Report • Billion-dollar acquisitions of Vivint, others led the way.
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It seems Utah has mastered the art of the deal.
Last year was one of the biggest for the number of business deals made in the state, with transactions totaling $11.04 billion, according to a report by Salt Lake City-based MountainWest Capital Network (MWCN).
In 2012, there were 292 business deals, ranging from mergers and acquisitions to investments from venture capitalists to secondary public offerings. That marked a 59 percent increase from 2011, according to the report.
One reason for the uptick is that companies were hurrying to secure deals because of concerns about the post-election year prospect of rising capital gains taxes in 2013, said MWCN President Devin Thorpe.
"The bigger driver, though, is the Utah economy," he added. "Our economy is doing better, our businesses are doing better. It's more appealing to out-of-state buyers."
The report, which will be released Thursday, was compiled by MWCN, an association of lawyers, venture capitalists, accountants and bankers who monitor business deals in the state.
Of the 292 transactions, 110 were for mergers and acquisitions totaling $10.8 billion in transactions, 176 involved investments from venture capitalists and angel investors totaling $831 million, and six were from secondary public offerings totaling $106 million. No Utah companies had initial public offerings last year.
The total marked the largest deal year in Utah since 1999, when Albertsons acquired American Stores for $11.7 billion, according to the report.
"We're excited to continue to see the progress going on in Utah. There's a lot going on," said Spencer Eccles, executive director of the Governor's Office of Economic Development (GOED).
Of the mergers, the largest last year was private equity firm Blackstone acquiring Provo-based Vivint for $2 billion. Vivint is a supplier of home automation, security and solar power equipment and services.
Elsewhere, European private equity firm Permira purchased Provo-based Ancestry.com for $1.6 billion, Schiff Nutritional International Inc. was acquired by Reckitt Benckiser Group Plc. for $1.4 billion, and CHG Healthcare was bought by Los Angeles-based Ares Management LLC and Leonard Green and Partners for $1.1 billion. Nearly 40 percent of the deals made last year involved software, technology and services companies.
Thorpe said that such deals generally are good for the state's economy because the outside buyer in a merger or acquisition often makes an investment in the Utah company after the purchase. Also, the Utah owners whose companies were bought suddenly are flush with new cash to spend, Thorpe said.
"The risk, of course, is that the out-of-state buyer may close the operations or move them out of the state and that has happened but I'm not aware of that happening with this year's deals."
The deals reported by MWCN do not include those private agreements that were made in Utah.
MWCN is aware of 75 percent to 90 percent of the deals made in Utah each year, Thorpe said. "It's the smallest deals that are most likely to go outside of our radar."
2012's big transactions
Blackstone acquires Provo-based Vivint, $2 billion
Permira acquires Provo-based Ancestry.com, $1.6 billion
Reckitt Benckiser Group acquires Schiff Nutritional International, $1.4 billion
Ares Management LLC and Leonard Green and Partners acquires CHG Healthcare, $1.1 billion