Merril Lynch Global Private Equity.
Being established in 1968, HCA has become the largest hospital operator in the USA. However, at present, the company is struggling with declining earning growth.
The private equity firms have emerged as financial powerhouses. Roger Aguinaldo, the Managing Director of Forest Hills Capital Management, states that the private equity firms significantly depend on the financial deals from banks, who are always keen to provide money to the companies with a proven track record.