Fourth-Quarter Deals Die Off

Mar 01, 2009 10:30 PM  By

2008 didn’t exactly end with a bang when it came to industry mergers and acquisitions; it was more like a whimper. Just seven deals went down in the last three months of the year, compared to 13 transactions during the fourth quarter of 2007.

What happened? More of the same economic challenges. M&A activity during 2008 “experienced a slowdown due to lack of financing and lack of confidence in near term results,” says David Solomon, co-CEO of New York-based investment firm Lazard Middle Market, which tracks transactions for Multichannel Merchant.

Airgas acquires Great Lakes Oxygen

When: December The facts: Airgas, a marketer of industrial gases and safety gear, purchased Great Lakes Oxygen, a distributor of gas and welding supplies. The $15 million Great Lakes Oxygen also does business as Welder’s Supply, Westside Welders Supply, Great Lakes Propane and Lake Erie Iron and Metal. Since April 2008, Airgas has completed 13 acquisitions with acquired annual revenue exceeding $200 million. The skinny: Great Lakes helps expand Airgas’ market share in the northern Ohio region, Solomon says. “It continues Airgas’ robust acquisition program, purchasing smaller regional players to build out its national network as well as to add product breadth.”

Russel Metals snaps up Norton Metal Products

When: November The facts: Russel Metals acquired Norton Metal Products through a stock purchase agreement whereby it bought 100% of the outstanding capital stock of Norton Metal Products, which is a family-owned metals service center. The Norton family has been in the steel industry since 1952, operating a general line steel distribution center in Fort Worth, TX. Norton had annual revenue of about $70 million for the 12 months ended Sept. 30, 2008. The skinny: Norton has an interesting online quoting system, says Solomon, “which may bring new technology to Russel.”

New entity buys THT Designs

When: December The facts: Country gifts, crafts and decor merchant THT (formerly Tender Heart Treasures) Designs was sold to Synergy4 Enterprises, a new corporation headed by THT’s chief financial officer, Michele K. Quinn. THT Designs had in September sold its 300,000-sq.-ft. building and adjoining land to Internet company Yahoo for $14.8 million. THT’s new ownership will keep the operation in the Omaha, NE, area and continue to offer the same products and services. It recorded $50.5 million in revenue in 2008. The skinny: “THT was sold to an insider, representing a common succession process in small businesses,” Solomon says.

Gardens Alive! adds Paragon to stable

When: October The facts: Multititle gardening mailer Gardens Alive! picked up another former BlueSky Brands title, gifts book The Paragon. Gardens Alive! bought games catalog Bits and Pieces in May, two months after parent firm BlueSky Brands shut down. Gardens Alive! includes the Breck’s, Gurney Seeds, Henry Field’s, Michigan Bulb and Spring Hill Nurseries horticultural catalogs. The skinny: Gardens Alive! founder/president/CEO Niles Kinerk says the gifts book will help round out the company’s seasonal business. He plans to relaunch the Paragon print catalog this year.