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Merger activity in region jumped 24% in '12

| Tuesday, Jan. 29, 2013, 12:01 a.m.

The 69 mergers and acquisitions in the Pittsburgh region in the fourth quarter were more than 20 percent above year-earlier levels and capped a year of heavy deal flow, said a report on Monday.

Data from Strategic Advisors Inc., an investment banking firm in Cecil Township, also showed median deal values increased significantly to $44 million in the October-December period from $16 million in the July-September period. Deal values are not available for many transactions, however.

For all of 2012, area companies closed 279 deals, which marked a 24 percent increase from 225 completed in 2011.

The most active buyers in the Pittsburgh region last year were Wesco International Inc. and Incline Equity Partners, both of which completed five acquisitions.

The prospect of higher capital gains taxes in 2013 probably pushed some sellers to close transactions before the end of 2012, senior associate Matt Steve said.

“A lot of this was driven by people trying to get their deals done before tax rates went up,” said Steve, whose firm advised on two deals last quarter. “Nationally, people were trying to get deals closed before the end of the year, too.”

Of last quarter's 69 deals, 32 involved local companies that were buyers, while 37 were sellers.

The four quarters of 2012 each averaged 70 deals — far higher than the quarterly average of 56 in 2011, the firm said.

The largest deal involving a company in this region last quarter — and the second-largest of 2012 — was a $1.16 billion acquisition by Wesco. The company, which distributes electrical and industrial supplies globally, acquired Calgary-based EECOL Electric Corp., which has a similar business.

The second-biggest deal last quarter — and the fourth-largest of the year — was Coraopolis-based Heckmann Corp.'s $531 million acquisition of Badlands Energy LLC, Watford City, N.D. Both companies provide environmental services.

Most of the deals closed in the October-December quarter involved industrial companies, followed by information technology companies, Steve said.

Strategic Advisors tracks M&A deals on companies from Altoona west to northeastern Ohio but excluding Cleveland.

Thomas Olson is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or at tolson@tribweb.com.

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