PwC report: Retailer, consumer M&A activity could increase for remainder of 2013
NEW YORK — Despite a slowdown in U.S. retail and consumer merger and acquisition activity in second quarter 2013, there are signs that M&A activity could experience an uptick for the remainder of 2013, according to PwC’s U.S. retail and consumer deals insights Q2 2013 report released on Thursday.
In the second quarter of 2013, there were a total of 21 deals worth $50 million or more in the retail and consumer sector, accounting for $5.4 billion in deal value, a 49% decrease in volume and 90% decrease in value from the 41 deals worth $40.5 billion during second quarter 2012, according to the report. The decrease in deal activity is primarily a result of the lack of large deals in Q2 of 2013 compared with the prior year, during which time there were several large deals. There was only one mega deal (worth more than $1 billion) in the second quarter, as opposed to a trend of four successive quarters with five or more mega deals. Sequentially, deal activity in the retail and consumer sector declined, with the middle market also seeing declines, partially because of the lingering effect of the abnormally higher deal volume during Q4 of 2012 due to the impending fiscal cliff, along with the several mega deals seen in the first quarter of 2013, according to PwC.
"Coming off the heels of one of the largest retail and consumer deals in history in the first quarter of 2013, the declines we saw in the second quarter will likely be temporary as the pipeline for deals resets from the flurry of activity we’ve seen in the last few quarters," stated Leanne Sardiga, partner and PwC’s U.S. retail and consumer deals leader. "The second half of 2013 looks promising for M&A activity in the industry given the recent pick-up in businesses starting to come to market for sale, although price expectations and seller timelines continue to be a challenge."
Private equity activity was slightly above historical levels in second quarter 2013, as PE buyers continued to invest in the retail and consumer sector, comprising 24% of deal volume and 38% of deal value, which is relatively consistent with historical averages of 27% and 30%, respectively.
The trend towards omnichannel retailing continues to contribute to deal activity in the sector as retailers look at opportunities to transform their business and capabilities, focusing on innovation. Key activity in the omnichannel space in the second quarter included several acquisitions of ecommerce retail service companies. And PwC noted that it expects to see increased activity in this area as investors see opportunity to gain a competitive advantage through technology for data analytics.
Retail and consumer IPO activity continues the momentum seen in the first quarter, far outpacing levels seen in 2012. Total proceeds in the second quarter of 2013 were $2.1 billion, up 161% from the second quarter of 2012 (proceeds of $795 million) and up 18% from the first quarter of 2013 (proceeds of $1.8 billion). Average deal size continued to increase in the second quarter as well, with an average deal size of $345 million for the six IPOs completed in the quarter, compared with $292 million for the six in the first quarter of 2013. According to PwC, in the overall IPO markets, R&C had the largest one-day average returns of any sector.
"While second-quarter activity was relatively slow compared to the activity we’ve been seeing, the deals announced remain consistent with themes PwC has highlighted previously, including private equity investment in retail and activity in nonstore retailing. Regionally, we expect to see continued cross-border retail activity as companies try to access certain demographics in the global marketplace," Sardiga said.
FDA grants orphan drug status to Eisai’s investigational compound for cutaneous T-cell lymphoma
WOODCLIFF LAKE, N.J. — Eisai Inc., announced today that the U.S. Food and Drug Administration has granted orphan drug designation to its investigational compound (E7777) for cutaneous T-cell lymphoma. E7777 is designed to have an improved purity profile and manufacturing process. It is currently in a pivotal trial intended to support its submission for approval.
The Orphan Drug Act allows FDA to grant orphan status to a drug which has the potential for the treatment, diagnosis, or prevention of a rare disease/disorder that affects fewer than 200,000 people in the United States.
CTCL is a rare type of cancer that begins in the white blood cells and attacks the skin. It is one of several types of lymphoma collectively called non-Hodgkin lymphoma.
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New Hydratherma Naturals Healthy Hair Care line aims to balance moisture, protein in hair
ATLANTA — Healthy Hair Journey Enterprises has introduced the Hydratherma Naturals Healthy Hair Care Collection, a line of natural-based products developed to improve, enhance and maintain healthy hair.
According to the company, it is possible for hair to be over-moisturized, generating protein deficient hair that is weak and limp and unable to hold a curl. On the other hand, hair that has too much protein and is moisture deficient will appear dry and brittle and break easily. The combination of protein and moisture and the synergy of these two agents is the key to healthy hair and natural hair growth and the secret behind how Hydratherma Naturals products deliver on its promise of length retention and beautiful, frizz-free natural curls.
Saleemah Cartwright, a registered nurse and licensed cosmetologist by trade, noticed while working on her clients’ hair that when the hair was well-balanced, the hair would flourish. Too much moisture or protein would result in breakage. Many of her clients, however, did not know how to achieve this balance.
"I tried many products on my hair and the hair of my clients. Most products would result in too much moisture or protein overload in the hair. So after several years of combining many of the hair care ingredients that I absolutely loved, I was able to design a natural-based hair care collection that provides the perfect balance of moisture and protein levels. I wanted to create an effective solution and a simple hair care regimen that my clients could easily follow," stated Cartwright, creator of Hydratherma Naturals and co-founder of Healthy Hair Journey Enterprises.