It was a busy Monday for Mergers & Acquisitions with two big brands announcing consolidations: Zillow will buy Trulia and Dollar Tree will buy Family Dollar. Activity is getting frothy and as I’ve been saying, the sleeping dragon is starting to wake up.
Here’s what you need to know about these transactions:
Zillow to acquire Trulia for $3.5 billion
- Together Zillow and Trulia will dominate online real estate.
- Zillow has 83 million users and Trulia has 54 million users, about 61% of the market.
- Zillow is currently most popular among homeowners while Trulia is popular among sellers.
- The all-stock deal is expected to generate $100 million in cost savings by 2016.
- Zillow will pay a price premium of 25%.
Dollar Tree to buy Family Dollar $8.5 billion
- Earlier this year, activist Carl Icahn pressured Family Dollar to explore selling .
- Together Dollar Tree and Family Dollar have 13,000 stores in 48 states and Canada and $18 billion in revenue.
- Family Dollar will be kept a separate brand.
- $300 million in cost savings are expected by 2018.
- Dollar Tree will pay a price premium of 23%.
Expect More M&A Activity
M&A activity is hot across many markets, even white hot in some markets like tech enabled healthcare. M&A in the U.S. was up 63% for the first six months of 2014. We’ve seen historically that as large deals take place, this activity starts to trickle down to the middle market and lower market. All signs indicate M&A activity is becoming extremely robust.
If you’re sitting on the sidelines, I recommend you seriously consider acquisition opportunities. Even if you’re not pursuing acquisition, there may be transactions that affect you. Your customers, clients or even competitors could acquire or be acquired. I invite you to join our monthly Capstone webinars to learn practical tips for acquisitions and stay up-to-date on the latest M&A activity:
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Photo Credit: Jodie Wilson via Flickr cc