Redefining M&A
July 30, 2009
The future of M&A advisory, at least in the eyes of Bruce Wasserstein, is not so much about the deal anymore. Maybe it’s the absence of dealflow that has Wasserstein thinking so broadly, but in Lazard’s second-quarter earnings conference call, the chairman’s message seemed to suggest that he wasn’t so concerned about the firm’s place on the league tables.
“Strategic advice, first of all, has become broader than actually doing the deal,” Wasserstein prefaced the call.
He also took it upon himself to redefine restructuring, noting, “The old definition was reorganizations or bankruptcies… the business [today] is basically people who are thinking about their credit structures, negotiating it and understanding that over the next couple of years they may be distressed.”
A cynic might argue that the red pen Wasserstein is wielding on the dictionary allows him to rationalize away a thinner backlog. A landscaper’s bill, for instance, might list mow, mulch, aeration, trimming, et cetera, but when you watch them, they’re just mowing the lawn.
Still, I think Wasserstein raises a point that is important in this market. M&A, these days, is about much more than just the transaction.
I was talking with a GP recently about sourcing deals. His suggestion was pick over the offerings of the two- or three-man boutiques – the firms, he said, that effectively have to close deals to keep their doors open. “Those are the guys who will eat their clients to survive.”
In this market, M&A advisory -- to go back to Wasserstein’s point -- is rarely about M&A. It can be about mounting defense against a hostile bidder; it can be handling the debt fallout of past deals; or it can even be the decision not to pursue a sale or chase after a merger.
Most advice today can’t exactly be crowned with a Lucite, but it's hard to say that M&A markets are dead. It's just not as "deal" oriented as it used to be.
0 Comments
Be the first to comment on this post using the section below.
Add Your Comments...
Already Registered?
If you have already registered to Money Management Executive, please use the form below to login. When completed you will immeditely be directed to post a comment.
Not Registered?
You must be registered to post a comment. Click here to register.