Strategic Activity Thrives in 1998

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Fueled by Internet-related activity and a strong economy, strategic transactions climbed 28 percent to a record 1,846 deals worth $29.4 billion in 1998 according to investment bank Gruppo, Levey & Co., New York.


The bank's annual DM Strategic Transactions Index, which includes mergers and acquisitions, joint ventures/strategic alliances, initial public offerings, new ventures and bankruptcies and closings, has grown at annual compound rate of 30.6 percent.


Gruppo, Levey president Claire Gruppo said direct marketing expertise was in high demand from e-commerce startups due to the fulfillment, customer service and database infrastructure that DM companies already have in place. A desire by these Internet players to raise capital through IPOs saw that category jump 72 percent to 31 total offerings.


Acquisitions comprised the most deals in 1998, rising 28 percent to 602. The largest deals were Office Depot's $2.9 billion purchase of Viking Office Products and Cendant's $1.6 billion purchase of UK-based National Parking Corp. Internet services firm iXL Enterprises made the most acquisitions with 12 overall.


Strategic alliances were up 88 percent to 499 deals while equity investments jumped 102 percent to 178. Bankruptcies and closings dropped 13 percent to 35 total.
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