As a Fairfield County company took a huge buyout and another sold off a division for nearly as much, multiple studies suggested mergers and acquisition activity could pick in the fall.
Entering August, Spectris plc reached a deal to acquire Stamford-based Omega Engineering, which sells more than 100,000 process measurement and control instrumentation devices for use by varying industries and labs.
The deal follows the April 7 death of Betty Hollander, who founded Omega Engineering in 1962 and built the company into by some reports one of the largest woman-owned businesses in the nation.
Omega employs some 700 people at five manufacturing facilities and two distribution sites. The company had a $39.6 million operating profit last year on sales of $168 million. In 2010, Spectris”™ existing measurement, controls and instrumentation products produced North American sales totaling $370 million, of $1.5 billion in worldwide sales.
Spectris is based in Surrey outside London and employs 6,000 people. The company traces its history to 1915 and the launch of the Fairey Aviation Co., which manufactured seaplanes.
Omega was not the only local company to land a big deal in August. Greenwich-based Aptuit L.L.C. is selling its drug clinical trial supplies unit to Catalent Pharma Solutions of Somerset, N.J. Dwarfing both acquisitions was Google”™s $12.5 billion deal to acquire Motorola”™s mobility unit, which makes tablets, smartphones and other electric devices.
Lower corporate debt and higher profits signal a promising U.S. mergers and acquisitions market, according to KPMG International, which periodically publishes an M&A predictor study. KPMG said U.S. companies are de-leveraging faster than their overseas counterparts, with net debt projected to fall 34 percent by next June compared to 19 percent globally.
With the threat of slow growth on the horizon, corporate management may also see acquisitions as a faster way to increase top-line growth compared to what their sales staffs can produce.
“Companies have paid down their debts and have more cash on hand, which should provide them with more capacity to borrow and fund future acquisitions,” said Phil Isom, the Chicago-based U.S. leader of KPMG”™s corporate finance division.
A separate study from PitchBook noted that U.S. private equity investment activity was steady during the second quarter but fundraising showed bullishness, which could spark more deals down the road as funds accumulate capital for future deals.
