The sale of one of Tampa Bay's core — if kitschy — public corporations like HSN does not happen often. QVC's announced multi-billion-dollar purchase of HSN this past Thursday will continue to send ripples through the regional economy for years. Yes, Tampa Bay loses a major public corporate headquarters — its seventh largest by market value — but gains a financially more muscular parent company that we need to learn more about. The deal also reminds us what happens when the stock market soars, empowering public companies with added value that can be used to buy other companies and grow. Here are five takeaways to ponder:
• Are we suddenly infected by merger-and-acquisition fever by Fortune 500 companies? On Thursday St. Petersburg's HSN was acquired for $2.1 billion (plus $500 million in debt) by QVC, whose parent Liberty Interactive is a Fortune 500 corporation. The deal caps a recent binge of area mergers and acquisitions. Fast growing and privately owned tech firm Tribridge, a Tampa-based IT services integrator and past Inc. 5000 member, was bought by recently merged and now publicly traded DXC Technology — also a Fortune 500 business. And in May, Tampa pharmacy benefits company myMatrixx was acquired by Fortune 100 company Express Scripts. To say Tampa Bay companies are on the radar of big U.S. corporations eager to leverage their rising stock prices as currency would be an understatement.
• The purchase of TV/digital retailer HSN of St. Petersburg means the end of another publicly traded corporation based in Tampa Bay. As HSN becomes part of buyer QVC, it also means another locally based corporation gets to replace HSN in the ranks of the top ten public companies headquartered here. HSN was No. 8 but will fall off this list once the QVC deal is completed later this year. Moving up to No. 10 and filling out the new top 10 will likely be St. Petersburg's United Insurance Holdings. That leaves half of the area's top 10 public companies based in Tampa, three of the top 10 based in St, Petersburg, one based in Clearwater and one in New Port Richey. Until the next deal.
The Top 10 based on their recent market value:
1. Raymond James Financial, St. Petersburg: $11.3 billion
2. WellCare Health Plans, Tampa: $8 billion
3. Jabil, St. Petersburg: $5.3 billion
4. Tech Data, Clearwater: $3.9 billion
5. Welbilt, New Port Richey: 2.7 billion
6. Masonite, Tampa: $2.2 billion
7. Bloomin' Brands: Tampa $2.1 billion
8. HSN, St. Petersburg: $2.1 billion
9. Cott Corp., Tampa: $1.8 billion
10. Sykes Enterprises, Tampa: $1.4 billion
• Observers of the HSN acquisition by QVC and its parent Liberty Interactive, point to the perfect timing of the $2.1 billion deal, which was paid for in QVC stock. Starting in May, QVC's stock became more valuable deal currency as HSN continued to get cheaper. Both HSN and QVC have big challenges. HSN said recently its median customer age is 58 but that it's trying to attract "millennial moms" who probably associate the network with their grandmothers. As Bloomberg notes, the biggest risk will be that QVC management has "taken on too much" and now must turn around both QVC and HSN.
• HSN's $2.1 billion sale to QVC sure sounds like a big transaction. But where does this deal land in the mix of big acquisitions of Tampa Bay based companies? Other transactions over the decades have been far larger. Here are three: The $5.3 billion sale of Florida Progress Corp. (parent of local electric utility Florida Power) to Carolina Power & Light (later bought by Duke Energy) occurred in 2000. (Imagine that deal value in today's dollars.) Clearwater oxygen provider Lincare was bought in 2012 by Germany's giant chemical business Linde for $4.6 billion. And in 2016, Canadian energy company Emera completed its purchase of Tampa-based TECO Energy, parent of Tampa Electric and two gas subsidiaries for the whopping price of $10.5 billion. Sorry, HSN, your sale to QVC is not quite a chart topper, even by local standards.
• It will soon be time to welcome QVC, HSN's soon-to-be new owner, into the Tampa Bay business community. So you better know something about the West Chester, Pa., company. Here are three insights.
1. What does "QVC" actually stand for? Quality. Value. Convenience.
2. Who is the real power behind QVC? Media billionaire John Malone, who controls Liberty Media (which owns the Atlanta Braves) and Liberty Interactive (which owns QVC). Malone, 76, is worth $7.6 billion and currently ranks No. 199 on Forbes' list of world billionaires.
3. HSN was launched soon after an advertiser on "Uncle Bud" Paxson's Clearwater radio station gave him 118 can openers as payment. The station quickly hawked all of them on air. Paxson and business partner Roy Speer then launched what became known as Home Shopping Network on cable TV in 1982. Four years later, competitor QVC went live on cable TV with host John Eastman presenting a "Windsor Shower Companion" (an AM/FM clock radio) for the on-air price $11.49. Its regular price: $19.95 — of course. Since then QVC has grown, by market value, to five times the size of HSN.