An e-mail went out last month to Robert Greiner, the researcher who tackled our
report on 1999’s mergers and acquisitions. It asked him to check on a Northern
Virginia company that was involved in an acquisition in the $100 million range. Last
year’s cutoff to make the top 10 was $61.5 million, so it seemed in the ballpark.
Greiner e-mailed back that he hadn’t run across it: "But I looked it up and its
acquisition was worth about $110 million, which isn’t nearly enough to make the top
10 this year. I doubt it ever will be again."
Ominous words. Can the deals get any bigger? In what was then the biggest announcement
ever, Exxon Corp. said it would purchase Fairfax-based Mobil for $81.4 billion. That deal
tops this year’s list. If all goes as planned, though, it will be a distant memory
when America Online seals its deal with Time Warner. When that deal was announced, it was
valued at $160 billion — a hefty chunk of change.
This year’s No. 10, incidentally, was Nextlink Communications’ $695 million
purchase of the wireless spectrum licenses of Virginia’s WNP Communi-cations Inc.
That figure alone is $288 million higher than the biggest merger and acquisition of 1998.
The top stock deal of 1999 was a secondary offering by AES Corp. that raised $801
million. It didn’t quite top 1998’s No. 1, in which Freddie Mac raised $975
million in a secondary offering. AES, an energy company, is still a capital king. Wall
Street typically frowns on companies that repeatedly dip into the capital markets, but AES
is a notable exception. It has repeatedly — and successfully — tapped the
capital markets to help acquire power-generating capacity here and abroad. The company
raised $13.4 million in two separate secondary offerings and another $450 million through
its AES Trust II.
All but one of this year’s top stock deals are secondary offerings. The lone IPO
was wireless provider and AT&T affiliate Telecorp PCS Inc. of Arlington.
The list of largest contracts also has some impressive numbers, although even the
largest — $850 million over 10 years — is much smaller than last year’s top
two contracts, which were worth $2.2 billion and $1 billion, respectively, over 10 years.
Nevertheless, this year’s winner — Fairfax-based Anteon Corp. — has a
loyal customer in the federal government’s General Services Administration.
Anteon’s decade-long relationship with the GSA was again rewarded in 1999 with an
$850 million contract.
The real estate wrap-up for 1999 is decidedly Northern Virginia-centric. It’s
understandable, as property is hard to come by in this fast-growing region. This
year’s most expensive property transfer was Lincoln Place, a two-building, 12-story
office complex in Pentagon City, which sold for $156 million. There were significant deals
outside metro D.C. that aren’t listed here: Richmond’s Byrd Center sold for
$15.3 million and the Interstate Corporate Center in Norfolk, formerly known as Koger
Center East, sold for $27.3 million.
The real estate report has been difficult to pull together, in part because
there’s sometimes a lag between when a deal closes and when the price is public
record. Two properties slipped through the cracks in our 1998 listing: An unnamed German
investor purchased Fairfax Square for $108 million from the Teachers Insurance and Annuity
Association in New York. The property cost nearly $200 per square foot, likely the highest
sales price in the area. The deal closed in December 1998.
To make the cut in the reports on the following pages, deals had to have been closed in
1999, not just announced. We’ve included those deals we could identify, and apologize
for inadvertent omissions. Please let us know if there’s anything we should include
in next year’s report, where the numbers could be even bigger. Maybe then we’ll
be able to answer our question: How high is up?
— The Editors
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