By most accounts, 2011 was a down year for the average local business. It was a year marked by mediocre revenue and earnings numbers perpetuated by stagnant economic growth and at times, ineffective government leadership.
But a review of some of the biggest corporate transactions involving companies based in or with a major presence in Westchester County tells a different story.
From one of the largest lease transactions in the county”™s history to a $4.4 billion public-private venture for nanotechnology development to a half-dozen other $100 million-plus deals and investments, corporate activity helped to stabilize much of the county in 2011, one expert said.
“Certainly there were challenging times over the last couple of years not only in the Hudson Valley but in the entire country,” said Michael Oates, president and CEO of the Hudson Valley Economic Development Corp. “But I think you”™re starting to see some real strong signs that things are turning around in a positive way.”
He pointed to various commitments to Westchester and the surrounding communities by the likes of PepsiCo Inc., The Dannon Co., Acorda Therapeutics Inc., ContraFect Corp., IBM Corp. and the Linuo Solar Group Co., among others, as all being “critically important” to workers, residents and businesses here.
“Obviously small business is important but a lot of these big corporations utilize a number of companies throughout their supply chain that are small and local businesses, so when you have a big company like a PepsiCo staying there”™s a multiplier effect that happens throughout the region,” Oates said.
The Business Journal looks back to some of the biggest corporate deals of 2011:
A $4.4B nanotech investment
On Sept. 27, Gov. Andrew Cuomo was joined in Albany by representatives of IBM Corp., Intel Corp., Samsung Electronics Co., Globalfoundries Inc. and Taiwan Semiconductor Manufacturing Co. to announce a $4.4 billion joint investment in the development of nanotechnology in New York state.
The group, which calls itself the Global 450 Consortium, aims to create some 2,500 high-tech, high-paying positions throughout the state, including nearly 1,000 at IBM”™s Yorktown Heights and East Fishkill facilities.
The investment will also result in the creation of nearly 2,000 construction jobs at various locations around the state and the retention of 2,500 existing jobs in East Fishkill, Albany and Canandaigua.
IBM”™s ”˜Smarter”™ acquisitions
Between the beginning of September and the end of 2011, IBM Corp. also announced three major acquisitions totaling some $1.3 billion in support of its “Smarter Commerce” initiative.
On Sept. 9, IBM announced definitive agreements to acquire data analysis companies i2 and Algorithmics, in Cambridge, U.K., and Toronto, respectively. The Algorithmics purchase was valued at $387 million, and the i2 purchase ”“ while not disclosed by IBM ”“ was reported by the Financial Times to be worth roughly $500 million.
Then, on Dec. 8 IBM announced it had acquired analytics firm DemandTec of San Mateo, Calif., for some $440 million.
IBM has said it aims through the “Smarter Commerce” initiative to streamline business activity through targeted technology solutions.
PepsiCo keeps bottling HQ in Somers
In March, PepsiCo Inc. announced that it would keep its worldwide bottling division headquarters in Somers while expanding upon its existing facility, marking one of the largest lease deals in Westchester history.
The five-year, 540,000-square-foot lease kept Pepsi Beverages Co. in Westchester despite efforts by Connecticut officials to bring the bottler to Danbury. The deal was first reported in the Business Journal in December 2010.
A record deal for Prestige Brands
Last month, Prestige Brands Holdings Inc. of Irvington announced the acquisition of 17 over-the-counter pharmaceutical brands from GlaxoSmithKline plc for $660 million in cash.
The deal, which is the largest acquisition in the company”™s history, is expected to generate annual corporate revenue of roughly $600 million.
Prestige Brands Chief Financial Officer Ron Lombardi said in the announcement that the cash price would be structured as asset purchases, resulting in substantial tax benefits that would effectively lower the purchase price to $535 million.
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On Dec. 15, Fujifilm Holdings Corp. announced the purchase of SonoSite Inc. for $995 million to strengthen the company”™s medical imaging product line.
Fujifilm America Holdings Corp., the company”™s U.S. subsidiary, is based in Valhalla.
New R&D facility for Dannon
In September, the Business Journal reported that The Dannon Co. was including as part of its $9 million capital investment plan a new research and development facility at its Greenburgh headquarters.
The company said the roughly 9,000-square-foot Discovery and Innovation Center was designed to complement its product development division.
Linuo Solar buys IBM campus
On Sept. 23, Linuo Solar Group Co. announced it had bought IBM Corp.”™s 160-acre West Campus in East Fishkill for roughly $4.5 million and it would look to build a solar manufacturing facility on the site.
The Chinese solar company also pledged to invest $100 million over the next five years in the development of solar technology and hire 1,000 people as it brought the facility online.
