LOCAL ECONOMIC SNAPSHOT | MERGERS AND ACQUISITIONS 2012

Lets make a deal, if the price is right

By KAREN ROBINSON-JACOBS
Staff Writer krobinson@dallasnews.com

By KYLE ALCOTT
Staff Artist kalcott@dallasnews.com

A billionaires buying ketchup, a computer whiz reclaims his offspring and North Texas is slated to become home to the worlds largest airline. The surge of mergers and acquisitions announced this month, including deals involving Heinz, Dell and American Airlines, tally more than $140 billion, according to data compiled by Bloomberg. The corporate version of Black Friday is actually an extension of the red-hot buying and selling pace seen at the end of last year across the nation.

Top ve 2012 Texas deals public and privately held companies

In the Lone Star State last year, pent-up demand, friendlier lenders and alluring Texas properties led to a 22 percent jump in merger and acquisition deals, to 427 transactions, according to Mergermarket, which tracks the deal makers. Measured in dollars, energy deals still rule the day, fueled by $100-a-barrel oil, an explosion in production and the birth of new elds. Target: Phillips 66 Target: Plains Exploration & Production Co. Target: MetroPCS Communications Inc.

2011 top ve deals in North Texas

(Privately held companies)

Target: Silverleaf Resorts Inc. $510 million Suitor: Cerberus Capital Management LP Target: DataBank Holdings Ltd. $110 million Suitor: Avista Capital Holdings LP Target: Uncle Julios Corp. $100 million Suitor: J.H. Whitney & Co. LLC

$20.8 billion
Suitor: Conocophillips Co. (shareholders)

$10.8 billion
Suitor: Freeport-McMoRan Copper & Gold Inc.

$7.8 billion
Suitor: T-Mobile USA Inc.

Target: EP Energy Corp.

$7.2 billion
Suitors: Multiple*

Target: **El Paso Natural Gas Co. and Tennessee Gas Pipeline Co. LLC

Target: JP Energy Partners LP $100 million Suitor: ArcLight Capital Partners LLC Target: FUNimation Entertainment Ltd. $24 million Suitor: Investor Group including CEO Gen Fukunaga

$6.2 billion
Suitor: Kinder Morgan Energy Partners LP **50% stake

*Apollo Global Management LLC; Riverstone Holdings LLC; Access Industries; and Korea National Oil Corp.

Where the deals are

In terms of the deal count, 2012 was the best year for merger and acquisition activity in Texas since the pre-recession tally of 433 deals in 2007. Last year, four business segments accounted for 73 percent of the deals energy, industrials, technology and business services. 2012 TEXAS BREAKDOWN VALUE
Energy, mining and utilities $91.1 billion Financial services $3.8 billion Real estate $1.4 billion Consumer $2.2 billion

2012 top ve deals in North Texas

(Privately held companies)

Target: Motel 6 $1.9 billion Suitor: The Blackstone Group Target: NGP Energy Capital Management $424 million Suitor: Carlyle Group Target: Fogo de Chao Holdings LLC $400 million Suitor: Thomas H. Lee Partners
Industrials and chemicals: 80 Business services: 45 Financial services: 31 Pharma., medical and biotech: 26 Transportation: 10 Technology and telecom: 52 Consumer: 21 Construction: 15 Leisure: 10 Real estate: 3 Agriculture: 1

Pharma., medical and biotech $1.2 billion Business services $1.7 billion Transportation $1.5 billion Agriculture $750 million Leisure $701 million Construction $366 million

Industrials and chemicals $15.3 billion

Technology and telecom $12.3 billion

VOLUME (number of deals)

Energy, mining and utilities: 133

Target: Denbury Resources Inc. $155 million Suitor: TPG Capital Target: Silver Creek Oil & Gas LLC $100 million Suitor: Crestview Partners LP

SOURCES: PrivCo; Mergermarket; Dallas Morning News research

The bottom line

There were a lot of folks who put off any strategic change decisions in 08, 09 because of the uncertainty. So youve got a pipeline thats very full of potential sellers. And theres a lot of interest in Texas as a place where the economy is growing. The biggest private equity deals in North Texas were larger in 2012 than 2011 primarily because debt, borrowing for deals, began to become more freely available in the junk bond and corporate bank loan markets. Borrowing for private equity deals was difcult or costly for much of 2011. Experts expect to see more large deals in 2013 in North Texas, thanks in part to the increased availability of debt. Also, private equity funds have more than $100 billion in dry powder, or uninvested capital, theyll need to put to work soon.

Chad Watt, Texas regional reporter, Mergermarket, a division of The Financial Times

Sam Hamadeh, chief executive ofcer, PrivCo: Private Company Financial Intelligence

Karen Robinson-Jacobs, staff writer, The Dallas Morning News