As we move into 2018, analysts and investors have begun to predict what mergers will occur in the new year. Many companies are rumored to be interested in sales and acquisitions, while others are facing pressure from investors to make a change.
A Loup Venture analyst forecasts Amazon will acquire Target in 2018 in a deal valued at $41 billion. The analyst believes Target is an ideal acquisition for the online retailer because of the two companies' shared demographic and Target's large, but manageable, store count.
He notes Target's focus on moms fits Amazon's approach to win wallet share, as it has pursued this consumer group over the years through promotions around Prime. Amazon has also shown its interest in developing a combination of offline and online operations through its acquisition of Whole Foods Market and its Amazon Go trial. He also claims antitrust authorities would approve the sale because an Amazon-Target combination would still have a smaller market share than Walmart.
Meanwhile, investors are putting pressure on Casey's General Stores to sell the chain. JCP Investment Management LLC, BLR Partners and shareholder Joshua Schechte, which together own a 1% stake, sent a letter to the company claiming it has missed earnings targets because of "decelerating same-store sales and bloated operational expenses," reported Des Moines Register (Jan. 3).
Casey's CEO Terry Handley says the company is focused on increasing shareholder value by accelerating "same-store growth and returning cash to shareholders through share repurchases and a steadily increasing dividend." JCP and Schechter claim Casey's " has been unable to manage growth effectively."
People familiar with the matter claim Google is exploring a potential sale of Zagat, its restaurant review site. Sources claim any deal would likely involve the Zagat brand name and website, reported Fortune (Jan. 4). Google acquire Zagat in 2011, but gradually placed less importance on it as it became more focused on is Google+ social network. It currently uses Zagat reviews in its Google Maps service.
Lastly, Muscle Maker Grill plans to accelerate acquisitions in 2018 via a $19 million Regulation A+ IPO. The offering, which the company expects to to complete and list in January, was previously approved by SEC, reported Forbes (Jan. 3).
The company grew revenues by 59% from 2015 to 2016 and intends to grow revenues between 30% and 50% per year going forward. Twenty-five percent of the proceeds from the IPO are earmarked for acquisitions to accelerate growth.
Keep tabs on these potential deals and others in the coming year here in the Food Institute Blog and in our Today in Food newsletter.
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Jennette has been with The Food Institute since 2013. As Marketing Director, she is responsible for promoting all Food Institute books, seminars and webinars, as well as writing and editing the Food Institute’s annual publications, such as Food Business Mergers & Acquisitions, The Food Industry Review and The Almanac of the Canning, Freezing, Preserving Industries. Additionally, she writes for and edits the daily news update, Today in Food, and contributes to the weekly Food Institute Report. She has a background in non-profit and environmental marketing, programming and writing, and graduated from Rowan University in 2012 with a degree in Communication Studies.
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