Deal Professionals Try To Remain Active
January 19, 2009
As the New Year kicked off, the credit marts remained frozen and business seller expectations high.
The ingredients needed to construct a successful transaction are still largely absent. It almost makes one want to throw in the towel, but thankfully the investment bankers and private equity executives that make up the ranks of the middle market deal community aren’t following the example set by legendary boxer Oscar de la Hoya in his bid last month to unseat Philippine pugilist Manny "Pac-Man" Pacquiao last month. After being battered by the southpaw for eight rounds, de la Hoya gave up and refused to step back into the ring in the ninth round.
Boxing fans, to say the least, weren’t thrilled.
For bankers and buyout executives, the debt market conundrum, lofty company seller valuations and recession are the equivalent of the blows thrown by a top-rated boxer. What rationale can there be for hitting the road, visiting clients or trying to structure a transaction when so much resistance is being thrown your way?
But, that’s exactly what the mid-sized players have been doing since the M&A market locked up in the fall. Rolling with the punches, it turns out, has paid off for the investment banks and buyout firms that have continued to ply the middle market. Harris Williams & Co., Lincoln International, Watch Hill Partners, Wells Fargo and William Blair & Co. are continuing to seal deals on the banking side, while Arbor Investments, Darby Overseas Investments, Vector Capital and Warburg Pincus have also executed recent private equity deals.
The aforementioned isn’t meant to be advertorial for the banks and private equity firms mentioned, nor meant to exclude a host of other active market participants. Heck, just about every buyout executive and investment banking executive I speak with these days say they’re busier than ever despite the depressed state of the credit markets and economy.
It’s meant to say that some participants in the deal market are doing more than just hanging on the ropes; some are still reaping fees and deploying capital despite the dislocation in the capital markets.
Why?
They’re stepping into the ring.
Kelly HolmanKelly.holman@sourcemedia.com
1 Comments
This is a great time for disciplined strategic buyers to find value throughout most business sectors. Recently, I listened to a panel discuss falling valuations and the catch a "falling knife" metaphor still sticks in my head.
There is no question that healthy company valuations are suffering right along with troubled companies.
Many smaller and under-capitalized firms will accept buyouts on asset based agreements to procure some upside for their business rather than struggle through an unpredictable next year/s and risk losing everything.
Here’s how:
Build a smart team,
Create a smart plan from start to finish:
*determine precisely what fits–weighted averages criteria model
*plan for transition and monitoring of all aspects of transaction integration
Build a big list,
Contact everyone with a basic friendly invitation to talk
Manage and track information (use modern tools for data tracking)
Monitor progress and make adjustments
A smart team executing a good plan will do well in this market (and not get stuck). Mike@packardacquisitions.com
Posted by: mike t | February 25, 2009 7:03 PM
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