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Exit and Growth Strategies for Middle Market Businesses

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M&A Quarterly News In The Hospitality and Leisure Industry Sector

By David Hulett | Oct 23, 2018

The report below gives a good overview of the fourth quarter M&A activity in the Hospitality & Leisure Industry Sector.  M&A activity for North American based target companies in the Hospitality and Leisure sector for Q3 2018 included 43 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions closed in August when Xenia Hotels & Resorts Inc acquired the business and assets related to the Ritz-Carlton hotel in Denver from The Ritz-Carlton Hotel Co LLC, a subsidiary of Marriott International Inc for US$100.2 million in cash. Funding for the transaction was provided by Xenia Hotels’ existing cash resources. The acquisition expands Xenia Hotels & Resorts Inc’s hotel management business. The Ritz-Carlton Denver is located in Colorado and owns and operates hotels and resorts.

Both business travel and leisure travel have been on a solid upward trend for decades now. This is driven, in part, by a growing economy and increased efficiencies in booking travel.

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M&A Quarterly News In The Hospitality and Leisure Industry Sector

By David Hulett | Aug 08, 2018

The report below presents you with a good overview on the third quarter M&A activity in the Hospitality & Leisure Industry Sector.  M&A activity for North American based target companies in the Hospitality and Leisure sector for Q2 2018 included 70 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions was announced in June when a private group led by MLB Advanced Media LP and The Seidler Co LLC, doing business as Seidler Equity Partners acquired Rawlings Sporting Goods Co, Inc., a subsidiary of K2, Inc. and ultimately owned by Newell Brands, Inc. for US$395 million. The acquisition complements MLB Advanced Media LP’s brands in the sports industry and strengthens The Seidler Co’s investment portfolio. Founded in 1887, Rawlings Sporting Goods is located in St. Louis, Missouri and manufactures & markets sports equipment and apparel.

The Restaurant Performance Index (RPI), a monthly composite index that tracks the health of and the outlook for the U.S. restaurant industry, posted a modest decline in Q2. The RPI stood at 101.2 in May, down slightly from April’s level of 101.3. Read more »


LOI – The Engagement Ring of the M&A World

By David Hulett | Oct 16, 2012

Shaking HandsYou were introduced by mutual acquaintances and have been “dating” for a while now.  Via probing questions and answers you realize you are compatible, synergistic and seemingly a perfect fit.  It’s time to move to the next step… the engagement ring?  No… the letter of intent, or LOI.

In the mergers and acquisitions world, the LOI is a legal document which spells out the initial price and terms upon which a buyer acquires a company.  In M&A, rarely is the balance of power between a buyer and seller even.  Prior to the signing of an LOI, the seller is more in control of the process.  They are negotiating for the best possible price and deal terms and are usually speaking with more than one potential suitor.  With competitive bidding underway, the seller has the ability to negotiate his sale price upward.  Favorable deal terms are part of this negotiating process.  However, once the buyer has been selected and a letter of intent signed, power shifts.

Exclusivity is a normal component of the LOI.  Once a letter of intent has been signed, the seller is no longer allowed to engage in dialog with other potential suitors.  This exclusivity lasts from 30 to as long as 90 days, during which the buyer and his legal team begin the due diligence process.  During this process, the buyer makes certain that representations about the company are true and complete.  During due diligence, the buyer isn’t necessarily looking for more “good stuff”, but generally seeks out that which may have a negative impact on the acquisition, deal terms and purchase price.  The buyer usually has more control during this phase of the M&A process.  You’ll rarely see the purchase price negotiated up during due diligence.

Do all engagements end in marriage? No.  Do all LOI’s end in closed M&A transactions?  No.  LOIs give both the buyer and the seller time to decide “should we make the commitment final?”

Posted by David Hulett.

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