There was a flurry of merger and acquisition activity involving Washington area businesses last week, perhaps most notably the purchase of Rockville-based prescription benefits manager Catalyst Health Solutions for a hefty $4.4 billion.
Mergers and acquisitions have been gradually picking up pace nationally since 2009, according to data from Thomson Reuters and PricewaterhouseCoopers, following an economic downturn that forced many companies to slow their investments or halt them altogether.
A total of 8,991 announced M&A deals closed throughout 2011, a 2.4 percent increase over the 8,780 from the year before. That’s up 10.4 percent, though, compared with the 8,144 transactions that closed in 2009.
Data show that 2012, however, is off to a slower start. An estimated 1,813 deals were completed in the first quarter of this year, down 21.1 percent compared with the same three-month period last year.
“There’s a nexus between how the economy is faring and M&A activity,” said Lawrence Yanowitch, the co-chairman of Morrison and Foerster’s global mergers and acquisitions group. “There’s a good correlation there because the uncertainty over the economy creates uncertainty in terms of how you value a company for M&A purposes.”
But Yanowitch said the regional market has been more active than national figures suggest, with deal activity fueled in part by the concentration of local cybersecurity and government services firms.
Last week, the local companies that snapped up firms or were the target of buyouts hailed from a broad swath of industries.
Rockville-based Human Genome Sciences rebuffed a $2.6 billion acquisition offer from its longtime drug partner GlaxoSmithKline, saying in a statement that the $13 a share purchase price did not reflect the company’s true value. HGS’s shares closed at $14.36 on Friday.
Reston-based Maximus, which administers health and human services programs, said last week it would pay $67 million for a smaller, Denver-based contractor called Policy Studies.
Meanwhile, McLean-based defense contractor ITT Exelis said it picked up Sussex, England-based Applied Kilovolts Group Holdings, which provides high-voltage power supplies for medical and scientific instruments, among others. The price was not announced.
In the hospitality industry, hotel giant Marriott International sold its ExecuStay corporate and temporary housing business to Oakwood Worldwide for an undisclosed sum. Chief Executive Arne Sorenson said in an interview that hotel buyers have been more willing to make deals lately as the economy rebounds.
“Over the last couple of years there has been plenty of equity interested in investing, but there was obviously a real lack of confidence in the depths of the recession and even in the second half of last year there was a decided lack of confidence about putting that money to work,” Sorenson said.
Reporters Danielle Douglas and Marjorie Censer contributed to this report.