December 21, 2014

Buyouts

Deal Or No Deal


Andrew Cagnetta’s Transworld Business Brokers recently sold the Swiss Chalet Foods in Miami.
[Photo: Daniel Portnoy]

Merger and acquisition activity has been brisk in Miami-Dade County, with recent deals involving local financial service, healthcare, telecommunications and manufacturing companies. But the freefall in the housing market and turbulence in the capital markets have prompted local deal brokers to question the long-term sustainability of high prices for corporate assets in south Florida.

“There may not be enough liquidity to support the multiples paid over the last few months,” says Jonathan Awner, chairman of the corporate practice group at Akerman Senterfitt in Miami. “There are a lot of variables that could turn this M&A market on a dime.”

Recent corporate deals have spiked to multiples of 10 to 12 times cash flow versus an historical average of six to eight, Awner says. Colonial BancGroup’s purchase of Commercial Bankshares, for instance, carried a multiple of 16.3.

South Florida deals totaled $4.6 billion through mid-August, compared to $8.3 billion for all of 2006, according to M&A data from Thomson Financial. Florida companies have been net sellers. Local companies have sold $4.3 billion in assets in 53 transactions but have purchased only $1 billion in 58 deals.

On the upside, private equity groups have raised $157 billion nationally in 2007. With falling prices and greater volatility in stocks and real estate, corporate assets may be more of a compelling buy, says Andrew Cagnetta, chief executive of Transworld Business Brokers in Fort Lauderdale.

Transworld Business completed 131 south Florida transactions in the first half of 2007, compared to 115 in the year-ago period. Although he remains bullish about deal activity, Cagnetta predicts a buyer’s market for large mortgage companies and home builders.

Even with a credit crunch in the high-yield debt and bank loan sectors, the market should remain stable for traditional buyouts involving middle-market companies with annual revenue between $20 million and $300 million, says Michael Mitrione, chairman of the corporate department at law firm Gunster Yoakley.

“There are some bargains out there,” Cagnetta says.

Top 5 South Florida Targets
South Florida Company Buyer
Value (millions)
Oceania Cruises Miami Apollo Management, N.Y.
$850
Stiefel Laboratories Coral Gables Blackstone Group, N.Y.
500
Neff Corp. Miami Lightyear Fund II, N.Y.
409
Leon Medical Centers Health Miami HealthSpring Inc., Va.
355
Commercial Bankshares Miami Colonial BancGroup, Ala.
317
Top 5 South Florida Buyers
South Florida Buyer Target
Value (millions)
Citrix Systems Fort Lauderdale XenSource, Calif.
$500
Noven Pharmaceuticals Miami JDS Pharmaceuticals, N.Y.
135
Watsco Coconut Grove ACR Group, Texas
110
Terremark Worldwide Miami Data Return, Texas
106
Equity One North Miami Beach Buckhead Station, Ga.
68
Source: Thomson Financial

Tags: Miami-Dade, Banking & Finance

Digital Access

DIRECT DIGITAL ACCESS
Add digital to your current subscription, purchase a single ditgital issue, or start a new subscription to Florida Trend.

TABLE OF CONTENTS
An overview of the features and articles in this month's issue of Florida Trend.

ACCESS THIS ISSUE »

Florida Business News

Florida Trend Video Pick

Benefits management trends in Florida
Benefits management trends in Florida

David Faulkenberry, president, FBMC Benefits Management, explains what benefits most employers want to offer staff and what impact the ACA has had on public sector clients so far.

Earlier Videos | Viewpoints@FloridaTrend

Ballot Box

How do you feel about the historic decision to remodel US-Cuba relations?

  • Well, it's about time!
  • I'm cautiously optimistic...
  • I'm skeptical about this at best...
  • Not in favor at all: Keep the embargo strong!

See Results

Ballot Box
Subscribe