• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
    • Webinar Library
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » U.S. Retail, Consumer M&A Deal Volume and Value Jump Significantly in 2012, Study Finds

U.S. Retail, Consumer M&A Deal Volume and Value Jump Significantly in 2012, Study Finds

February 5, 2013
PwC

Strong retail and consumer deal activity in 2012 drove both deal volume and value up from the prior year as the number of larger deals over $1bn almost doubled. Private equity activity in the retail sector comprised nearly 40 percent of deal volume and 55 percent of deal value, and IPO volume increased 38 percent.

"While the prolonged negotiations on the fiscal cliff dampened the positive momentum heading into 2013, consumer sentiment improved significantly, and we expect retail and consumer companies to continue to use acquisitions to drive growth and adapt to the latest consumer trends," said Leanne Sardiga, partner at PwC U.S. "We expect several factors to impact the R&C deal landscape in 2013, including continued cross-border activity, additional investment by PE investors in retail, and companies continuing to expand omnichannel capabilities."

According to PwC, there were a total of 130 deals in the retail and consumer sector with values greater than $50m in all of 2012, representing $91.2bn, a 20-percent increase in volume and doubling the value seen in 2011. During the fourth quarter of 2012, deal volume and value increased 21 percent and 100 percent, respectively, to 41 deals at a total value of $26.2bn, from the fourth quarter of 2011, which PwC attributes to sellers pushing to close deals before year end.

Deal activity in the consumer space continues to be partially driven by large CPG companies selling non-core operations and brands. PwC expects the trend to continue during 2013 as CPG companies look to sell underperforming assets and reinvest in higher margin and growth products and markets.

Cross-border deal activity has remained consistent with prior year levels, representing 40 percent of deal volume and 50 percent of deal value in 2012. Asia was a leading area for U.S. investment abroad as U.S. companies continue to seek out opportunities to take advantage of the expected growth in consumer spending across the Asian economies. Internationally, PwC anticipates R&C companies to continue to invest in emerging markets, with China and Brazil being a focal point as their middle class continues to expand and their consumer economy grows.

Divestitures (excluding spin-offs) during 2012 represented 30 percent of R&C deal volume compared to 32 percent in 2011. For deals with values greater than $50m, divestiture deal volume was relatively flat compared to 2011, while deal value was up $18bn, largely driven by one major deal during the year. In addition to divestitures, the R&C sector has seen continued activity in corporate spin-offs as companies reassess their portfolios and positioning in an increasingly competitive environment. Corporate spin-offs in 2012 generally focused on realigning businesses to distribution channels or high versus low growth product segments and, according to PwC, as these companies begin to operate separately, it is expected that there will be increased M&A activity to drive growth in the re-focused business segments. Moreover, PwC expects consumer-branded companies to continue to evaluate their portfolios and divest or spin-off products.

Positive deal trends across sub-sectors

The report states that the retail and consumer sector continues to be largely driven by food and beverage transactions both in terms of deal volume and deal value. While the number of food and beverage deals decreased from 2011, total transaction value returned to historical levels seen in 2009 and 2010 from a five-year low of $7bn in 2011 to $36bn in 2012 - a 414-percent increase. Average deal size in food and beverage also bounced back and grew from $107m in 2011 to $617m in 2012 as a result of eight food and beverage mega transactions and corporate buyers' decision to more aggressively grow through acquisition.

Specialty retail, after several years of very little M&A activity, saw an increase in mid-market acquisitions in 2012 with 18 deals (with values greater than $50m) compared to less than four deals in 2011 and 2010. Also, the value of billion-dollar-plus deals more than doubled over the same periods - resulting in a banner year in terms of transaction value with approximately $14bn in disclosed deals.

Private equity continued to play a pivotal role in the apparel, footwear and accessories, and restaurants subsectors, accounting for slightly less than half of all transaction volume and nearly 80 percent of transactions valued at more than $1bn. Restaurant deals were also heavily dominated by financial buyers and PwC expects PE will continue to be active in the restaurant subsector as they see opportunities to improve operating efficiencies during the economic downturn and position for growth.

Grocery, drug, discount, and mass retailer deal volume and value saw better than average growth during the year as well. Deal volume and value for deals over $50m more than doubled over the prior year, with the volume increase driven by middle market deals (greater than $500m) and growth in deal value due to the several large deals.

Retail and consumer IPO volume during 2012 increased 38 percent compared to 2011, although IPO proceeds decreased 28 percent - mainly a result of two large IPOs in 2011 that raised proceeds of $2.2bn. Retail IPOs drove the volume growth in the R&C sector during 2012 as they doubled compared to 2011, raising $1.8bn. The number of consumer IPOs was down slightly compared to 2011 and raised $1.4bn in proceeds. Financial sponsors remained active in the sector, backing 13 and 14 IPOs in 2011 and 2012, respectively, representing $4.1bn and $1.7bn of the proceeds raised.

"A positive deals outlook for the R&C sector is expected for the year ahead as corporate cash balances remain at all-time high levels and the dry powder and low debt financing costs in private equity should contribute to on-going deal activity," added Sardiga.

Source: PwC

    RELATED CONTENT

    RELATED VIDEOS

    High-Tech/Electronics Retail
    KEYWORDS High-Tech/Electronics North America Retail retail industry growth retail supply chain Supply Chain Management Value chain
    PwC

    Manufacturers to Invest 5 Percent of Annual Revenue in Digital Solutions Over Next Five Years, Study Says

    More from this author

    Subscribe to our Daily Newsletter!

    Timely, incisive articles delivered directly to your inbox.

    Popular Stories

    • A RED AND WHITE FRITOS DELIVERY TRUCK IS PARKED IN THE LOADING ZONE OF A PARKING LOT NEXT TO AN ORANGE TRAFFIC CONE.

      Climate Change Threatens a World Without Doritos

      Global Supply Chain Management
    • A CITY SCENE AT NIGHT, WITH MANY LINES OF LIGHT RISING FROM THE GROUND

      Welcome to the World of ‘Ambient’ IoT

      Data Management (Big Data/IoT/Blockchain)
    • Managing-Supply-Chains-in-the-Face-of-Climate-Disaster.jpg

      Watch: Managing Supply Chains in the Face of Climate Disaster

      Regulation & Compliance
    • A WOMAN STANDS WITH A TABLET COMPUTER IN A WAREHOUSE, SURROUNDED BY SYMBOLS FOR SHIPPING METHODS

      Podcast | Getting the Most Value From Your Supply Chain Planning System

      Technology
    • A LARGE WHITE WALMART TRACTOR TRAILER IS DRIVING ON A FREEWAY BEHIND A PICK-UP TRUCK ONE LANE OVER.

      Walmart Unveils New Sustainability and Waste Reduction Measures

      Supply Chain Planning & Optimization

    Digital Edition

    Scb may 2023 lg

    2023 Supply Chain ESG Guide

    VIEW THE LATEST ISSUE

    Case Studies

    • JLL Finds Perfect Warehouse Location, Leading to $15M Grant for Startup

    • Robots Speed Fulfillment to Help Apparel Company Scale for Growth

    • New Revenue for Cloud-Based TMS that Embeds Orderful’s Modern EDI Platform

    • Convenience Store Client Maximizes Profit and Improves Customer Service

    • A Digitally Native Footwear Brand Finds Rapid Fulfillment

    Visit Our Sponsors

    Antuit Zebra Anvyl Brother
    Cleo Data Capture E2open
    Eva Air Enveyo GAINSystems
    Generix Geodis GEP
    GreyOrange Here Holman Logistics
    Infor Inmar Kinaxis
    Locus Robotics Logility LogistiVIEW
    Lucas Systems MCA Connect MPO
    Old Dominion OneRail Overhaul
    PartnerLinQ (Visionet) Port of Virginia Ryder E-commerce by Whiplash
    Saddle Creek Logistics SAP Shyft
    Sourcemap Tecsys TGW Systems
    Verusen Workshop
    • More From SCB
      • Featured Content
      • Video Library
      • Think Tank Blog
      • SupplyChainBrain Podcast
      • Whitepapers
      • On-Demand Webinars
      • Upcoming Webinars
    • Digital Offerings
      • Digital Issue
      • Subscribe
      • Manage Your Subscription
      • Newsletters
    • Resources
      • Events Calendar
      • SCB's Great Supply Chain Partners
      • Supplier Directory
      • Case Study Showcase
      • Supply Chain Innovation Awards
      • 100 Great Partners Form
    • SCB Corporate
      • Advertise on SCB.COM
      • About Us
      • Privacy Policy
      • Contact Us
      • Data Sharing Opt-Out

    All content copyright ©2023 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

    Design, CMS, Hosting & Web Development :: ePublishing