Louisiana Sees Decline in M&A Deal Value in 2022 Despite Similar Number of Transactions
Louisiana saw a significant decline in the value of mergers and acquisitions in 2022, with 206 transactions announced or closed, according to New Orleans CityBusiness. Despite the number of deals being similar to the previous year, the disclosed transaction value fell from $21.1 billion in 2021 to $9.6 billion in 2022. This decrease reflects a broader trend across the U.S., with total U.S. deal value declining 43% to $1.53 trillion in 2022, according to Dealogic.
Most of the transactions in Louisiana involved privately owned companies, which did not disclose the sale price. This makes it difficult to determine the exact reason for the decline in transaction value, but it could be due to various factors, such as the ongoing pandemic and its impact on the economy.
The largest deal announced in Louisiana in 2022 was the pending merger between LHC Group and Optum, a subsidiary of UnitedHealth Group, valued at $5.4 billion. This deal highlights the continued interest of large corporations in acquiring smaller companies in Louisiana, despite the decline in transaction value.
The pandemic has also affected office spaces in Baton Rouge, with an overabundance of available space. According to Branon Pesnell from Corporate Realty, the pandemic has resulted in downsizing and remote work, leading to a decrease in office occupancy.
Pesnell is currently working on an office sector report for TRENDS, along with Jonann Stutzman from Latter & Blum and Gary Black from Wampold Companies. He expects Baton Rouge's office occupancy to be 5-10% lower than in previous years, due to the current economic environment. He also predicts a slowdown in the development of new garden office projects, as utilization levels are low and investors are turning away from office properties.
Despite the challenges faced by the office sector in Baton Rouge, the city remains a hub for business and commerce, and is likely to continue attracting new investment in the future. The Louisiana government has implemented various measures to support businesses and stimulate economic growth, such as tax incentives, grants, and loans. These initiatives, combined with the state's strategic location and abundant resources, make Louisiana an attractive destination for companies looking to expand their operations.
While the pandemic has affected the value of mergers and acquisitions in Louisiana, the state remains a promising destination for businesses looking to grow and expand. The Louisiana government is taking proactive steps to support the business community and boost the local economy, making it an attractive destination for investment in the coming years.