Strategics Gain Confidence
Dealmakers who went into summer optimistic say the wind being knocked out of equity markets’ sails isn’t keeping corporate development teams from looking to M&A to build scale.
July 22, 2010
The deal was temporarily gone, but certainly not forgotten. Terse handwringing over the European sovereign debt saga combined with a pullback in domestic equities served to choke the pipeline of new transactions, dealmakers attending the Argyle Executive Forum 2010 agreed Thursday morning. However, the consensus from those speaking on the 'Corporate Development Leadership' panel is that before the year closes out, the M&A market will return.
Brian Cook, vice president of Honeywell International’s corporate development team, said he is aware of “a desire for folks to jump into the M&A market."
Scott Barnette, meanwhile, who holds the same title with Hitachi, said chief executives were only temporarily distracted from promoting growth plans to boards over retrenching. He added that the industrials space, in particular, has regained its footing on the M&A front.
Experts agreed that deals they began discussing as far back as 2007 remain tabled, for the most part, over the past few years. Today, though many of these opportunities are being re-evalutated.
This is largely due to increased confidence that comes from improving earnings reports.
“What we are hearing from our clients is a much higher level of optimism,” cites Chris Ruggeri, the lone advisor on the panel, from Deloitte’s Financial Advisory Services team. “Our guys are pretty busy right now.”
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