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10/22/2010
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$1.50/OCTOBER 25 - 31, 2010
Vol. 31, No. 42
Merger and acquisition activity stirs Investors find environment favorable for buying recession-resilient companies By DAN SHINGLER dshingler@crain.com
A look around Northeast Ohio’s industrial landscape makes one thing quickly apparent: It’s a great time to sell a company.
And if local investment bankers, private equity managers and manufacturers themselves are any indication, the pace of mergers and acquisitions is only going to continue, if not accelerate, at least through the end of this year. Driving the deals is
a combination of coming tax changes, newly available cash, rising company valuations and a group of sellers that’s been kept out of the market for two years. “There are some really fine companies out there for sale,” said investment banker Ralph Della Ratta, managing director of Western Reserve Partners in Cleveland. A few of them already have been bought.
Fairmount Minerals of Chardon is cited by some in the M&A arena as the first large local company to take advantage of the new environment. In August, its owners sold a controlling stake to a New York private equity firm, American Securities Capital Partners. The sum was not disclosed, but the deal involved at least $775 million in debt that observers said probably could not have been raised in 2009.
Since then, the deals have come with increasing frequency and, as was the case with Fairmount, they’ve involved big names in the region’s industrial economy. Solon-based Keithley Instruments, which employs 550, announced Sept. 29 that Danaher Corp. was buying the maker of test and measurement instruments for $300 million. Cleveland-based Hawk Corp. See DEALS Page 5
PNC grapples with glut of empty space Bank offers subleases on eight area buildings By STAN BULLARD sbullard@crain.com
Though fresh tenants are coming, a tough economy and new rivals put pressure on what once was the hottest office market in the suburbs
From downtown Cleveland to Brook Park, PNC Bank is offering to sublease oodles of office space as the impact on the real estate market of its acquisition of National City Corp. and its subsequent cost-cutINSIDE: PNC’s ting efforts bewide open spaces. gins to surface Page 7 publicly. Friedman Real Estate Group, a brokerage in Farmington Hills, Mich., that often handles PNC properties, lists for sublease eight PNC offices totaling 374,000 square feet in the Cleveland area. They include 118,000 square feet at the old National City Bank Building, 1965 E. Sixth St. See PNC Page 7
By STAN BULLARD sbullard@crain.com
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handful of notable office tenants have made modest splashes recently with their leases in the Rockside Road area, but the economy’s ongoing weakness is washing away the impact of those gains the same way that waves last only briefly from rocks thrown in a downhill stream. Though the leases are welcome developments, the ebb and flow of leasing activity along and near Rock-
side raises the question of whether a structural change may be afoot in what once was the region’s fastestgrowing office market. Robert Redmond, managing director of the Cleveland office of Mohr Partners, said he believes the development over the last decade of office markets in Richfield, Hudson and Akron’s Fairlawn area — all south of Rockside Road and the city of Independence — are sapping the office demand that created waves of building on Rockside in the 1980s and 1990s. See ROCKSIDE Page 14
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EVENT PLANNING Exhibitors have a tight window of opportunity to pull off home and garden shows ■ Page 15 PLUS: SOCIAL MEDIA ■ RESTAURANT WEEK ■ CSU ■ & MORE
INSIDE Cavs begin new season armed with challenges The Cavaliers open their season Wednesday against the Boston Celtics, with new faces in the front office and on the bench. General manager Chris Grant must rebuild the team’s roster, but can the Cleveland Cavs attract another superstar? Read Joel Hammond’s story on Page 3.