From sparks to flames: utah's M&A transactions are fleating Up.

• Author: Francom, Sarah Ryther

After several years of sparse merger and acquisition (M&A) Piactivity following the Great Recession, Utah's M&A transactions are heating up. This year's first billion-dollar deal took place July 23, when Fusion-io was acquired by California-based SanDisk Corporation for $1.1 billion.

Founded by David Flynn and Rick White in 2006, Fusion-io quickly became one of Utah's tech darlings as it outpaced its competitors time and again in the development of its flash-based hardware and software that significantly enhances data processing. Fusion-io's acquisition by SanDisk is another Utah success story and one example of how Utah's M&A activity is on fire.

Starting to Sizzle

Between 2009 and 2011, Utah experienced a significant drop in M&A activity. A mere 31 transactions were reported in 2009, dropping further to 27 in 2010 and to 24 in 2011, as reported by MountainWest Capital Network. But as the economy improved, and as companies gained confidence and recognized the need to grow, the state's M&A scene exploded. Utah experienced 110 M&A transactions totaling $10.1 billion in 2012, and 173 transactions in 2013 totaling nearly $6 billion.

"When 2012 and 2013 hit, there was a buildup of cash in companies, and they became motivated to put that capital to use," says Drew Yergensen, vice president of commercial banking at KeyBank and chair of MountainWest Capital's 2013 deal flow committee. "It was a perfect storm with more certainty, larger reserves of cash, and private equity providers that could provide capital at attractive values that were better than the public market."

Yergensen says 2012 was a record year for M&A activity with the acquisitions of Ancestry.com, Schiff Nutrition International Inc. and CHG Healthcare Services each reaching $1 billion, as well as the $2 billion private equity acquisition of Vivint. Utah's largest M&A transaction during 2013 was Huntsman's takeover of Rockwood for $1.38 billion, followed by Energy Capital Partners' private equity acquisition of EnergySolutions for $1.2 billion. Utah's tech industry accounted for 40 percent of all M&A activity during 2013, with software and healthcare (within the tech sector) in the lead.

Though it's too early to analyze 2014 M&A activity, Yergensen says Utah is off to a great start. "It seems like there's much more attention from capital providers in Utah," he says. "We now have two or three real notable venture capital and private equity firms that work here. And we have a number of...