M&A: Back-to-School Doldrums

Volatile markets and a U.S. holiday cool off merger and acquisition activity.
Vincent RyanSeptember 6, 2011

In a run-up week to a national U.S. holiday, in which equity markets remained volatile, North American merger and acquisition activity slowed to a crawl.

Twenty-seven deals were announced the week ending September 2, with a total disclosed value of $4.4 billion, according to mergermarket. That’s down from the 47 deals with a total disclosed value of $6.6 billion the previous week, and a miniboom in big mergers a fortnight ago.

What kept the market from totally stalling were a number of cross-border announcements, featuring both European and Canadian sellers and buyers.

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IBM double-dipped internationally. In the largest deal with international flavor, it agreed to buy Canadian firm Algorithmics, a provider of business analytics, for $387 million. The seller was Fitch Group, the parent of Fitch Ratings. Big Blue also agreed to purchase U.K.-based i2, another analytics firm, from a consortium of investors that included Silver Lake Sumeru, the middle-market investment fund of Silver Lake Partners.

In another high-tech cross-border transaction, TIBCO Software agreed to acquire Nimbus Partners of the U.K., a developer of business process management tools. Luxury boat builder Sealine International was another U.K.-based target, as Brunswick sold the unit to La Jolla, Calif.-based The Oxford Investment Group.

International acquirers rolling up U.S. companies included Germany’s BayWa AG, which bought a 70% stake in WKN USA, a builder of wind farms. Similarly, SGS SA, a Swiss provider of inspection and certification services for international trade, agreed to acquire Environmental Testing Corp., an Aurora, Colo., provider of vehicle and engine emission laboratory services.

The largest all-domestic deal announced last week was a tender offer for the outstanding shares of S1 by ACI Worldwide. The merger of two payment services companies is valued at $469 million. The S1 board said it is considering the offer and would advise stockholders no later than September 13.