Southeast M&A December 2020 - Davidson Capital Advisors
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Southeast M&A Update December 2020 Southeast M&A Update December 2020
Notable Trends in December 2020
For the month of December, deal count invested capital in December, comprising
increased 55% after a decline in November. more than 82% of total capital investment in
However, deal activity was down 14% the Southeast. Median deal size for
compared to December 2019. Capital December 2020 was $100 million, a slight
invested increased significantly compared increase compared to last month, but a
to last month but was down about 57% significant increase compared to $50 million
year-over-year. Acquisitions of HD Supply in December 2019. The median EV/EBITDA
by Home Depot and InSite Wireless Group multiple was 6.9x, a 35% decrease year-
by American Tower Corporation drove over-year.
$70B 121 YTD Capital Invested & Deal Count 130
$60B 110
106 102
$50B 88
82 80 83 90
77
$40B 73
69
65 63 64
72 58 76
70
$30B 70
66
61 50
$20B 51
40 49
42 45
30
$661M
$998M
$359M
$655M
$10B
$23 B
$31 B
$14 B
$22B
$20B
$65B
$27B
$7 B
$3 B
$2 B
$9B
$3B
$2B
$4B
$9B
$2B
$2B
$4B
$3B
$1B
$0M 10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Capital Invested '19 Capital Invested '20 Deal Count '19 Deal Count '20
Southeast M&A Update December 2020
Top 5 Associated Verticals
The top 3 active verticals in the month of Industrials 10.53%
December were Industrials; Technology,
TMT 10.53%
Media, and Telecommunications (TMT);
and Manufacturing at 10.53%, 10.53%, and Manufacturing 9.21%
9.21%, respectively. Throughout Q4, TMT Artificial Intelligence 2.63%
was the most active vertical.
Big Data 2.63%
In terms of deal count, Florida and
Georgia were the most active states, Deal Count Percentage by State
with 30 and 21 completed deals,
respectively. The largest deals of the
month occurred in Georgia and
Virginia,
Virginia, at $8 billion and $3.5 South Carolina,
15.8%
billion. These two deals accounted 3.9%
Florida,
for more than 82% of December’s
39.5%
invested capital.
North Carolina,
13.2%
Georgia,
27.6%
YTD Median Deal Size & Implied EV/EBITDA
$300M 20.0x
18.4x
18.0x
$250M 16.0x
14.6x 16.0x
12.7x 12.6x 14.0x
$200M 12.5x 12.2x 11.8x
11.7x
11.2x 12.0x
13.7x 10.4x
11.6x 10.6x
$150M 10.9x 10.0x
9.7x 9.4x 9.1x 8.4x 8.0x
$100M 7.9x 7.9x 6.9x
5.6x
7.2x 6.0x
4.0x
$50M
$13M
$115M
$108M
$273M
$100M
$49M
$12M
$67M
$39M
$60M
$37M
$49M
$22M
$34M
$63M
$20M
$17M
$37M
$32M
$22M
$75M
$87M
$93M
$50M
2.0x
$0M 0.0x
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Median Deal Size '19 Median Deal Size '20 Implied EV/EBITDA Median '19 Implied EV/EBITDA Median '20
Southeast M&A Update December 2020
Selected Southeast Transactions for December
Com pany
Deal Date Buyer / Investor Target / Issuer Verticals Deal Size
State/Province
24-Dec-2020 The Home Depot (NYS: HD)(Craig Menear) HD Supply Georgia Industrials, Infrastructure 8,000.00
23-Dec-2020 American Tow er (NYS: AMT)(Thomas Bartlett) InSite Wireless Group Virginia TMT 3,500.00
23-Dec-2020 Monocle Acquisition(Eric Zahler) AerSale (NAS: ASLE) Florida Industrials 433.00
02-Dec-2020 Gores Metropoulos(Alec Gores) Luminar (NAS: LAZR) Florida Artificial Intelligence & Machine Learning, Autonomous cars 406.00
18-Dec-2020 Wienerberger (WBO: WIE)(Heimo Scheuch) Meridian Brick Georgia Industrials, Manufacturing 250.00
28-Dec-2020 UFP Industries (NAS: UFPI)(Matthew Missad) PalletOne Florida Manufacturing 232.00
31-Dec-2020 Gibraltar Industries (NAS: ROCK)(Bill Bosw ay) TerraSmart Florida CleanTech, LOHAS & Wellness 228.20
18-Dec-2020 Novozymes (CSE: NZYM B)(Ester Baiget) Microbiome Labs Florida Manufacturing 125.00
21-Dec-2020 Clear Link Technologies(Theodore Roxbury) The Penny Hoarder Florida 102.50
17-Dec-2020 Opes Acquisition(Ophir Sternberg) Burgerfi (NAS: BFI) Florida 100.00
17-Dec-2020 SPS Commerce (NAS: SPSC)(Archie Black) Data Masons Florida 100.00
09-Dec-2020 Hub Group (NAS: HUBG)(David Yeager) NSD Virginia Industrials 94.50
09-Dec-2020 Ro (Other Healthcare Technology Systems) Preboost Florida 20.00
10-Dec-2020 CleanSpark (NAS: CLSK)(Zachary Bradford) ATL Data Center Georgia Cryptocurrency/Blockchain 19.40
22-Dec-2020 Firstsource Solutions (BOM: 532809)(Sanjiv Goenka) PatientMatters Florida FinTech 13.00
17-Dec-2020 Axios (Publishing)(Jim VandeHei) Axios Charlotte North Carolina 5.00
16-Dec-2020 Transcat (NAS: TRNS)(Lee Rudow ) BioTek Services Virginia Life Sciences 3.50
01-Dec-2020 Ark Restaurants (NAS: ARKR) Blue Moon Fish Company Florida 2.75
04-Dec-2020 Gfinity (LON: GFIN)(John Clarke) Epicstream North Carolina 0.50
01-Dec-2020 Baldw in Risk Partners (NAS: BRP)(Trevor Baldw in) AHT Insurance Virginia
02-Dec-2020 FLIR Systems (NAS: FLIR)(Roger Wells) Altavian Florida AgTech, Industrials, Manufacturing, Robotics and Drones
21-Dec-2020 ProGreen International(Jeremy Jenkins) Artificial Artisans Florida
21-Dec-2020 Flaharty Asset Management(Shon Flaharty) AWA Investment Advisors Florida
07-Dec-2020 NAES(Norman Escover) Bay4 Energy Services Florida
21-Dec-2020 IES Holdings (NAS: IESC)(Jeffrey Gendell) Bayonet Plumbing, Heating and Air-Conditioning Florida
Southeast M&A Update December 2020Transactions Highlights in December
HD Supply (Georgia)
In late December, Home Depot completed
the acquisition of HD Supply Holdings, Inc.
for around $8 billion. HD Supply offers
maintenance, repair, and operations (MRO)
products predominantly to the hospitality
industry. This acquisition is expected to
position Home Depot as a premier provider
in the MRO space, which is estimated to be
worth about $55 billion.
InSite Wireless Group (Virginia)
On December 23, American Tower
Corporation, one of the largest real estate
investment trusts (REIT), completed the
acquisition of InSite Wireless Group for $3.5
billion. With 5G capabilities rapidly
accelerating, this move adds about 3,000
telecommunication sites to American
Tower’s portfolio of communication-related
real estate.
AerSale (Florida)
On December 23, a merger between Aersale,
provider of aftermarket services and
products to large jet manufacturers, and
Monocle, a special purpose acquisition
company, was completed for about $433
million. The newly combined company is
now trading on the Nasdaq Capial Marker
under the ASLE ticker. Aersale plans to use
cash from the merger to expand upon an
asset purchase program and bring an
enhanced flight vision technology called
AerAware to market.
Southeast M&A Update December 2020Notable Trends in Q4
$100B YTD Capital Invested & Deal Count 310
275
274 260
$80B
207 220 235
210
$60B 195
160
$40B 154
143
110
$20B
60
$34B $27B $12B $8B $93B $4B $41B $39B
$0M 10
Q1 Q2 Q3 Q4
Capital Invested '19 Capital Invested '20 Deal Count '19 Deal Count '20
In the fourth quarter of 2020, deal count In Q4 of 2020, more than 8 times as much
continued to bounce back. M&A activity capital was invested compared to Q3.
increased 27% from Q3 to Q4 as corporate However, compared to Q4 of 2019, capital
and private investors pursued deals that invested slightly decreased by about 5%.
increased scale and scope. However, the 195 The largest deal of the quarter was Morgan
deals completed in the quarter is a 17% Stanley’s acquisition of E*TRADE for $13
decrease compared to the same quarter last billion. Three transactions in the Southeast
year. exceeded a $4 billion deal size. These four
transactions comprised 64% of the total
capital invested in the quarter.
YTD Median Deal Size & Implied EV/EBITDA
$120M 16.0x
14.6x
14.0x
$100M 13.7x 11.7x
11.2x 12.0x
$80M
10.0x
9.1x
$60M 9.1x 8.4x 8.0x
7.9x
6.0x
$40M
4.0x
$20M
2.0x
$60M $37M $20M $37M $49M $22M $87M $100M
$0M 0.0x
Q1 Q2 Q3 Q4
Median Deal Size '19 Median Deal Size '20 Implied EV/EBITDA Median '19 Implied EV/EBITDA Median '20
Southeast M&A Update December 2020Transaction Highlights Q4
E*TRADE (Virginia)
On October 2, Morgan Stanley announced
they completed the acquisition of E*TRADE
for $13 billion. The two companies agreed
on the deal in February 2020. As previously
agreed between the two, the $13 billion
transactions were all made in stocks.
Morgan Stanley paid $58.74 a share in stock
for E*TRADE, at a premium of 30.7 percent
to the last closing price of E*TRADE shares.
Additionally, shareholders of the discount
brokerage will receive 1.0432 Morgan
Stanley shares for each share.
AskBio (North Carolina)
On October 26, Bayer became the latest
pharmaceutical company to join the gene
therapy club when they acquired Asklepios
BioPharmaceutical (AskBio) for $4 billion.
AskBio was cofounded in 2001 by gene
therapy scientist Jude Samulski and life-
science attorney Sheila Mikhail, chief
scientific officer and CEO, respectively. The
company was based on Samulski’s
pioneering work 40 years ago when he
engineered adeno-associated viruses
(AAVs) as vessels for delivering DNA into
cells.
Southeast M&A Update December 2020Advanced Disposal (Florida)
Advanced Disposal Services was acquired
by Waste Management for about $3 billion,
as the top waste management services
provider looks to expand its footprint in the
eastern United States. The offer of $33.15
represents a premium of about 22 percent to
Advanced Disposal’s closing price of $27.14
before the transaction, making this Waste
Management’s biggest acquisition in more
than nine years. The acquisition is expected
to generate more than $100 million in
savings and capital expenditures annually
after close.
OneWeb (Virginia)
The government of the United Kingdom of
Great Britain and Northern Ireland (the
U.K.) acquired the U.S. and U.K. -based
company OneWeb, which filed for
bankruptcy in March 2020 after failing to
attract enough capital and customers for its
planned internet satellite constellation and
operating in a high debt-to-income ratio.
The overall deal is worth $1 billion USD,
with the U.K. government and Bharti
Enterprises Ltd. (an Indian-based company
with an operational arm in the U.K.) each
committing $500 million USD to the
acquisition deal. They buy-out closed at the
end of the year and will represent a 90%
overall stake in OneWeb, with the
organization’s original investors
maintaining a 10% share.
Southeast M&A Update December 2020Selected Transactions Q4
Com pany
Deal Date Buyer / Investor Target / issuer Verticals Deal Size
State/Province
02-Oct-2020 Morgan Stanley (NYS: MS)(James Gorman) E*Trade Virginia TMT 13,000.00
24-Dec-2020 The Home Depot (NYS: HD)(Craig Menear) HD Supply Georgia Industrials, Infrastructure 8,000.00
26-Oct-2020 Bayer (ETR: BAYN)(Werner Baumann) AskBio North Carolina Life Sciences 4,000.00
23-Dec-2020 American Tow er (NYS: AMT)(Thomas Bartlett) InSite Wireless Group Virginia TMT 3,500.00
30-Oct-2020 Waste Management (NYS: WM)(James Fish) Advanced Disposal Florida CleanTech, Climate Tech, Industrials, Infrastructure, TMT 2,800.00
16-Oct-2020 Paya (NAS: PAYA) Georgia FinTech, TMT 1,300.00
20-Nov-2020 Bharti Airtel (NSE: BHARTIARTL)(Sunil Mittal), Government of UK(Alok Sharma) OneWeb Virginia Space Technology, TMT 1,000.00
05-Oct-2020 KBR (NYS: KBR)(Stuart Bradie) Centauri (Virginia) Virginia Industrials, TMT 827.00
02-Nov-2020 Pinnacle Bankshares (PINX: PPBN)(Aubrey Hall) Virginia Bank Bancshares Virginia 703.00
30-Oct-2020 Bank Bradesco (BSP: BBDC3)(Octavio de Lazari) Bac Florida Bank Florida 500.00
23-Dec-2020 Monocle Acquisition(Eric Zahler) AerSale (NAS: ASLE) Florida Industrials 433.00
15-Oct-2020 Tattooed Chef (NAS: TTCF)(Sam Galletti) Forum Merger II Florida 420.00
02-Dec-2020 Gores Metropoulos(Alec Gores) Luminar (NAS: LAZR) Florida Artificial Intelligence & Machine Learning, Autonomous cars 406.00
30-Nov-2020 Aphria (TSE: APHA)(Irw in Simon) Sw eetWater Brew ing Company Georgia Manufacturing 300.00
18-Dec-2020 Wienerberger (WBO: WIE)(Heimo Scheuch) Meridian Brick Georgia Industrials, Manufacturing 250.00
28-Dec-2020 UFP Industries (NAS: UFPI)(Matthew Missad) PalletOne Florida Manufacturing 232.00
31-Dec-2020 Gibraltar Industries (NAS: ROCK)(Bill Bosw ay) TerraSmart Florida CleanTech, LOHAS & Wellness 228.20
28-Oct-2020 Infosys (NSE: INFY)(Ravi S.) Blue Acorn iCi South Carolina TMT 125.00
18-Dec-2020 Novozymes (CSE: NZYM B)(Ester Baiget) Microbiome Labs Florida Manufacturing 125.00
21-Dec-2020 Clear Link Technologies(Theodore Roxbury) The Penny Hoarder Florida 102.50
17-Dec-2020 Opes Acquisition(Ophir Sternberg) Burgerfi (NAS: BFI) Florida 100.00
17-Dec-2020 SPS Commerce (NAS: SPSC)(Archie Black) Data Masons Florida 100.00
09-Dec-2020 Hub Group (NAS: HUBG)(David Yeager) NSD Virginia Industrials 94.50
03-Nov-2020 Realtime Electronic Payments (NAS: RPAY)(John Morris) CPS Payment Services Georgia 93.00
24-Nov-2020 Pacific Architects and Engineers (NAS: PAE)(John Heller) Metis Solutions Virginia 92.00
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