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  Rebound in Merger Activity Gets Dealt 4Q Setback
BY KATE BERRY                                          Another Dip
Staff Reporter                                         After rising for two quarters, M&A activity involving L.A. companies fell in the fourth quarter.
                                                        $8                                                120
    Two steps forward, one step back.                                 Deal Value (in billions)                              Deal Volume
    After inching toward recovery for each of
the previous two quarters, mergers and acquisi-          6                                                 90
tion activity in Los Angeles fell in the fourth
quarter, further delaying a wait that keeps get-         4                                                 60
ting longer.
    In the fourth quarter, 90 companies based            2                                                 30
in L.A. County either purchased another com-
pany or were purchased in deals totaling $2.5
billion in value, according to data from Fact-           0                                                  0
                                                             4Q02    1Q03     2Q03      3Q03     4Q03           4Q02     1Q03     2Q03     3Q03       4Q03
Set/Mergerstat.                                                                                                                       Source: FactSet/Mergerstat
    That’s down from 116 transactions worth
$4.5 billion in the third quarter and 99 transac-     LLC, and two units owned by Cable & Wire-                A handful of private companies that are
tions worth $6.9 billion in the fourth quarter of     less to Gores Technology Group LLC for               well-known in their industry niche announced
2002. The year-ago period included the $4.7 bil-      $125 million.                                        in the fourth quarter that they would be sold,
lion purchase of TRW Inc. by Northrop Grum-               There are broader signs of a pickup in           including Myra L. Frank & Associates Inc.,
man Corp.; excluding that deal, the transaction       activity.                                            an environmental services firm downtown that
value in that period totaled $2.2 billion.                                                                 works primarily with public agencies. It was
    Despite lukewarm results, investment              Global dealmaking                                    sold to Jones & Stokes Associates Inc. in
bankers expect activity to heat up this year              Worldwide, the value of announced acqui-         Sacramento, while VanRex Gourmet Foods
because of the improving economy.                     sitions rose 14 percent in 2003, to $528.6 bil-      Inc., a Vernon distributor of specialty foods,
    “The numbers don’t show anything dramat-          lion, compared with $462.4 billion in 2002,          merged its warehousing with United Special-
ic in the way of a recovery,” said Steve Sebast-      according to Dealogic LLC.                           ties Inc. of Long Island, N.Y., the first
ian, managing director at investment bank                 Several New York bankers are already pro-        importer of fresh truffles into the U.S.
Chanin Capital Partners. “But when you                jecting a 20 percent jump in M&A activity in             Other deals included law firm Manatt
look at what’s going on inside the (investment        2004. As if on cue, J.P. Morgan Chase & Co.          Phelps & Phillips LLP’s purchase of the New
banking) shops, there’s been a dramatic               last week agreed to purchase Bank One Corp.          York law firm Parcher Hayes & Snyder,
increase in the things people are looking at. The     in a $58 billion deal that is reminiscent of the     which has a long list of entertainment and
feeling is that the level of internal activity will   mega-mergers that took place in 1999 and 2000.       media industry clients, including Bruce
turn into external statistics down the road.”             In Los Angeles, private equity firms contin-     Springsteen, Bob Dylan, the Rolling Stones
    It’s a theme that’s been sounded more than        ued to demonstrate buying power during the           and The Eagles.
once over the past three of years by local            fourth quarter. Leonard Green’s purchase of              Consolidation apparently has hit several
bankers waiting for tire-kicking to turn into         florist FTD Ltd. for $407.3 million was the          niche industries, including online dating and
action.                                               largest announced deal of the quarter.               pre-sorted postal services.
    But aside from the occasional whopper, like           Among other notable deals: Hanmi Finan-              In the fourth quarter of 2003, Beverly Hills-
the TRW deal, the scene has remained                  cial Corp.’s purchase of Pacific Union Bank          based MatchNet PLC, the owner of Ameri-
depressed. This time, though, there is reason for     for $295 million and Lions Gate Entertain-           canSingles.com and JDate, bought
optimism. Stock market values rose dramatical-        ment Corp.’s purchase of Artisan Entertain-          JCupid, another online dating site, from
ly last year, and more available financing, par-      ment Inc. for $160 million.                          PointMatch Ltd.
ticularly from private equity firms, has helped           Several transactions occurred in the radio           In addition, one of the nation’s largest pre-
push up the level of confidence, Sebastian said.      industry. Univision Communications Inc. in           sorting and mailing services, privately-held
    He also pointed out that two large sales did      Los Angeles, Entravision Communications              Ancora Inc. in San Fernando, made two
not make it into the data: The $300 million sale      Corp. in Santa Monica and Salem Communi-             acquisitions on the East Coast, Barton &
of Communications & Power by Leonard                  cations Corp. in Camarillo all added to their        Cooney Inc. in Trenton, N.J. and CMS Com-
Green to private equity firm Cypress Group            extensive radio holdings.                            plete Management Inc. in New York.

                                                                                                  Posted with permission from Los Angeles Business Journal ®

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