Competition From Private Equity

Competition from Private Equity Even as in-house M&A pros scan the horizon for deals, they also must grapple with a playing field that is now crowded with financial buyers. But while the influx of private equity capital has added more complexity to the role of a corporate M&A professional, the change is not necessarily life altering. On the one hand, the increased presence of private equity shops means there is more competition for assets. And with their large pools of capital that must be put to work, some in-house dealmakers say that the private equity shops tend to overpay. It’s ironic, considering the same used to be said about strategic acquirers in years past. But the other side of the equation is that the companies that private equity buyers are acquiring are quickly recycled back into the market in a matter of years, making PE shops a valued source of deal flow. And Winebow’s Scott Ades describes private equity owners as reasonable people who don’t have emotional attachments to their holdings. They may hold out for high valuations, but they tend to be good sellers, he adds. (c) 2007 Mergers and Acquisitions Journal and SourceMedia, Inc. All Rights Reserved. http://www.majournal.com http://www.sourcemedia.com