WorldTrade March 2014 : Page 13

Growth in M&A More M&A expected, despite modest economic expectations 46% engaged in M&A or external growth activities in 2013 Source: Capstone Strategic 63% are considering M&A activity in 2014 ated $5.3 billion in free cash flow, enabling reinvestment for growth,” says Scott Davis, UPS chairman and CEO. “In addition, we increased our shareholder distributions, paying dividends of $2.3 bil-lion and repurchased more than $3.8 billion in UPS shares. This latest dividend increase shows that the UPS business model consistently generates improved returns to shareowners.” SC Ports Increase Intermodal Rail Lifts by 50% INLAND PORTS ARE EXPECTED TO HELP DRIVE INCREASES The Port of Charleston increased its intermodal rail volume by 50 percent since 2011, thanks to efforts aimed at capturing discretionary cargo from major points in the Southeast, Gulf, Midwest and Ohio Valley. International intermo-dal rail lifts in Charleston increased 18 percent in 2013 to nearly 145,000 containers. This followed a 27 percent increase in 2012. New initia-tives, including the Rapid-Rail drayage program and the South Carolina Inland Port in Greer, are expected to con-tinue driving increases in rail container traffic. The growth in rail container traffic is also the result of the SCPA’s collaboration with ocean carriers to recruit and direct discretionary cargo to and from Memphis, Atlanta, Nashville, Louisville, Chicago and Cincinnati. RapidRail, launched by SCPA in April 2012, has also positively impacted rail move-ments at the port. The program coordinates container move-ments to and from rail yards, and RapidRail accounts for 85 percent of rail drays. wt www .w orld Mergers, Acquisitions Increase Expected SURVEY SAYS M&A EXPECTED TO BE KEY GROWTH STRATEGY FOR 2014 Capstone Strategic surveyed 75 midmarket executives from multiple industries on their growth and M&A (mergers and acquisitions) outlook for 2014. The survey was con-ducted in December 2013. More than half of the respondents (54 percent) expect increased M&A activ-ity in their industry in 2014. An even higher number (63 percent) expressed interest in pursuing M&A in 2014. The predicted rise in M&A activity exceeds expectations for the overall economic envi-ronment. Most midmarket executives polled anticipate flat or moderate economic growth, and 59 percent are concerned about the political and regulatory environment, including effects of the Afford-able Care Act. David Braun, Capstone’s founder and CEO, noted, “We believe the bear cycle in midmarket M&A is coming to an end. Despite an uneasy environment, there is pent up demand for acquisitions as companies continue to experi-ence anemic organic growth. They can’t continue doing more of the same.” Supporting this interpreta-tion, only 5 percent of respon-dents expressed satisfaction with their current level of growth. While midmarket execu-tives seem to be taking renewed interest in M&A, they per-ceive hurdles to embracing external growth. Fifty-four percent see their largest chal-lenge as assembling sufficient resources. Twenty-eight percent report that they are concerned about the lack of suitable companies to purchase. Based on its survey, and firsthand contacts with the market, Capstone predicts an overall rise in M&A activ-ity in the midmarket sector. Braun’s advice to executives is to seize the opportunities inherent in the new trend, or risk being left behind. He says, “External growth can mean many things, and 100 percent acquisition is only one option. The key is to be creative, seek good advice from experienced practitio-ners, and look for new ways to grow by engagement with other companies.” The full survey can be viewed at UPS Board Increases Quarterly Dividend REGULAR QUARTERLY DIVIDEND UP $0.05, OR 8.1%, PER SHARE The UPS Board of Directors declared a regular quarterly dividend of $0.67 per share, up $0.05 (or 8.1 percent), from $0.62 per share, on all outstanding Class A and Class B shares. The dividend increase is in recognition of the company’s solid cash flow performance and commit-ment to delivering shareowner value. The dividend is payable March 11, 2014, to shareown-ers of record on Feb. 24, 2014. “During 2013, UPS gener-13

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