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Joe Anto

E: janto@pcecompanies.com

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Industry Trends

Amazon Faces Antitrust Lawsuit Accusing It of Unlawfully Maintaining Monopolies

In a recent legal action by the Federal Trade Commission and 17 states, Amazon is accused of employing "punitive and coercive tactics" to sustain its market dominance. The complaint alleges that Amazon's control of e-commerce stifles competition, citing its 82% share of gross merchandise value among the top 4 U.S. online marketplaces (Amazon, eBay, Walmart, Target.) While Amazon contends it operates in a highly competitive environment, experts debate whether certain practices, such as pricing and search manipulation, harm sellers and consumers. The lawsuit may prompt changes in Amazon's practices and raise questions about the tech giant's market power.1

Wage Hikes Could Revive Retail in 2024

Industry analysts predict a rebound in discretionary spending as wage growth injects new life into household finances. Major retailers such as Amazon and Walmart stand to gain the most from this boost, as consumers anticipate a 4% salary increase to offset mounting living costs. Although the retail sector faced challenges this past year, there is a growing sense of optimism for better performance as consumer financial health is set to improve in 2024.2

Debt Burden Dampens Holiday Spending

Recent results and forecasts from U.S. retailers like Macy's and Foot Locker reflect a growing concern as middle-income shoppers grapple with increased credit card debt amidst soaring living expenses. While some retailers face inventory losses due to theft, others like Kohl's and Macy's warn of weak demand and payment delays. Walmart, catering to budget-conscious shoppers, remains resilient as shoppers continue to spend on budgeted essentials.3

Recession Fears Loom as Consumer Confidence Plummets

In September 2023, U.S. Consumer Confidence dropped to 103.0 from 108.7 in August, with the Expectations Index sinking below the recession threshold. Rising prices, political concerns, and higher interest rates contributed to the declining sentiment. This trend underscores growing economic instability and an intensified fear among consumers of a potential U.S. recession in the near future, affecting both consumers and businesses.4

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • WPF Holdings, Inc.
  • WPF Holdings, Inc.
  • $4,863.56
  • TravelCenters of America Inc.
  • BP Products North America Inc.
  • $3,581.13
  • Franchise Group, Inc.
  • Undisclosed Buyers
  • $3,461.63
  • Park Lane Hotel, Inc.
  • Qatar Investment Authority
  • $622.78
  • Battery Enclosures Business of DURA Automotive Systems
  • Linamar Corporation
  • $325.00
  • Renzi Bros., Inc.
  • US Foods Holding Corp.
  • $143.00
  • 177-room Canopy by Hilton Scottsdale Old Town hotel
  • Dynamic City Capital
  • $101.83
  • Inn at Rancho Santa Fe, LLC
  • Undisclosed Buyer
  • $100.00
  • Nugget Casino Resort
  • Century Casinos, Inc.
  • $100.00
  • Mandarin Oriental (New York), Inc.
  • Reliance Industrial Investments and Holdings Limited
  • $98.15

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • The Westin Annapolis
  • District Hospitality Partners
  • $51.00
  • Chico Hot Springs Resort, Inc.
  • DiamondRock Hospitality Company
  • $27.00
  • 177-room Canopy by Hilton Scottsdale Old Town hotel
  • Dynamic City Capital
  • $102.00
  • Banyan Cay Resort & Golf Club
  • Calmwater Capital, LLC
  • n/a
  • Williams Island Marina
  • Integra Investments
  • $8.00

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Seneca Hotel Corporation
  • Undisclosed Buyer
  • $55.00
  • Certain assets of VKGS LLC
  • Everi Holdings Inc.
  • $59.00
  • Operating Assets of Rocky Gap Casino Resort
  • Century Casinos, Inc.
  • $61.20
  • Horseshoe Baltimore
  • Caesars Entertainment, Inc.
  • $66.00
  • Substantially All of the Assets of Lucky Strike Entertainment, LLC
  • Bowlero Corp.
  • $90.00
  • The Williamsburg Hotel
  • Undisclosed Buyer
  • $96.00
  • Skinny Labs Inc.
  • Bird Canada Inc.
  • $19.00
  • Great Lakes Hyundai of Dublin, Great Lakes Hyundai of Columbus and Genesis of Columbus
  • Great Lakes Auto Network, Inc.
  • $21.90
  • Wingate by Wyndham Hotel
  • Greens, Inc.
  • $23.67
  • The View Hotel Inc.
  • American Dream Hotel LLC
  • $24.00

 

Source S&P Capital IQ as of 10/11/2023 and PCE Proprietary Data

PCE Transactions

Contacts

Joe Anto

Orlando Office

407-621-2141 |

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Eric Zaleski

Chicago Office

847-239-2466 |

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Kyle Wishing

Atlanta Office

404-994-4186 |

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Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

  1. 1. Howland, D. " Is Amazon just another retailer? The Federal Trade Commission doesn’t think so." Retail Drive, October 3, 2023.
  2. 2. Mayer, K. "Salary Increase Budgets Hit Two-Decade High." SHRM, September 11, 2023.
  3. 3. Rajesh, A & Venugopal, A. "Gloomy U.S. retail outlook dulls hopes of strong holiday season spending." Reuters, August 23, 2023.
  4. 4. The Conference Board. "US Consumer Confidence Fell Again in September." The Conference Board, September 26, 2023.
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