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Joe Anto

E: janto@pcecompanies.com

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Industry Trends

Fed Rate Cuts Could Prompt Shift from Divestitures to Growth

Amid rising costs and economic pressures, Consumer & Retail M&A activity has been focused on divestitures, with companies shedding non-core assets to streamline operations and refocus on their core offerings. As the Fed eases interest rates, large corporations are poised to return to using M&A as an avenue for growth. At the same time, smaller acquisitions are expected to persist even with elevated financing costs.1

Cedar Fair and Six Flags Join Forces

Cedar Fair and Six Flags have completed a merger of equals, bringing the combined value of the new entity to $8 billion, making it the largest amusement park operator in the U.S. This merger enhances their ability to deliver thrilling experiences and drive growth. The partnership also highlights a growing trend of companies doubling down on consumer discretionary spending, betting on continued demand for leisure and entertainment.2

Consumer Optimism Rises, But Price Sensitivity Remains Strong

Consumer optimism in the economy has grown from 33% in the second quarter to 41%. This optimism translates directly to an increased appetite for spending as consumers indicated they planned to increase their spending on most essential, semi-discretionary, and discretionary items. While consumers want to increase their spending, they are still price sensitive, with consumers from all age groups, especially younger ones, saying they will switch retailers for lower prices and discounts.3

Flip Acquires Curated for Personalized Shopping Platform

Flip, a shopping app known for integrating video reviews and influencer-driven commerce, acquired Curated, a platform that connects consumers with experts to provide personalized shopping advice. The $330 million transaction will allow Flip to enhance its online shopping capabilities by incorporating Curated’s customized shopping experiences. With the growing shift toward online shopping, Flip will be well-positioned to take capitalize on this trend.4

Brands Should Prioritize Access Over Education

The shift towards healthier living has been around for many years, but a recent study by the Kearney Consumer Institute reveals that brands should not position themselves as the authority on health. Instead, they should focus on catering to the current consumer needs by enhancing access to healthier products rather than educating consumers. The report also emphasizes the creating a product offering that complements the consumer’s lifestyle rather than promoting an individual product.5

Kroger-Albertsons Merger Awaits Final Verdict

The Federal Trade Commission (FTC) is concerned that the $24.6 billion Kroger-Albertsons merger will cause higher prices for consumers due to reduced competition. In a trial concluded on September 17th, the grocery chains argued that this merger would allow the combined chains to better compete with retail giants such as Walmart, Costco, and Amazon. The FTC argued that the two chains were more in competition with each other than with those large retailers.6

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Six Flags Entertainment Corporation
  • Six Flags Entertainment Corporation
  • $4,867.80
  • Hibbett, Inc.
  • JD Sports Fashion Plc
  • $1,457.76
  • The Ritz-Carlton Oahu, Turtle Bay
  • Host Hotels & Resorts, Inc.
  • $680.00
  • Supreme Cabinetry Brands, Inc.
  • MasterBrand Cabinets, LLC
  • $520.00
  • Flip
  • Curated
  • $330.00
  • Shoptikal, LLC
  • Fielmann USA, Inc.
  • $290.00
  • RC/PB, LLC
  • Larry Ellison
  • $277.39
  • Sh Group Operations LLC
  • Host Hotels & Resorts, Inc.
  • $265.00
  • Real property in Kansas City and Shreveport
  • Gaming and Leisure Properties, Inc.
  • $250.00
  • Hilton Torrey Pines
  • JRK Torrey Pines Hotel Owner LLC
  • $165.09

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Hyatt Regency Clearwater Beach Resort and Spa
  • Blackstone Real Estate Advisors L.P.
  • $137.00
  • Lüm Hotel Inglewood
  • Chartres Lodging Group, LLC
  • $57.20
  • Keypath Education International, Inc.
  • Sterling Partners
  • $47.53
  • 110-room Hotel Teatro in Denver
  • RLJ Lodging Trust
  • $35.50
  • VBR Corp.
  • Store Capital LLC
  • $3.80

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Cab Structures business with operations of Mayflower Vehicle Systems, LLC
  • Volvo Group North America, LLC
  • $40.00
  • FansUnite US Inc.
  • GeoComply Solutions Inc.
  • $37.50
  • Airport Regency Management, Inc.
  • MG Developer Miami, LLC
  • $36.00
  • Wineland-Thomson Adventures, Inc.
  • Natural Habitat, Inc.
  • $30.00
  • The Lorien Hotel & Spa
  • Undisclosed
  • $29.96
  • Aloft Philadelphia Downtown
  • HHM
  • $25.10
  • Certain Assets including Iconic RCA Trademarks and Other Intellectual Property of VOXX Accessories
  • Talisman Brands Inc.
  • $25.00
  • Hotel Becket
  • Undisclosed
  • $24.60
  • The Onyx Hotel Miami Airport
  • Groupe B&B Hotels SAS
  • $16.20
  • Hyatt Place hotel in Princeton
  • Undisclosed
  • $15.85

 

Source S&P Capital IQ as of 10/9/2024 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. Kimberly, C. “Consumer environment spurs more M&A reflection.” Axios, 23, September, 2024.
  2. 2. Six Flags Entertainment Corporation. “Cedar Fair and Six Flags Merger of Equals Successfully Completed, Creating a Leading Amusement Park Operator.” Six Flags Entertainment Corporation, 1, July, 2024.
  3. 3. Becca, C. Christina, A. Kari, A. Warren, T. “An update on US consumer sentiment: Consumer optimism rebounds—but for how long?” McKinsey & Company, 23, August, 2024.
  4. 4. Business Wire. “Flip Acquires Curated for $330 Million in Stock.” Business Wire, 9, July, 2024.
  5. 5. PR Newswire. “Kearney Consumer Institute Q3 2024 Health & Wellness Brief: Findings Disrupt Popularly Held Tropes for Consumers and Brands.” PR Newswire, 21, August, 2024.
  6. 6. Ramon, V. “Kroger-Albertsons merger will increase costs for shoppers, says FTC chair.” The Guardian, 23, September, 2024.
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