2013 has good potential for more acquisitions

The acquisition of Aviva USA by a new corporate owner could prove a positive development for Greater Des Moines, said Steve Zumbach, a partner with the Belin law firm who specializes in mergers and acquisitions.

“We’ve had some experience in Greater Des Moines with our local insurance companies being purchased going way back,” Zumbach said. He noted that of two earlier sales of the company prior to Aviva “both were positive for our community in capital investment and jobs added to our community.”

In late December, London-based Aviva PLC announced plans to sell its Aviva USA subsidiary to Athene Holding Ltd. The combined company will continue to be based in West Des Moines, company officials said.

A year ago, FBL Financial Group Inc. completed the sale of its EquiTrust Life Unit to Guggenheim Partners. Other major insurance acquisitions in Greater Des Moines have included Nationwide’s purchase of Allied Insurance, which led to significant expansions of its downtown headquarters, and ING Groep NV’s purchase of the Equitable Group, which also led to more office space construction downtown.

“One thing this community does well is that it positions itself very quickly to be welcoming,” Zumbach said, “so that the acquiring company understands it’s valuable and welcome to be here.”

Overall, 2013 should provide a good environment for merger and acquisition activity, in Zumbach’s estimation. “There’s a lot of money available for both debt and equity investment – that creates a lot of opportunity. And with low interest rates, it certainly makes deals easier to do,” he said.

“But at the same time, there’s a great deal of uncertainty, and that negatively impacts deal flow.”

Small business owners confident despite economy

American business owners are pretty optimistic about the health of their businesses but lack confidence in the economy, according to the most recent Principal Well-Being Index: Business Owners.

Nearly half of the business owners surveyed prior to the November election said they are cautious about the economic outlook for 2013, and two-thirds said they are holding off on making long-term financial commitments because of the state of the economy.

Des Moines small business owner Mike Draper said economic uncertainty won’t keep him from upgrading his company’s online shopping cart. His East Village T-shirt shop and online sales business, Raygun, employs 14 people.

“We made plans a few months ago to expand in the spring,” he said. “We’ll go ahead with that regardless of what John Boehner does.”

Draper noted that year-end uncertainty isn’t new for Congress, which just a year ago was deadlocked over the debt ceiling.

“We actually feel pretty good about everything,” he said. “From the ground-floor perspective of us and companies we work with, things started picking up last September or so.”

In a separate survey of U.S. workers that Principal conducted in December, gasoline prices topped economic uncertainty as the most-cited concerns for 2013. Fifty-nine percent of respondents said they were concerned about gas prices, while 53 percent listed economic uncertainty. Health-care costs, food prices and increased taxes commitments were also among top concerns for employees.

Forty-three percent of workers anticipate economic improvements next year, an increase from 32 percent in the third quarter.

Despite decreasing confidence in the economy, significantly fewer workers (36 percent), said they are stressed about their personal finances, down from 42 percent in the third quarter.