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KPMG Survey: Mergers And Acquisitions Projected To Be On The Rise In 2013

KPMG Survey: Mergers And Acquisitions Projected To Be On The Rise In 2013

Survey Results Show Expected Focus on Middle-market Deals in 2013

NEW YORK, Jan. 22, 2013, Merger and acquisition (M&A) activity is expected to increase in 2013, according to a survey conducted by KPMG LLP, the U.S. audit, tax and advisory firm, and the Research practice unit of SourceMedia, the publisher of Mergers & Acquisitions. The survey of more than 300 M&A professionals in the U.S. found that 76 percent of respondents anticipate that their company will make at least one acquisition in 2013.

According to 60 percent of the M&A professionals, companies’ large cash reserves will drive deal activity and 40 percent acknowledged favorable credit terms as a supporting factor. Opportunities in emerging markets will also be a catalyst for deals, said 26 percent of respondents. Primary reasons for making acquisitions varied among the survey population, with 20 percent of respondents reporting that expanding geographic reach would be their primary motivator, while 19 percent cited a quest for profitable operations, followed by 17 percent who anticipated making acquisitions in order to enter a new line of business.

“Although there is still plenty of uncertainty in the markets, we will likely see M&A activity pick up as the year progresses,” said Dan Tiemann , Americas lead for KPMG’s Transactions & Restructuring practice. “Financing conditions continue to be positive. Many companies are holding large amounts of cash and the U.S. debt markets remain open.” Tiemann also added, “As part of efforts to pursue their growth agendas, companies will look to execute transactions that align with their business priorities and strategic road map.”

Deal size is expected to remain on the smaller side, similar to 2012. Seventy-nine percent of the survey population expects their deals to be valued at $250 million or less, and 12 percent foresee deals valued between $250 million and $500 million. Only two percent expect to engage in deals valued between $1 billion and $5 billion.

The survey results are consistent with marketplace trends, said Phil Isom , U.S. leader for KPMG’s Corporate Finance and Restructuring practice. “Middle-market deals continue to dominate. They are easier to finance and to justify to shareholders in what is still a somewhat uncertain economy,” he said.

The survey also examined respondents’ projections for M&A among specific industries, which indicate possible increased activity in the technology sector (39 percent), healthcare and pharmaceuticals sector (35 percent), and energy sector (31 percent). When asked which region would experience the most deals in 2013, 73 percent of respondents cited North America. Western Europe and China garnered 28 percent and 27 percent of responses, respectively.

Marc Moyers , KPMG’s national sector leader for Private Equity, agrees that technology and healthcare will continue to be attractive, especially for private equity investors. “The constantly evolving world of technology and investment opportunities that arise as we get more clarity around Obamacare will create attractive opportunities in those sectors,” he said. “Private equity investors will continue to seek out U.S. companies with significant upside potential, as well as emerging markets with strong growth opportunities.”

Additionally, nearly two-thirds of the M&A professionals noted that deal activity would likely be most inhibited by recessionary fears and a slow growth environment. Thirty-one percent would credit sluggish deal activity to uncertainty surrounding the tax code, whereas concerns about Europe were cited by 23 percent and regulatory considerations by 20 percent.

Sixty-nine percent of survey respondents said they considered tax implications at the outset on a deal. “Every transaction — merger, acquisition, or restructuring — has tax implications,” according to Lisa Madden , U.S. leader for KPMG’s M&A Tax practice. “How the business is transferred, what jurisdictions the business operates in, and where the acquisition financing is placed within the enterprise can all have a major impact on the way a deal is structured and, perhaps most important, on its final value for stakeholders.”

Integration challenges should also be analyzed at the inception of a deal. Survey results concluded that the most significant integration concerns are cultural issues (38 percent), human capital issues (36 percent), and operational and rationalization issues (34 percent).

With the prospect of significant synergy opportunities and the impetus to pay a higher price for assets to support long-term economic and strategic goals, corporate buyers will have an advantage over private equity buyers in the current deal environment, said 44 percent of the survey population. Thirty percent of respondents thought private equity buyers would have the advantage, while 17 percent responded that neither party would have the advantage.

About the Survey

KPMG LLP engaged the Research practice unit of SourceMedia, the publisher of Mergers & Acquisitions, to survey 305 merger and acquisition professionals from U.S. corporations, private equity firms and investment funds in November 2012. A complete copy of the report is available on the KPMG U.S. website.

KPMG LLP

KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative (“KPMG International.”) KPMG International’s member firms have 145,000 people, including more than 8,000 partners, in 152 countries.

Contact:

Jamie Bredehoft

KPMG LLP

(201) 505-6074

jbredehoft@kpmg.com

SOURCE: KPMG LLP

 

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Credit Finance Financial News Information Market Real Estate Wealth

Forecasted 2013 American Housing Recovery

PCA: All 50 States Expected to Experience Housing Recovery in 2013

2013 Housing Starts Approach the One Million Mark

SKOKIE, Ill., Jan. 18, 2013, Since 2005, tepid economic growth and high foreclosure rates have depressed home prices, bloating inventories and preventing start activity. In 2013, economists are revising nearly a decade of pessimism and forecasting growth throughout the residential construction industry.

A new report from the Portland Cement Association (PCA) projects total housing starts to reach 954,000 units in 2013, reflecting further improvement on 2012’s nearly 30 percent growth.

“The possibility of one million starts in 2013 should not be dismissed,” PCA Chief Economist Ed Sullivan said. “Although the first half 2013 will be mired in a fiscal cliff hangover, we are decidedly optimistic about second half economic growth, job creation and consumer sentiment – all of which translate into a stronger home sales and starts activity.”

Even stronger growth in homebuilding is predicted to materialize in 2014 with starts surpassing 1.1 million.

In another optimistic turn from previous residential forecasts, PCA expects the recovery to be broad-based and is projecting all 50 states will see increases in single family housing this year. Already underway in the interior U.S., the emergence of accelerating construction growth has begun to appear in some of the hardest hit states during the housing bubble burst. These regions are now likely to lead growth in coming years as the long depressed markets begin to return to housing construction rates consistent with their demographics.

“As the recovery unfolds, regions that once lagged recovery now begin to emerge as growth leaders. The Southwest and Southeast, for example, still have the weakest housing fundamentals on a relative basis to the Interior U.S, but on a construction activity basis, given the extremely depressed bases from which these regions are recovering from, they will likely be the housing growth leaders in coming years,” Sullivan said.

PCA expects multifamily construction to continue to grow at a strong pace as favorable fundamentals fuel the sector. Multifamily starts recorded a 55 percent gain in 2011 and 36 percent growth in 2012. PCA expects an additional growth of 15 percent in 2013 to 277,000 units. Damaged credit due to foreclosure activity and tight mortgage lending standards have combined to create robust apartment demand.

About PCA
The Portland Cement Association represents cement companies in the United States and Canada. It conducts market development, engineering, research, education, and public affairs programs. More information on PCA programs is available at www.cement.org.

To obtain a copy of PCA’s analysis of the housing sector, contact Patti Flesher at pflesher@cement.org.

SOURCE: Portland Cement Association

 

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Business School Education Finance MBA Personal Finance

2013 Best Online Business Programs Announced

U.S. News & World Report Announces the 2013 Best Online Education Programs Rankings

Introduces Numerical Rankings for the First Time

WASHINGTON, Jan. 15, 2013,  U.S. News & World Report released today the second annual rankings edition of the Best Online Education Programs. For the first time, programs administered for distance learners that are 100 percent online will be ranked numerically, just like traditional colleges and graduate schools. Online bachelor’s degree programs as well as graduate online degree programs in business, engineering, nursing, education, and computer information technology were ranked. There will be no print component to the Best Online Education rankings; however, U.S. News plans to include highlights in both the Best Graduate Schools 2014 and Best Colleges 2014 printed guidebooks.

Online education allows people to attend school without having to quit their jobs or disrupt their lives. According to Georgetown University’s Center on Education and the Workforce, people with a bachelor’s degree earn 84 percent more than those with only a high school diploma in their lifetimes—making online education, with its flexibility, an increasingly popular option.

And U.S. News is responding with data and rankings to help people sort out the best options for them.

“Online education is becoming an essential part of higher education,” said U.S. News & World Report Editor and Chief Content Officer Brian Kelly . “Our goal has always been to provide our consumers with the most accurate information so that they may make their best decision. Incorporating online education rankings and data is the next step in providing our consumers with the information they need.”

Greatly improved participation from schools and data collection enabled U.S. News to rank online education programs numerically this year. Factors used to compute the rankings this year include retention rates, graduation rates, and the indebtedness of students upon graduation.

Another difference with this year’s rankings is that a small percentage of schools that were evaluated in 2012 were not evaluated for the 2013 edition. This was due to U.S. News converting to the new, federal government definition of distance education programs, meaning that degree-granting programs must offer 100 percent of their courses needed for the degree online.

Online bachelor’s degree programs were ranked in three different categories: student engagement, faculty credentials and training, and student services and technology. All of the online master’s degree programs were ranked in admissions selectivity in addition to the bachelor’s degree categories. The engineering and business master’s programs were also ranked based on ratings of their academic reputation by top academics who run online programs at peer institutions.

Data was collected from both for-profit and not-for-profit schools. There is no distinction between the two in the rankings. For more information about the rankings methodology, please go to www.usnews.com/onlinemeth.

For more information on the Best Online Education Programs rankings, please visit www.usnews.com/education/online-education or find us on Facebook or Twitter.

Best Online Education Program Rankings 2013
* For the full list of rankings, visit
www.usnews.com/education/online-education:

Best Bachelor’s Programs

Best Engineering Programs (Graduate)

1. Pace University (NY)

1. University of Southern California (Viterbi)

2. Daytona State College (FL)

2. Pennsylvania State University – World Campus

3. St. John’s University (NY)

3. Columbia University (Fu Foundation) (NY)

Best Business Programs (Graduate)

Best Nursing Programs (Graduate)

1. Washington State University

1. Ferris State University (MI)

2. Arizona State University (Carey)

2. Lamar University (TX)

3. Indiana University – Bloomington (Kelley)

3. University of Michigan – Flint

Best Education Programs (Graduate)

Best Computer Information Technology Programs (Graduate)

1. St. John’s University (NY)

1. University of Southern California (Viterbi)

2. Auburn University (AL)

2. Sam Houston State University (TX)

3. South Dakota State University

3. Virginia Tech

 

About U.S. News & World Report


U.S. News & World Report is a multi-platform, digital publisher of news and analysis, which includes the digital-only U.S. News Weekly magazine, www.usnews.com, and www.rankingsandreviews.com. Focusing on Health, Money, Education, Travel, Cars, and Public Service/Opinion, U.S. News has earned a reputation as the leading provider of service news and information that improves the quality of life of its readers. U.S. News & World Report‘s signature franchise includes its News You Can Use® brand of journalism and its “Best series of consumer guides that include rankings of colleges, graduate schools, hospitals, mutual funds, health plans, and more.

SOURCE: U.S. News & World Report

RELATED LINKS: http://www.usnews.com

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Finance Gambling Retirement

Downtown Las Vegas Continues Winning Streak

Downtown Las Vegas Continues Winning Streak

 

LAS VEGAS, Jan. 14, 2013, For downtown Las Vegas, 2012 came to be known as the “Year of Downtown” for good reason: at least $754 million in public and private projects came to fruition and an additional $355 million in developments were under construction with most of these scheduled to be completed in 2013*.

 

In 2012, downtown Las Vegas – which does not include the famed Las Vegas Strip and is located just a few miles north – became home to a $485 million performing arts center, a new city hall, two major museums and scores of new businesses. A total of 57 projects were completed, under construction or upgraded in this urban area during the year. “After years of hard work, the city’s highly strategic redevelopment efforts are paying off,” said Bill Arent , director of the city of Las Vegas Economic and Urban Development Department, who also works with the city’s Redevelopment Agency (www.lvrda.org).

 

According to Las Vegas Mayor Carolyn G. Goodman , redevelopment progress is helping downtown reinvent itself as the region’s true center of community, culture and commerce. The new year’s upcoming development highlights include Zappos.com’s $40 million renovations to the former Las Vegas City Hall to accommodate the company’s 1,200 employees, the $56 million Discovery Children’s Museum scheduled to open this spring, the former Lady Luck Hotel & Casino’s $100 million renovation and reopening as Downtown Grand Hotel & Casino in late 2013, and a former Travelodge repurposed into a temporary housing and resource facility for veterans. In addition, Zappos CEO Tony Hsieh is investing $350 million of his personal wealth in the downtown area for venture capital and entrepreneurial assistance for startup companies as well as community improvements.

 

Las Vegas’ 2012* redevelopment stats are impressive by any city’s standards. The businesses and projects completed during the year generated work for more than 5,200 construction employees, as well as 1,500 permanent jobs. Today, more than 1,700 construction workers are employed on projects that will generate more than 1,900 permanent jobs.

 

“A check of recent headlines both locally and globally confirms the new respect for downtown and the renewed energy permeating the area,” said Rich Worthington CEO of The Molasky Companies and president of the Downtown Las Vegas Alliance (DLVA), a nonprofit consortium of more than 40 downtown businesses working to promote the area. The group’s campaign, Rediscover Downtown, targeted to locals, is continuing in 2013 based on its 2012 success.

 

According to Arent, young families, couples and professionals are contributing to a growing population downtown. They are moving into high-rises and gentrifying downtown neighborhoods full of unique homes built in the 1950s and 1960s that stand in direct contrast to typical cookie-cutter suburban homes in planned housing developments. In addition to the re-population of older single-family neighborhoods close to downtown, the area’s high-rises that just a few years ago were less than 30 or 40 percent full are now close to 100 percent occupied. “What a difference the past few years have made,” said Arent.

 

But it’s not just residents who are changing their suburban addresses for more urban locales; many area professionals, including real estate brokers and professional service firms are rethinking their office locations to follow the action. Zappos.com has already moved its first 200 employees downtown to prepare for the 2013 relocation of its company headquarters. The LEV Restaurant Group, which owns and operates more than 35 area restaurants, recently moved into the former Ice House Lounge and invested more than $2 million on renovations; and Denny’s recently opened a flagship diner on Fremont Street, complete with wedding chapel and full-service bar. According to Arent, business relocations are becoming more commonplace as decision makers understand that downtown Las Vegas is at the heart of the action.

 

* 2012 figures based on fiscal year calculations from July 1, 2011 – June 30, 2012
2013 figures based on fiscal year calculations beginning on July 1, 2012

 

For more information about downtown Las Vegas’ successful redevelopment efforts, visit lvrda.org.

 

SOURCE: Las Vegas Economic and Urban Development Department

RELATED LINKS: http://lvrda.org

 

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Finance Personal Finance Polls Retirement

CIBC Poll: Majority of Canadian Retirees happy with retirement today – but worried about running out of money over the long term

CIBC Poll: Majority of Canadian Retirees happy with retirement today – but worried about running out of money over the long term

Some retirees vulnerable to short term financial shocks, and have long term concerns about making their money last

TORONTO, Jan. 14, 2013,  A new CIBC (TSX: CM) (NYSE: CM) poll conducted by Leger Marketing reveals that most of Canada’s retirees feel positive about their current finances in retirement, saying they are living the retirement they hoped for today. However, some retirees are concerned they won’t be able to sustain their lifestyle over the long term and worry that they will run out of money at a future date.

Key poll findings include:

  • 69 per cent of retired Canadians said they are currently living the retirement they hoped for.
  • However, 28 per cent said they are afraid of running out of money for their retirement over the longer term.
  • Regionally, retirees in Quebec and Manitoba and Saskatchewan were among the most likely to say they are currently living the retirement they planned for (74 per cent), while retirees in British Columbia were among the least likely (60 per cent).
  • British Columbia retirees were among the most likely (45 per cent) to say they are afraid of running out of money for their retirement, while Atlantic Canadians were among the least likely (21 per cent)

“While it is positive to see that a majority of retired Canadians are living the retirement they hoped for, our poll findings also show there is concern around whether their retirement savings will sustain them in the years to come,” said Christina Kramer , Executive Vice President, Retail Distribution and Channel Strategy, CIBC. There are some unique factors facing today’s retirees as they look to the years ahead, including low interest rates on savings and the need to make their retirement funds last longer than previous generations, which makes long range planning even more important.”

Planning Doesn’t End With Retirement

While many Canadians focus on how much they need to save in order to reach retirement, it is just as important to focus on how you will convert your savings to income that will last throughout your retirement.

  • Only 62 per cent of retired Canadians say they have a plan to help them determine how long their savings will last and how much they can withdraw each year to support their lifestyle.
  • Among those with a plan, there was a even split in how they developed their plan – with 31 per cent saying they have a plan with an advisor and 31 per cent saying they have a plan they developed on their own.

“Having a plan you can be confident in can contribute to your peace of mind and allow you to enjoy your retirement with a clear view of how you will make your finances work over the long term,” noted Ms. Kramer. “Considering the number of factors retirees face today, a conversation with an advisor can help ensure all components of your retirement are accounted for.”

Ms. Kramer also noted that those doing their own planning would likely benefit from reviewing their plan with an advisor. “Even if you choose to do much of your own planning when it comes to your finances, an advisor can serve as a useful sounding board to check your assumptions and offer solutions you may not have considered.”

Retirees More Vulnerable to Financial Shocks

While the concerns of today’s retirees were primarily focused on the long term, poll results also show that more than half of retired Canadians indicate that a short term financial shock could create a challenge in managing cash flow:

  • Given their current income and cash flow, 54 per cent of retired Canadians said that taking on a new $500 monthly payment would be unmanageable
  • Within this group, 34 per cent said it would be very unmanageable and 19 per cent said it would be somewhat unmanageable

This suggests that some retired Canadians may not be financially prepared to pay for costs associated with an unexpected emergency – such as needing a new roof or replacing a car – which could add to their concerns about running out of money in the future.

“It’s important to plan for your long term retirement goals, but your plan should also include an emergency savings component,” said Ms. Kramer. “You may have to reevaluate how much you are able to withdraw each year to ensure you do have savings that could be used in the event of an emergency to avoid taking on a new monthly debt payment that can impact your lifestyle.”

Financial Advice for Retired Canadians

  • Meet with an Advisor to review your finances – You need to understand how much income you generate from your savings combined with your pension or income you continue to earn. This will help you determine what level of retirement expenses are appropriate for you and allows you to make changes to your retirement strategy today if required.
  • Minimize and eliminate debt – One of the most effective ways to make your retirement savings go further is to minimize or eliminate debt repayment in retirement. This reduces interest costs and increases cash flow.
  • Plan for tomorrow – today’s retirees’ are living longer, healthier lives. An advisor can help you develop a comprehensive plan that ensures you have the financial ability to live the retirement you hoped for throughout your retirement, regardless of any unexpected emergencies that may arise.

For Reference – Summary of Key Data

Percentage of retired Canadians that said they are currently living the retirement they hoped for, by region:

National Average

69%

BC

60%

Alberta

66%

Man/Sask

74%

Ontario

70%

Quebec

74%

Atlantic Canada

71%

Percentage of retired Canadians that said they are afraid of running out of money for their retirement, by region:

National Average

28%

BC

45%

Alberta

29%

Man/Sask

32%

Ontario

26%

Quebec

23%

Atlantic Canada

21%

Percentage of retired Canadians that given their income and cash flow, taking on a new $500 loan payment would be unmanageable, by region:

National Average

54%

BC

66%

Alberta

39%

Man/Sask

50%

Ontario

50%

Quebec

60%

Atlantic Canada

52%

Results are based on a CIBC poll conducted by Leger Marketing, via a Web survey. These data were gathered in a sample of 867 retired or pre-retired Canadians between September 18 and 21, 2012.

CIBC is a leading North American financial institution with nearly 11 million personal banking and business clients.

CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada, and has offices in the United States and around the world. You can find other news releases and information about CIBC in our Press Centre on our corporate website at www.cibc.com.

SOURCE: CIBC