U.S. PE Retail Deals Slide as M&A Slows

The slowdown in U.S. M&A has put the damper on retail deals.

The U.S. retail sector produced the second lowest number of deals this year, according to data from Thomson Reuters. There have been 164 U.S. retail transactions totaling $12.7 billion in 2013. This represents a 13% fall in volume from 2012, while deal value dropped 33%. Last year, for the same time period, there were 188 U.S. retail transactions valued at $19.2 billion.

Only the telecom sector produced fewer deals. There have been 69 U.S. telecom mergers from Jan. 1 to July 12, valued at $28.1 billion. This, however, is an improvement for the sector in terms of valuations. Last year, for the same time period, there were 72 deals valued at $9.5 billion.

The biggest retail deal so far this year is SuperValu’s sale of its of retail grocery chains to a Cerberus-led investor group for $3.3 billion.

On the PE side, retail deal value dropped by 44% from 2012. There were 45 U.S. PE retail deals from Jan. 1 to July 12, valued at roughly $5.3 billion, Thomson Reuters says. This compares to 48 deals totaling about $9.5 billion for the same time period in 2012.

Here are the top 5 U.S. private equity investments in retail this year, according to Thomson Reuters.

Photo courtesy of Shutterstock

[slide title=”5. Society6″]

In June, Demand Media acquired Society6, a digital marketplace, for roughly $94 million, MarketWatch reported.

[slide title=”4. SuperValu”]
In January, Cerberus unveiled its New Albertsons deal. Cerberus at the same time said it would lead a group to buy up to 30% of Supervalu’s outstanding common stock for $4 a share. Thomson Reuters is valuing this deal at $256.2 million.

[slide title=”3. Hot Topic”]
Earlier this year, Sycamore Partners announced it would be buying Hot Topic, a teen retailer for about $600 million. The deal closed in June.

[slide title=”2. rue 21″]
In May, Apax Partners agreed to buy rue21 for $42 per share cash or about $1.1 billion. Rue21 is a specialty apparel retailer of girls and guys apparel and accessories.

[slide title=”1. New Albertsons”]

The year’s biggest PE retail deal, and the largest transaction for the sector, is New Albertsons. In January, Supervalu announced it would sell the Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market chains and related Osco and Sav-on in-store pharmacies to a Cerberus led group. The deal was valued at $3.3 billion.