Mergers and acquisitions
It’s been a busy year for mergers and acquisitions, and next year could be even busier. Warren Henson, president and senior managing director of investment banking firm Green Manning & Bunch Ltd., said he is seeing a positive trend. “There is more capital to buy companies than there are companies to buy,” he said. “When there is more capital, the valuation levels are really good for really good businesses.”
For the first three quarters of this year, 131 deals totaling $8.93 billion took place in Colorado, according to Pitchbook, a Seattle-based research firm for private equity and research capital.
Henson said high-quality companies that are growing, have a defensible niche, a good management team and strong operating margins can demand good purchase prices.
“I think it’s a paradox,” he said. “A lot of business owners are thinking, ‘I will wait one to three years to go to market,’ and that’s their call, but now is a great time to go to market because of the supply and demand imbalance.” Also, interest rates will eventually rise, he noted, making purchases pricier.
Here are some highlights involving Colorado companies:
Vail Resorts Inc. (NYSE: MTN) acquired Park City Mountain Resort (PCMR) from Powdr Corp. for $182.5 million in cash.
The acquisition ended litigation and a lease battle involving Powdr Corp. The sale closed Sept. 11. Vail Resorts plans to connect Park City Mountain and Canyons Resort to create the largest single ski resort in the U.S. at 7,000 acres, just in time for the 2015-2016 winter season.
Camp Bow Wow, the Broomfield-based franchiser of day and overnight dog care centers, was acquired by the animal health-care company VCA Inc. (NASDAQ: WOOF).
Heidi Ganahl, CEO and founder of Camp Bow Wow, said headquarters for the 152-franchise company will remain in Broomfield, with the current 40 or so employees. She says the sale will help 13-year-old Camp Bow Wow accelerate growth. “VCA is the leader in the pet industry, so we are very excited about all of the opportunities,” she said.
Mercury Payment Systems,
a Durango-based payment technology and service company, was acquired by Vantiv Inc. (NYSE: VNTV), a Cincinnati-based provider of payment processing services and related technology solutions, for $1.65 billion.
Mercury was majority-owned by Silver Lake, an investor in technology companies. A Mercury Payment Systems spokesperson said the company expects to keep its 600 employees in Durango and its second office in Denver.
ViaWest, the Denver-based provider of data center infrastructure, cloud technology and managed IT solutions, was acquired by Shaw Communications Inc., based in Calgary, Alberta, Canada.
Shaw bought 100 percent interest in ViaWest from Oak Hill Capital Partners and other shareholders for U.S. $1.2 billion. Via-West has 27 data centers in eight Western U.S. markets. “The Shaw leadership team spent the past year evaluating our market segment and, after working with ViaWest on a possible joint venture in Canada, made the decision to pursue the company,” said Nancy Phillips, CEO and co-founder of Via-West. She added that ViaWest will remain headquartered in Denver, with its 175 employees. “Our world class employees have differentiated ViaWest and we will continue to invest in employees as we grow.”
EVOL Foods was acquired by Boulder Brands Inc. (Nasdaq: BDBD) for $48 million.
Both companies are based in Boulder. Boulder Brands, which also owns Glutino, Udi’s Gluten Free, Earth Balance, and Smart Balance, bought the frozen food company EVOL in December 2013 from founder Phil Anson and a group of investors. EVOL’s 25 employees stayed with the new parent company. “Boulder Brands wanted our team of such great people,” said Anson, who is now senior vice president of frozen foods for Boulder Brands. “We now have a more capable owner and the central resources of Boulder Brands, better financing and more sophisticated operations.” EVOL recently launched Street Tacos, and will soon launch some gluten-free foods.
Corgenix Medical Corp. (OTC QB: CONX.OB), a developer and marketer of diagnostic test kits, entered into a definitive merger agreement to be acquired by Orgentec Diagnostika, a diagnostics company headquartered in Mainz, Germany.
Corgenix president and CEO Douglass Simpson and CFO William Critchfield will depart, but the other 50 employees will remain. The transaction is expected to close in the fourth quarter of 2014, and Corgenix expects to keep its headquarters in Broomfield.
Zuke’s Performance Pet Nutrition, the Durango-based manufacturer of healthy, natural treats for dogs and cats, became part of St. Louis-based Nestlé Purina PetCare.
In a press release, Zuke’s noted it would continue to operate as an independent company and would continue to produce its outdoors-inspired dog and cat treats in the U.S.
Littleton-based tw telecom was acquired by Level 3 Communications, in a transaction expected to close in fourth quarter 2014.
tw telecom employs more than 1,000 people at the Littleton location and Level 3 employs more than 2,500 at its Broomfield headquarters. “The planned acquisition of tw telecom will combine two companies that are both currently positioned for growth,” said Laurinda Pang, chief administrative officer of Level 3 Communications. “We look forward to a combined work force with the talent and focus to capitalize on the opportunities ahead.”