In January, pharmaceutical giant Bristol-Myers Squibb bought Alpharetta drug developer Inhibitex for $2.5 billion.
In May, corporate titan Oracle acquired Atlanta software company Vitrue.
Then, earlier this month, Verizon Communications purchased Hughes Telematics, an Atlanta developer of wireless connectivity systems, for $600 million.
Three big deals, three significant Atlanta businesses purchased by leaders in their industries, all this year.
Could it be a sign that deal making is coming back into vogue after drying up during the recession?
Business executives say there are financial, demographic and tax reasons why the number of businesses changing hands may be on the rise. There is also some data that indicates an uptick.
The number of deals in Georgia that were valued from $10 million to $250 million increased to 82 in 2011, up from just 58 in 2009, according to John Tyers, managing director of the southeast region private banking and investment group of Merrill Lynch.
The firm said there were 103 in 2007, before the downturn.
Data from The MergerMarket Group show merger and acquisition activity in Georgia spiked in 2006 and 2007, fell in 2008 and 2009 and bounced back somewhat in 2010 and 2011.
More deals may be on the way, Tyers said, thanks to three factors:
• Cash-rich buyers are seeking companies. Private equity firms, flush with cash that piled up during the downturn, need to spend that money over the next several years. At the same time, corporations are better able to get the capital they need to make strategic purchases, making them players in the acquisition market.
• There are more willing sellers. Baby boomer generation owners of businesses, with much of their wealth tied up in their companies, are increasingly looking to cash out.
• New incentives to sell could arise. Anticipated changes in some federal tax laws favor selling before certain advantages are eliminated.
Regarding a possible increase in deals for those reasons, Tyers said, “There’s a good, solid 10-year trend there.”
A growing number of acquisitions can reflect a more robust economy, with corporations looking to grow through their investment in another business.
An upturn in merger and acquisition activity makes sense, some local business executives said.
Bart Foster, founder of SoloHealth, a Duluth health IT company, said big corporations that had clamped down on buying other businesses are looking to make acquisitions once more.
“There was a lot of money on the sidelines,” he said. Now, they’re “looking for deals.”
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