List Dealmaker’s guide to 15 cities where M&A thrives

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List Dealmaker’s guide to 15 cities where M&A thrives


Business Broker Business Intermediary Merger & Accusations
Vincent Murphy Business Broker

IBBA Final Business advice

  • November 07 2018, 2:40pm EST

Mergers & Acquisitions identifies 15 cities that provide fertile environments for dealmaking, from Austin (where Michael Dell launched a PC business out of his dorm room back in the day and where thousands gather every year for SXSW) to St. Louis (home of private equity firm Thompson Street Capital Partners). Be sure to check out Milwaukee (with private equity firm Robert W. Baird & Co. and investment bank Clearly Gull) and Minneapolis (home of strategic buyers 3M, Best Buy, General Mills, Hormel and Target). And don’t forget BostonChicagoNew YorkSan Francisco and Los Angeles and more.

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1 Atlanta: the real thing

The Hub of the Southeast, Atlanta is positioned well (it’s as close to Ohio as it is to Florida); it’s easy to get to (the Hartsfield-Jackson Atlanta International Airport (ATL)provides nonstop service to more than 150 domestic and 70 international destinations); and the city is well known for its hospitality (the Georgia World Congress Centerhouses 12 exhibit halls and includes the 21-acre Centennial Olympic Park and the retractable-roof Mercedes-Benz Stadium, home to the NFL’s Atlanta Falcons). Some of the largest companies in the world call Atlanta home, including: Coca-Cola Co. (NYSE: KO), Delta Air Lines Inc. (NYSE: DAL), Home Depot Inc. (NYSE: HD) and UPS (NYSE: UPS). In the middle market, Atlanta hosts investment banks and M&A advisors Brookwood Associates, Croft & Bender, Genesis Capital, SunTrust Bank and TM Capital, and private equity firms Hawthorne Capital, Roark Capital (which recently made deals for restaurant chains Buffalo Wild Wings and Sonic), and MSouth Equity Partners.

2 Austin: Silicon Hills

Austin has delivered an inspiring environment for innovative entrepreneurs for decades. In the 1970’s, John Mackey and Renee Lawson launched the natural food stores that grew into Whole Foods Market, which Amazon Inc. (Nasdaq: AMZN) bought for $13.7 billion in 2017. In the 1980s, Michael Dell began selling personal computers out of his dorm room at the University of Texas as the precursor to today’s Dell Technologies Inc. (NYSE: DVMT). Known as the Live Music Capital of the World, Austin hosts more than 250 music venues and a vibrant arts scene, and many music studios, including King Electric Record Co. and Strait Music Co., are headquartered there. The South By Southwest (SXSW) conference brings together 150,000+ people every year to celebrate the convergence of the interactive, film, and music industries. In the middle market, private equity firms Blue Sage Capital and Peak Rock Capital call Austin home.

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3 Boston: The Hub

The Boston area’s Route 128 Technology Corridor is second only to San Francisco’s Silicon Valley as a U.S. tech hub, and boasts a long history of launching successful technology companies, including EMC (which was bought by Dell Technologies Inc. (NYSE: DVMT) for $67 billion in 2016), HubSpot (NYSE: HUBS) and TripAdvisor (Nasdaq: TRIP). The region has long been fueled by top-tier universities, including Harvard University and the Massachusetts Institute of Technology in Cambridge, which has become an incubator for startups. Financial services also plays a key role in the region’s economy, with Boston hosting Fidelity Investments and State Street Corp. (NYSE: STT), which recently bought Charles River Development for $2.6 billion. It’s no wonder that GE (NYSE: GE) relocated its headquarters from Fairfield, Connecticut, to Boston. Now in its fourth year, HUBweek is a “festival for the future” founded by The Boston Globe, Harvard, Massachusetts General Hospital, and MIT. Each year, the festival brings hundreds of activations, installations, and conversations centered around art, science, and technology to Boston. In the middle market, the region hosts private equity firms Audax Private Equity, Charlesbank Capital Partners, Watermill Group and TA Associates and investment bank Tully & Hollland

4 Crossing the finish line in Charlotte

Charlotte’s low corporate tax rates and affordable cost of living attracts companies mainly from the business and financial services sectors. Bank of America and Lowe’s Cos. (NYSE: LOW) house their headquarters there. Motorsports and racing are popular, with several Nascar teams resisting their offices in Charlotte. On the corporate side, In the middle market, private equity firms Falfurrias CapitalFrontier Capital and Ridgemont Equity are based in Charlotte. Falfurrias recently acquired Global Plasma Solutions, a provider of air purification devices.

5 Our kind of town, Chicago is

“Home to an unrivaled talent pool, Chicago is centrally located at the nexus between European and Asian markets, and the North American Free Trade zone,” explains World Business Chicago. “The region features a strong, globally diverse economy larger than that of many countries, has a uniquely friendly and welcoming business community, and boasts one of the best quality-of-life to cost-of-living ratios in the nation.” The city’s derivatives exchange community, which started with commodity futures trading at the Chicago Board of Trade in 1848, established the city as a global financial center. Today, CME Group (Nasdaq: CME) operates four exchanges: CME, CBOT, NYMEX and COMEX. Each exchange offers a wide range of global benchmarks across all major asset classes. Corporate giants Boeing (NYSE: BA), Conagra Brands Inc. (NYSE: CAG) and Kraft Heinz Co. (Nasdaq: KHC) are headquartered in Chicago. The Windy City is home to dozens of middle-market companies, including private equity firms, investment banks and lenders. The list includes: GTCR, Lincoln International, Kirkland & Ellis, Madison Dearborn Partners, Madison Street Capital, Monroe Capital, William Blair and Twin Brook Capital.

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6 Cleveland rocks

Cleveland’s location alongside Lake Erie has been attracting businesses since the 18th century. Sherwin-Williams Co. (NYSE: SHW) calls the city home. In 2017, Sherwin-Williams acquired rival Valspar for $9.3 billion. LeBron James (who was born in nearby Akron and now plays for the Los Angeles Lakers) helped the National Basketball Association’s Cleveland Cavaliers bring a championship to the city in 2016. The Rock and Roll Hall of Fame brings visitors to Cleveland from all over the world. The city is home to middle-market firms including private equity firms Candlewood Partners, Blue Point Capital Partners, the Riverside Co., as well as financial services company KeyCorp. (NYSE: KEY) and law firm Jones Day.

7 Energizing deals in Dallas

The discovery of oil in Texas in the early 1900’s solidified energy as a major sector in Dallas. Exxon Mobil Corp. (NYSE: XOM) is located outside of Dallas. The city is home to the National Football League’s Dallas Cowboys, which is owned by Jerry Jones, who made his fortune building an oil and gas exploration company. Big corporations include AT&T Inc. (NYSE: T) and Texas Instruments Inc. (Nasdaq: TXN). On the financial side, investment banks Allegiance Capital Corp., Kratos Capital, andTenOaks Energy Advisors along with PE firms Brazos Private Equity PartnersCenterOak Partners LLC, Highlander Partners, SunTx Capital Partners, and Trinity Hunt Partners are based in Dallas. Trinity Hunt recently closed its fifth fund at $350 million.

8 Brewing business in Denver

The Rocky Mountains have historically made the agriculture, industrials, and the mining and minerals sector popular in Denver dating back to the 1800’s. Today, the government and the food and beverage are among some of the sectors that play a major role in Denver’s economy. Lockheed-Martin Corp. (NYSE: LMT) holds a significant presence. Molson Coors Brewing Co. (NYSE: TA), the owner of the Coors Light brand, is one of the popular consumer companies based in Denver. The National Football League’s Denver Broncos won the Super Bowl with Peyton Manning at quarterback in 2016. In the middle market, PE firms including Excellere Partners, Grey Mountain Partners, Lariat Partners and Platte River Equity.

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9 Los Angeles: middle-market courtside

Los Angeles is teeming with movies, TV and entertainment – and the National Basketball Association’s Los Angeles Lakers, now with LeBron James. La La Land also boasts a large financial services community with several middle-market PE firms and investment banks. FocalPoint Partners, Century Park Capital Partners, Intrepid Investment Bankers, Levine Leichtman Capital Partners, Leonard Green & Partners and Roth Capital Partners, are among those who either have headquarters or a large presence in Los Angeles.

10 Milwaukee: riding along

Milwaukee’s easy access to Lake Michigan has set it up for economic growth since the 1800’s. The city is known for the agriculture, industrials and manufacturing sectors. Some notable companies located in Milwaukee include: Harley-Davidson Inc. (NYSE: HOG)Johnson Controls and Rockwell Automation (NYSE: ROK). Investment banksRobert W. Baird & Co., Clearly Gull, Eisen Fox, TKO Miller and PE firm Mason Wells are all headquartered in Milwaukee.

11 Big buyers in Minneapolis

Strategic buyers thrive in Minneapolis. Several consumer and retail companies are based in and around Minneapolis including: 3M Co. (NYSE: MMM), Best Buy Co. (NYSE: BBY), General Mills Inc. (NYSE: GIS), Hormel Foods Corp. (NYSE: HRL)Target Corp. (NYSE: TGT). In 2018, General Mills bought Blue Buffalo Pet Products for $8 billion. Investment banks Greene Holcomb & Fisher (bought by BMO Financial Group in 2016) and Piper Jaffray, along with PE firms Mill City Capital and Norwest Equity Partnersare headquartered there.

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12 New York: if you can make it there…

New York is the financial capital of the world, with the New York Stock Exchange located right off Wall Street and the Nasdaq exchange in Times Square. Middle-market PE firms Arsenal Capital, Bruckmann, Rosser, Sherrill & Co., ICV Capital Partners, Spire Capital and investment bank Sperry, Mitchell & Co. call New York home.

13 Flying high in Philadelphia

To get a sense of Philadelphia’s role on the world stage, consider that Pope Francis visited in 2015. The National Football League’s Eagles won the Super Bowl in 2018. Manufacturing, healthcare and education are strong sectors, with the University of Pennsylvania and Villanova University nearby. Science plays a big role, as theUniversity City Science Center boosts a large number of local jobs. Philadelphia is home to middle-market firms including: investment banks Fairmount Partners, Janney Montgomery Scott, Mufson How Hunter, and PE firms LLR Partners, Milestone Partners, Larsen MacColl Partners, NewSpring Capital and Versa Capital Management. Aramak (NYSE: ARMK) and Comcast Corp. (Nasdaq: CMCSA) are based in Philadelphia as well.

14 San Francisco: the heart of tech

San Francisco has a robust technology and transportation infrastructure that attracts 42 percent of total capital investments in the U.S., according to the San Francisco Center for Economic Development. IT and software, social and digital media, life sciences and biotechnology, environmental and clean technology all have a strong presence in San Francisco. The city’s history is known for the gold rush of 1800’s. The original transcontinental railroad was completed in 1869, and its economy has grown ever since. PE firms Encore Consumer Capital, Golden Gate Capital, Gryphon Investors, Hellman & FriedmanHGGC, Industrial Growth Partners and TSG Consumer Partners are based in San Francisco and so are Twitter Inc. (NYSE: TWTR)Uber, andYelp Inc. (NYSE: YELP).

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15 St. Louis in the mix

St. Louis, home to Major League Baseball’s Cardinals, began as a trading center in 1764 and has evolved into a manufacturing mecca. Today, St. Louis’ economy represents a diverse mix of sectors including consumer, healthcare and financial services. Emerson Electric Co. (NYSE: EMR), Energizer Holdings Inc. (NYSE: ENR), Express Scripts Holding Co. (Nasdaq: ESRX), Panera Bread (acquired by JAB in 2017 for $7.2 billion), Post Holdings Inc. (NYSE: POST), Stifel Financial Corp. (NYSE: SF) are based in St. Louis. So are investment bank Clayton Capital Partners and PE firmsCompass Group Equity Partners, Harbour Group, Sage Capital, and Thompson Street Capital Partners.

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