(Charlotte, NC – August 7, 2019)
U.S. PE Buyout Multiples (four-quarter rolling median)
Source: 2Q 2019 U.S. PE Breakdown Report (Pitchbook)
(McKinsey) Data from a recent McKinsey study reveals a surprising answer to the critical management question: What type of M&A strategy creates the most value for large corporations? To the surprise of many executives, deal size and pursuit frequency are major determining factors for creating long-term shareholder value. Companies that regularly and systematically pursue moderately sized M&A deliver better shareholder returns than companies that pursue large deals, only occasionally pursue deals, or avoid M&A altogether.
(Wall Street Journal) A new trend in PE is altering the prospects of long-term returns as rising stock valuations and lenders at their leverage limits are forcing PE firms to contribute more cash to their leveraged buyouts than ever before. In 2Q 2019, PE firms contributed 52% to the purchase prices of companies they bought, up from 45% in 1Q 2019. Investors are both cognizant and weary of this shift towards larger equity stakes, with 30% of poll respondents saying they expect their PE portfolios to have worse returns in 2019 than they did in 2018.
(The Post and Courier) The parent company of Dutch-based retailer IKEA now owns a sizable chunk of South Carolina forestland. The coastal plain offers both quality wood as well as increased sustainability. The firm’s forestry practices mandate that more trees are planted than harvested as part of their commitment to maintaining a positive impact on our planet. The newly purchased land adds to the company’s forestry holdings, which currently includes 25,000 acres in Alabama, 22,000 in Texas, and over 520,000 worldwide.
(Ballantyne Magazine) North Inlet’s own Val Matena was recently featured in a local magazine series highlighting Ballantyne-area residents’ adorable pets. Meet Ziki Matena – a seven year old Parrotlet who skateboards around the living room.