Leading local firms now LBO candidates?

A recent report by financial services giant UBS is causing a little heartburn among Tampa Bay corporate types following recent losses of other large local firms to mergers or relocation.

Clearwater-based Tech Data Corp. and St. Petersburg-based Jabil Circuit Inc. — the top two companies on the Business Review's Gulf Coast 500 last year — are counted among 27 that may be targets for leveraged buyouts. Also included is Lincare Holdings Inc., also of Clearwater, which ranked No. 15 on our list.

The LBO list was compiled by Randy Udell and Ben Canet of UBS' U.S. special-situations equities sales team and reported by Barron's. The list was created by screening for multiple financial and business criteria, including the assumption that a private equity buyer could offer at least a 15% premium above the companies' recent stock price.

“These stocks are attractive, based on valuation, and generate a lot of free cash,” Udell told Barron's. The UBS list largely focuses on retail companies, but doesn't include many of those as complex as those based locally.

Added Barron's: “Even if no deals materialize, these stocks could do well. The virtues that make them appealing to private-equity outfits could make them attractive investments.”

Coffee Talk guesses maybe there isn't anything to worry about after all, and the fact that some of our local corporate giants wind up on such a most-wanted list should be taken as a compliment.