Deal making in 2007: Is the M&A boom over?

December 27 - The McKinsey Quarterly - Article at a glance:

• A wrap-up of 2007 M&A activity finds that the volume of mergers and acquisitions reached new heights during the year but then fell precipitously after the subprime-lending crisis made credit tighter. Nonetheless, suggestions that the M&A boom has met its demise may be premature.
• Most of the decline in M&A since August was concentrated in private-equity deals; corporate acquisitions continued apace. In a market characterized by tighter credit and a heightened appreciation of risk, this M&A boom will continue only if the more fundamental forces behind it, such as the surging activity of acquirers in emerging markets and increasing cross-border activity, continue as well.
• Furthermore, deal makers largely continued to exert greater discipline in M&A, as evidenced by metrics for the value that deals created and by the smaller number of acquirers overpaying for acquisitions. Read More (subscription required)

Semiconductors: Healthy M&A Prospects

S&P says some recent deals show that chip companies are finding attractive prices and ways to improve by combining

December 26 - Business Week - S&P Equity Research continues to have a positive fundamental outlook on the technology sector and recommends overweighting it, despite recent volatility and negative price performance. Scott Kessler, Standard & Poor's group head for technology coverage, thinks the stocks have been reflecting the potential for a U.S. recession. However, he also believes the sector should continue to benefit from longer-term trends, such as strong international demand, notable new products and upgrade cycles, and a likely growing corporate focus on productivity in light of economic uncertainties.

Further, Kessler believes that tech sector merger-and-acquisition activity among strategic partners will continue, despite the credit crunch, reflecting healthy fundamentals and prospects, strong corporate balance sheets, and ample opportunities to generate related shareholder value. Read More.

M&A will remain high in '08 and shouldn't be feared since Canada can keep up

December 19 - The Canadian Press - CEO Peter Marrone, who transformed his Yamana Gold into the world's fifth-largest gold miner through two major deals this year, says investors should stop fretting about the "hollowing out" of corporate Canada and embrace consolidation secure in the knowledge that the country's young industries have the muscle to keep growing.

While it's true that many well-known Canadian brands were swept up by big multinationals in a record-breaking year of billion-dollar mergers in sectors from mining to oil and gas to entertainment and retail, that doesn't mean the country is being sucked dry, Marrone says.

"People have talked about the hollowing out of Canadian industry going back probably the better part of the 25 years that I've been in the financial world," he says. Read More.

Mergers soar to record despite credit crisis

December 20 - Telegraph.co.uk - The value of mergers and acquisitions announced globally has hit a new record, despite the US sub-prime mortgage crisis and the meltdown of the credit markets in the latter part of the year.

Companies have announced takeover bids worth nearly $4,400bn (£2,200bn) in 2007, up more than a fifth on last year's total, according to preliminary figures from Thomson, the data provider. After a record-breaking first half, the value of M&A has slumped 26pc since July as private equity firms and other companies have found difficulty raising funds. Investment bankers in the US suffered a particularly slow second half, with M&A involving US companies slumping 46pc. European activity fell 17pc. Read More.

Analysts see decline in mergers and buyouts in 2008

December 18 - Bloomberg News - Even Goldman Sachs Group, the world's leading takeover adviser since 2001, is preparing for a decline in income from mergers and acquisitions next year, when analysts predict a slowing economy will reduce the market for leveraged buyouts.

The value of transactions may fall 20 percent from a record $3.9 trillion this year, executives at JPMorgan Chase, Lehman Brothers and Bank of America estimate. According to analysts surveyed by Bloomberg, that may reduce fees on Wall Street and contribute to Goldman's first drop in profit since 2002, the last year of a decline in mergers and acquisitions.

Leveraged buyout firms, responsible for 5 of the 10 biggest purchases this year, now face financing costs that have more than doubled since June to the highest level in four years. The pace of takeovers fell 33 percent since the end of the second quarter as companies including Virgin Media and Cadbury Schweppes delayed asset sales amid signs that economic growth was ebbing in countries including the United States and Britain. Read More.

Colorado dealmakers less bullish on M&A market

December 18 - Denver Business Journal - Colorado dealmakers are less bullish about the current mergers-and-acquisitions market than they were six months ago, according to the latest Association for Corporate Growth/Thomson DealMakers Survey, released Tuesday.

The percent of Colorado professionals involved in mergers and acquisitions who say the current M&A environment is good or excellent has dropped to 77 percent from 94 percent in June.

Colorado dealmakers anticipate more buyouts in the next six months (57 percent), and more distressed deals (86 percent). But 71 percent said they were not planning to modify their investment strategy. Read More.

M&A seen slowing in U.S. next year

After two record-breaking years, U.S. merger and acquisition activity will likely subside in 2008 as the credit crunch sidelines private-equity firms and an economic slowdown quells other deals.

December 17 - MarketWatch - Still, companies that were out-bid by buyout firms in recent years could make more acquisitions next year, helping to keep activity at healthy, if not record-breaking, levels, experts said.

A record $1.5 trillion of transactions were announced in the U.S. this year, through the end of November, according to Dealogic. That's up from about $1.4 trillion during the same period in 2006, which was the highest ever at that time, the firm noted. Read More.

Private equity ain't dead yet

December 17 - Blogging Buyouts - For months, everyone has been talking about the decline of private equity. And while it seems likely that future market historians will refer to a private equity bubble in the mid-2000s, experts are saying that private equity isn't going anywhere, even if it won't reach the lofty heights it reached a few months back for awhile.

Ernst & Young released a report saying that private equity deal flow will remain strong in 2008 -- above its 2004 and 2005 levels, right before the industry really took off. Read More.

Private equity: Maybe down, but not out

A report predicts that private equity deal flow will continue to be healthy in 2008, even if returns are lower.

December 14 - Fortune - Despite turmoil in the credit markets, a string of broken deals, and a dramatic slowdown in M&A this quarter, the private equity deal machine is still humming, says a report released Friday.

According to Ernst & Young, buyout fund deal flow should remain strong in 2008 - even above 2004 and 2005 levels - because private equity firms still have a lot of unspent capital that they have to put to work. There are 150 private equity-sponsored funds with more than $1 billion, compared with only 14 in 1995, and managers at private equity firms tell Fortune fundraising remains strong. Read More.

Tech cos. seen going M&A route, not IPO, in 2008

December 16 - Reuters - Investors fearful of a recession and corporations bullish on acquisitions are likely to push more venture capital-backed technology companies into selling themselves rather than going public next year.

U.S. initial public offerings of technology companies have been on the upswing since 2004, although nowhere near the peak of the dot-com boom. But many bankers and analysts said tech IPOs are slowing down again because markets remain unpredictable in the wake of the subprime meltdown.

"The tech IPO may still be the hottest IPO of all sectors, but the overall activity in 2008 will depend on the end market" of stock buyers, said Glen Kacher, managing director of Integral Capital Management. Read More.

U.S. Credit Markets to Create Some Favorable Valuation Opportunities for Buyers in 2008 U.S. M&A Fueled by Corporate and Cross-Border Activity

December 12 - PRNewswire - M&A activity in 2008 will be dominated by corporate and foreign buyers and the middle market will continue to be active, according to the Transaction Services group of PricewaterhouseCoopers. "The era of public-to-private transactions is on hold for now. However, the downturn in mega-deals by private equity will be offset by an increase in international buyers coming into the U.S. to take advantage of a continued weaker dollar. We also believe that more traditional private equity transactions will build momentum as 2008 progresses. We expect financial markets to quickly respond to put liquidity back into more balanced leverage lending," said Bob Filek, a partner in PricewaterhouseCoopers' Transaction Services group. Read More.

Fed Helps Banks Deal With Credit Squeeze

December 12 - AP - Banks squeezed by a global credit crisis have a new way to get their hands on cash so they can keep making loans to individuals and businesses. The Federal Reserve, under pressure to take more aggressive action, unveiled a plan Wednesday designed to bring banks and their borrowers relief.

Some questions and answers about what the Fed is doing:

Q: Why is the Fed taking this action?

A: The credit crisis has unhinged Wall Street and threatens to hurt the U.S. economy, which is fighting to avoid a recession. Read More.

Global deals to drive record M&A activity from Asia

December 11 - Reuters - Asian companies and government funds are set to keep up their global buying spree in 2008, powered by a sagging dollar, cheap targets in the financial sector and strong balance sheets.

India and China's hunger for foreign assets and a frenzy of activity in the booming commodities sector triggered record merger and acquisition volumes in Asia outside Japan in 2007, with outbound acquisitions on track to triple last year's total.

That momentum is poised to continue as Asian buyers using swelling foreign exchange reserves look for natural resources, brands, distribution and know-how. Banks and government funds, meanwhile, are stepping in to bail out Western financial institutions reeling from the subprime mortgage crisis. Read More.

Fuel retail market consolidation: some European players emerge stronger

December 7 - Energy Business Review - A number of firms seem to have benefited from consolidation within the European fuel retail market.

Over the last few years, the European fuel retail market has experienced significant changes as a result of falling margins and consolidation, as well as a number of large players choosing to exit certain markets altogether. However, there are signs that this realignment has benefited some smaller companies such as Maxol and PKN Orlen, which are now emerging as dominant players.

Over the last five years, fierce competition and squeezed margins have led to significant changes in the structure of western Europe's forecourt retailing market. These changes include increasing M&A activity, a number of large oil companies exiting selected markets and a decrease in the overall number of service stations.

Days of Big Buyouts

December 10 - WSJ - Remember when Blackstone Group and Kohlberg Kravis Roberts & Co. seemed to be competing for the title of World's Largest Buyout? Or when talk of a $50 billion or even $100 billion buyout was bandied about?

No one is pondering that now. The question now on everyone's mind is when will the buyout market rebound. Based on November private-equity-deal volume in the U.S., the answer: not for a while. Read More.

Mergers/acquisitions in global transportation market exceeding ’06 levels, report says

December 7 - Progressive Railroading - There have been a number of mergers and acquisitions among transportation and logistics firms so far this year. So much so, M&A volume worldwide is on pace to exceed 2006 levels, according to PricewaterhouseCoopers' most recent quarterly report on M&A activity in the global transportation and logistics industry.

During 2007’s first three quarters, the value of M&A deals totaled $39 billion, far exceeding the deals totaling $27 billion consummated in the same 2006 period. Declining debt market liquidity and “stock market volatility felt by financial investors” helped spur dealmaking, PricewaterhouseCooper said. Read More.

Asia's private equity investors opt for China and India: survey

December 10 - M&C.com - Private equity investors in Asia regard China as the market of choice followed by India, a KPMG survey said on Monday.

Sixty-one per cent of the respondents to this year's survey of 119 private equity firms said they have assets in China while 37 per cent have assets in India.

Third were Australia and Singapore, with 29 per cent, Taiwan with 28 per cent and Japan with 21 per cent. Read More.

Tech executives see 2008 M&A keeping current pace

December 6 - Reuters - Executives from technology companies including Microsoft Corp and Cisco Systems Inc said on Thursday they will continue to be active deal makers in 2008, snapping up innovative start- ups around the globe.

The success of recent deals and a market bursting with start-up companies has convinced these top corporations to continue shopping for deals, these executives said, speaking at the AlwaysOn Venture Summit West conference here.

"The key to will you do more deals in the future is, have the deals we've done in the past been successful?" said Bruce Jaffe, corporate vice president for corporate development at Microsoft. Read More.

Tracking the cycle - a topsy turvy year in M&A

December 6 - FT.com - Working for an M&A research publisher with clients across three continents has certainly presented its challenges over the past 12 months, writes Ed Lucas, Editor with Remark, the research and events division of The Mergermarket Group.

It has also provided a vantage point on the unfolding world of M&A in what has been something of a watershed year. What follows is a selection of some of those landmarks that have stood out among the sea of headlines, email alerts and wider market sentiment. Read More.

India M&A push undeterred by credit woes

December 6 - Reuters - Armed with strong balance sheets, willing local lenders and unrelenting ambition, Indian companies are well positioned to navigate the credit crunch and maintain their global buying spree, but must be flexible on financing.

Turmoil in credit markets could even serve to open up opportunities for cash-rich Indian corporates looking globally to buy access to materials, technology, and distribution.

"Appetite continues to be there and continues to grow," Chanda Kochhar, joint managing director of ICICI Bank, India's No. 2 lender, told the Reuters India Investment Summit. "The Indian corporate sector has a healthy balance sheet strength to be able to execute some of these large transactions." Read More.

FASB issues new M&A accounting standard

December 4 - Reuters - The Financial Accounting Standards Board, which sets U.S. accounting rules, issued new rules for accounting for business combinations on Tuesday.

The rules, known as FAS 141 and FAS 160, are intended to simplify and converge with international rules on how companies account for mergers, acquisitions, noncontrolling interests and other business combinations in financial statements.

The rules take effect for fiscal years beginning after Dec. 15, 2008, FASB said.

It is the first major joint project that the FASB conducted with its international counterparts at the International Accounting Standards Board. Read More.

M&A deals still overlooking IT integration challenge – study

Research finds no integration within three months of deal completion

The IT integration challenge posed when organisations merge is still being overlooked in many instances of merger or acquisitions, according to research among the membership of the National Computing Centre.

The research found that half of respondents who had worked in the context of a newly merged organisation reported there had been no integration within three months, when the deadline for the merged entity to disclose consolidated financial information comes into effect. Read More.

Transportation & Logistics 2007 Deal Volume is Likely to Surpass 2006 Levels, According to PricewaterhouseCoopers

Deal Value Running High, But Unlikely to Reach 2006 Levels

December 3 - Prime Newswire - Total transportation and logistics deal volume for 2007 is on pace to exceed 2006 levels, according to Intersections, PricewaterhouseCoopers' quarterly report on M&A in the global transportation and logistics industry, released today. This may be due in part to the effects of the decline in debt market liquidity and stock market volatility felt by financial investors.

Total deal value during the first three quarters of 2007 exceeded the total deal value announced during the comparable period in 2006 ($39 billion versus $27 billion, respectively), though it is not on pace to exceed the total deal value announced for all of 2006. Read More.

Credit crunch to hit 'big ticket' mergers

December 2 - Scotsman.com - Big private equity deals such as the recent £11.1bn buy-out of Alliance Boots, the pharmaceutical giant, are set to dry up next year, according to the latest research from Deloitte.

After a record start to 2007, the value of private equity transactions has taken a tumble as the turmoil in the credit markets has led to banks becoming less willing to lend.

With the effects of the credit crunch expected to continue well into the New Year, the number of "big ticket" private equity deals such as Terra Firma's recent £2.4bn takeover of record label EMI will be few and far between, the accountancy firm says. Read More.

November M&A slumps in United States - Dealogic

November 29 - Reuters - The value of announced U.S. mergers and acquisitions fell 71 percent in November to $58.1 billion when compared to the same month last year, according to research firm Dealogic.

In November of 2006, M&A had reached $200 billion.

As lending markets remained tight and investment banks absorbed the fallout from mortgage losses, the M&A slowdown in the United States that started in August showed few signs of reversing course this month. Read More.

Financial sector M&A

November 29 - Financial Times - Even Dick Cheney could not have missed. E-Trade looked like a sitting duck for a takeover by one its rivals TD Ameritrade and Charles Schwab. E-Trade’s shares have fallen almost 80 per cent since June and the online broker needed fresh capital. Meanwhile, consolidation has long made sense in that sector, given the huge cost savings on offer.

So why did neither pull the trigger, allowing hedge fund Citadel to swoop in and take a dominant stake instead? And why have other financial companies not rushed in to take advantage of their rivals’ distress through acquisitions? Read More.

Dealwatch: Cleantech

November 28 - Dealscape Blog (The Deal) - Cleantech venture investing has hit a record high in 2007, according to data out Nov. 28 from Thomson Financial and the National Venture Capital Association, as U.S. venture firms poured $2.6 billion into 168 cleantech deals in the first nine months of the year. The year-to-date total is already 46% more by dollar volume than all of 2006 and the highest dollar volume ever, the report said.

While the three largest cleantech deals by U.S. firms in the first three quarters of 2007 were in overseas companies, California, Massachusetts and Texas unsurprisingly roped in the most dollars and deals stateside, while solar energy saw the most activity by subsector. The largest funding for a U.S. company, the report said, came in two rounds totaling $115 million for GreatPoint Energy Inc. of Cambridge, Mass., which converts coals, petroleum coke and biomass into clean natural gas, from Citigroup Inc.'s Sustainable Development Investments unit, AES Corp., Suncor Energy Inc., Kleiner Perkins Caufield & Byers, Draper Fisher Jurvetson, Dow Chemical Co., Advanced Technology Ventures, Khosla Ventures and others. The most active U.S. investors this year have been Khosla, DFJ and Kleiner Perkins, the report said. Read More.

Climate change inspires thoughts of M&A

November 28 - Financial News (U.S.) - Climate-change concerns may set off a wave of mergers as a survey found that 20% of companies have considered buying a business to cope with the greater focus on alternative energy.

UK law firm Clifford Chance surveyed over 100 top executives at mostly multinational companies based in the US, UK, Europe and Asia about climate change issues.

The survey found that 44% of the Asian companies had considered buying another business, in areas like wind farms. About 19% of companies in the US and UK had made similar plans, along with about 13% of the companies in mainland Europe. Read More.

Investors switch from megadeals to mid-market

November 27 - Financial News - Investors in private equity funds are recruiting specialists to target mid-market dealmakers. Sentiment is swinging away from mega-buyout firms on fears the golden era of cheap debt and rising company profits is over.

Bregal Investments, a company that acts as a Swiss family office for the Dutch Brenninkmeijer family, billionaire owners of European clothing retailer C&A Group, has hired Alex Murray from boutique advisory firm Hawkpoint to help it co-invest in the mid-market. The boutique helped arrange Kohlberg Kravis Roberts’ $3.8bn (€2.6bn) takeover of Laureate Education.

The hiring of Murray comes after US-based investment office Private Advisors hired Jens Bisgaard-Frantzen from the mid-market private equity investment team at ATP, Denmark’s largest pension fund. Read More.

Providing a clearer path forward for private equity

The industry needs greater regulation and disclosure, but new rules should not scare it away from Britain

I was former chairman of Morgan Stanley International, I was the former regulator, the precursor of the FSA in the City, and a number of other roles. I was asked by the Venture Capital Association, which is the industry association for private equity in the UK, and by a group of major buyout firms to undertake an independent review into the degree of openness of private equity, which had come in for a lot of criticism. The scrutiny of private equity at the big buyout end had intensified greatly when they were pitching to buy Sainsbury’s, which in the event was a transaction that did not happen, and also to buy Alliance Boots. There was seen to be a lot of movement in their acquisition of listed companies that were being taken private and an acute sense that private equity is very secretive and the public just didn’t know enough about what was going on. That sense of uncertainty and ignorance led to a lot of suspicion. I have to say I think a lot of that was wholly justified, so there was disquiet that had to be addressed. Read More.

If Buyout Firms Are So Smart, Why Are They So Wrong?

ENOUGH already.

Private equity firms have recently been reneging on their billion-dollar buyouts as if the deals came with a 30-day money-back guarantee. They don’t. But that hasn’t stopped the biggest firms from trying to bully — yes, let’s finally call it what it is — their way out of deals.

For the last few months, private equity firms have repeatedly broken their word when breaking a deal, trying to place blame on big, bad investment banks that they said were holding them hostage by threatening to withdraw financing.

It was an easy narrative to follow, but it obscured the truth: Private equity firms, widely hailed as the “smart money,” made some lousy deals in the second half of this year, and some are now having a bad case of buyer’s remorse. They have been more than happy to break the deals and let the banks be the fall guys. Read More.

US dominates UK cross border M&A, as global levels show surprising resilience to credit crunch

November 14 - Business Credit Management (U.K.) - Despite the United States sub-prime loan crisis, US firms continues to acquire more UK companies than any other nation as UK M&A activity defied expectations with a robust third quarter, according to new research from Grant Thornton Corporate Finance.

In Q3 2007, both foreign acquisitions in the UK and UK acquisitions abroad were of greater value than during the same period last year, with UK companies reporting their highest third quarter offshore M&A spend since 2000. Meanwhile domestic M&A also held firm, dropping just 4% in volume on the same period in 2007 despite fears of a significant downturn due to the present perceived illiquidity in the market.

David Brooks, Head of M&A at Grant Thornton Corporate Finance, said the US was still the central driver of UK cross border M&A, with £26.7 billion spent by UK companies on US businesses and an almost equal amount spent in the opposite direction during the first nine months of 2007. Read More.

Canada's M&A activity seen strong for rest of year

November 13 - Reuters - Mergers and acquisitions in Canada stayed buoyant in the third quarter, data showed on Tuesday, and should remain so for the rest of the year, driven by strategic buyers but also the resurgence of private equity groups.

Canadian companies announced transactions worth C$91 billion ($95 billion) in the third quarter, according to data compiled by Toronto niche investment bank Crosbie & Co. and the Financial Post newspaper.

That's the second-highest quarter on record in terms of value and was largely driven by the announcement of aluminum producer Alcan Inc's US$38.1 billion purchase by Anglo-Australian metals giant Rio Tinto. Read More.

Podcast: M&A Outlook 2008, Three Hot Sectors

November 8 - PodTech - M&A deals in energy, real estate, and health care are some examples of sectors that still show lots opportunity, with some caution. Jason Lopez spoke with experts in each of these sectors at The Deal's "M&A Outlook 2008." In this podcast you'll hear about the nuances of the markets and expectations for next year from two energy pros, Jamie Welch, head of Global Energy for Credit Suisse and Richard Vaccari, VP of mergers and acquisitions at Sempra Energy. Listen to podcast.

More start-ups choosing mergers over IPOs

November 10 - San Jose Mercury - Tell us, Mike McCue. Why did you sell Tellme to Microsoft instead of opting for a dramatic Wall Street debut? Don't you listen to the venture capitalists? Don't you know that Silicon Valley dares to dream big?

But dreaming big, McCue says, is precisely why Mountain View-based Tellme became a Microsoft subsidiary in May for an undisclosed price some reports put at $800 million to $1 billion. Passing up an initial public offering, or IPO, to join Microsoft amid the "smartphone" revolution, he says, is a pivotal step toward fulfilling the grand vision that inspired Tellme in 1999: to make getting information from the Internet as easy as speaking into a phone.

"Life is too short to do something small," says McCue, who at 40 is part of a generation of entrepreneurs who started out as the Internet age was dawning. In the Microsoft deal, "we saw the intersection to create something absolutely huge - serving not just millions of people, but billions." Read More.

M&A Outlook 2008: The credit crunch's impact on the middle market

November 7 - Dealspace Blog (The Deal) - A panel at The Deal's M&A Outlook 2008 conference at the Ritz-Carlton, Battery Park in New York City Wednesday moderated by The Deal senior editor Vyvyan Tenorio weighed in on the impact of the credit crunch on the middle market, what it's done to growth and cyclical deals, and the resilience and volume of the middle market.

The panelists Steven Dresner, president of Dresner Partners; Michael J. Lyons, senior managing director at Lincolnshire Management Inc.; Robin Marshall, a partner at 3i Group plc; and Adam D. Sokoloff, managing director and head of financial sponsors and private capital group for Jefferies & Co.; generally agreed that turmoil in the credit markets hasn't hit the middle market as hard as it has the larger private equity deals.

"In August when things started turning, there was a slight change as some of the lenders were ratcheting things down, but other than that we haven't seen major changes in the debt markets [for middle market deals]. The middle market remains very fluid, and our firm is still very busy," said Lincolnshire's Lyons. "The middle market never got to the very high multiples seen in the larger buyout market, where multiples reaches 8 times or 9 times Ebitda. The middle market never really got past 7 times Ebitda." Read More.

M&A Outlook 2008: Cross-border bonanza

November 7 - Dealscape Blog (The Deal) - Mohr offered some color on trends. This year, she said, really represents the high-water mark of where M&A is globally. Overseas is where the growth lies. In 2007 to date, she said 45% of global M&A has been cross-border. It should be somewhere in the high 40% range by the end of the year. While Europe and U.S. have historically driven this, growth in the rest of the world has almost doubled over recent years. In the second quarter of 2007, there was $800 billion in global M&A volume. In the third quarter, it dropped to $400 million. The fallout largely came from the U.S. and Europe, she said, while volume from the rest of the world was essentially flat. The role of emerging markets and their companion sovereign wealth funds are driving a lot of this. Sectors where activity is hot include: financial services, energy and power, and industrials.

For buyers looking to the U.S., the current climate may make M&A prospects more attractive. Because of the credit crunch and the depressed U.S. dollar, cross-border strategics may see this as a good time to invest in the U.S., Hartman said. Read More.

M&A Outlook 2008: Energy sector

M&A Outlook 2008: Energy sector

With winter just around the corner and oil surging toward $100 a barrel, the energy sector has been on the minds of consumers as wells as dealmakers lately. A panel of dealmakers gathered Wednesday at The Deal's M&A Outlook 2008 conference at the Ritz-Carlton Hotel Battery Park in New York City to discuss the M&A opportunities in the sector. The general sentiment of the three panelists, Richard A. Vaccari, vice president, mergers and acquisitions at Sempra Energy; Douglas Korn, senior managing director and executive VP at Bear Stearns Merchant Banking; and Jamie Welch, head of global energy, investment banking division, at Credit Suisse Securities (USA) LLC, is that the outlook for energy deals will remain bullish.

Mohr offered some color on trends. This year, she said, really represents the high-water mark of where M&A is globally. Overseas is where the growth lies. In 2007 to date, she said 45% of global M&A has been cross-border. It should be somewhere in the high 40% range by the end of the year. While Europe and U.S. have historically driven this, growth in the rest of the world has almost doubled over recent years. In the second quarter of 2007, there was $800 billion in global M&A volume. In the third quarter, it dropped to $400 million. The fallout largely came from the U.S. and Europe, she said, while volume from the rest of the world was essentially flat. The role of emerging markets and their companion sovereign wealth funds are driving a lot of this. Sectors where activity is hot include: financial services, energy and power, and industrials. Read More.

Financial firms seen boosting M&A

November 7 - Reuters - While the market for mergers and acquisitions has slowed in recent months due to a credit crunch, financial services firms are expected to seek more opportunistic acquisitions, senior executives predicted at this week's Reuters Finance Summit.

Among the likely moves will be well-capitalized Asian banks looking to buy stakes in U.S. and European financial services markets through acquisitions, executives said.

And European institutions may extend their reach into the U.S. market after assets get cheaper from a falling dollar, they said. Read More.

Private equity poised for a comeback

November 6 - Washington Technology - The recent subprime credit woes brought an end to the third era of private equity, but the fourth era should begin in early 2008, according to David Rubenstein of the Carlyle Group.

Rubenstein is one of the founders of the private equity group, which has focused heavily on deals in the government market.

In a speech liberally sprinkled with self-deprecating humor, Rubenstein explained that private equity deals will return. “They will come back because investors know the returns are better than they can find anywhere else,” he said. Rubenstein was the keynote speaker at the annual Northern Virginia Technology Council annual banquet Nov. 5. Read More.

M&A Outlook 2008: Energy & Healthcare

M&A Outlook 2008: Energy spotlight

Energy has long been one of the largest concerns of the global economy, and with oil prices soaring, unrest in the Middle East and the rise of China, the importance of M&A among energy companies is likely to increase in importance in 2008. Read More.

M&A Outlook 2008: Healthcare spotlight

During the first three quarters of 2007, a total of 722 deals were announced in the healthcare industry worth a combined total of $173 billion, according to investment researcher Irving Levin Associates Inc. The firm notes it now seems unlikely that this year's dollar amount will surpass the record-breaking $267.1 billion reached in 2006. Read More.

India the New Hot Spot for Global Private Equity

November 3 - The India Street - Thanks to increasing consumer market and economic boom in India, the action in private equity space is increasing with every passing day. Therefore, I was not at all surprised when one of my colleagues said to me that private equity funds are queuing up to enter India (By the way, another source for private equity news that we subscribe to is the VC Circle).

Point to be noted here is that Blackstone India and Apax Partners, which started investing in India this year, already have full-fledged offices here. Same is the case with Baird Private Equity and Lehman Brothers. What’s more, Deloitte Touche Tohmatsu India has also set up a dedicated private equity practice called Deloitte Corporate Finance Services India. Read More.

Is Tech Ready to Go Deal-Crazy?

October 31 - Motley Fool - Over the past couple of months, tech companies such as SAP, McAfee, Microsoft, and Oracle have made some interesting headline M&A deals. Is this the start of a major trend? It may be. This is according to a tech research firm, The 451 Group.

First, let's get some background. The 451 Group reports that private equity tech deals surged 138% this year to $183.7 billion. Strategic deal making, on the other hand, plunged 31% to $212.4 billion. A strategic deal is when a company buys another firm in the same industry. Read More.

M&A Outlook: Where the credit crunch and middle market collide

October 29 - Dealscape Blog (The Deal) - "The times, they are a-changin', and for many middle-market dealmeisters, they are a bit confounding, too."

So began an Oct. 1 story by The Deal's Vyvyan Tenorio examining the impact of this summer's credit crunch on the middle market. While the credit freeze threw megabuyouts into the spotlight even more, the impact on the middle market — where there are many more deals and dealmakers, as well as less liquidity and tougher terms of late — has received less airtime. Read More.

Aim market: oil and gas potential M&A targets

October 29 - Telegraph (U.K.) - The oil and gas sector is set for a major M&A boom with every stock in the sector a possible bid target, according to new research from the corporate finance team at Ernst & Young.

The Alternative Investment Market (Aim) has been relatively quiet in terms of deal flow since the credit crisis hit markets over the summer. But that trend could well be reversed as the 90-plus companies in the oil exploration and production sector seem likely to go through a phase of significant consolidation.

Many of the oil prospectors on Aim are running out of cash, says Ernst & Young, and they will either have to take over rivals or be bought out themselves if they are to have a future.

Alec Carstairs, oil and gas partner at Ernst & Young, says: "A combination of weak share performance and low cash balances means that difficult times are ahead for the oil and gas juniors. Read More.

This Just In: Mergers Do Indeed Lower Costs

October 26 - The Motley Fool - As the anniversary integration between Thermo Electron and Fisher Scientific approaches next week, Thermo Fisher Scientific announced third-quarter results that demonstrated how the integration is having a nice effect on the bottom line.

While revenue increased 7% on a pro forma basis as though the company was together in the third quarter of 2006, adjusted operating income rose 17%. The lowered costs of the combined company provided a 150-basis-point improvement of operating margins compared to the year-ago quarter. In addition to cutting costs by sharing overhead and personnel, the company is also dumping low-margin items it sells. That's creating a slight impediment to revenue growth but should improve overall margins down the line. Read More.

International middle-market deals keep pace

October 25 - Dealscape Blog (The Deal) - International middle-market dealflow was very active Thursday amidst the backdrop of megabillion dollar international acquisitions that included Standard Life plc's $17.8 billion bid for Resolution plc, Industrial and Commercial Bank of China Ltd.'s $5.5 billion stake in Standard Bank of South Africs Ltd., and Rexel SA's $4.3 billion cash offer for Hagemeyer NV.

Aside for the aforementioned acquisitions, billion-dollar deals have been few and far between lately. So, the rush of three billion-dollar deals in one day hearkens back to the heady dealmaking days prior to the credit crunch when financing was plentiful and executives weren't spooked by the word recession. Despite Thursday's uptick in billion-dollar deals, middle-market acquisitions — especially foreign ones — kept pace. In general, over the last two months, middle-market M&A has been more plentiful than the billion-dollar deal. Read More.

Dealwatch: Middle Market

October 24 - Dealscape Blog (The Deal) - As the price ceiling of the middle market has inched north, the landscape has taken on characteristics of the megabuyout playing field. Not immune to the credit crunch, the middle market has felt the heat since the summer with less liquidity and tougher terms. The Deal's Vyvyan Tenorio examined the issue in a Deal newsweekly story Oct. 1 how the landscape has changed and what it means for dealmakers. In the wake of the crunch, middle-market deals are dominating the acquisition landscape right now, Dealscape's Gerald Magpily pointed out: Eight of the top 10 domestic deals and nine of the top 10 international deals were in that realm.

But the problems are not lost on the dealmaking arena, which is typically defined by deals worth less than $750 million. Golub Capital LLC, a middle-market lender, retreated from plans to go public in mid-October, given the market for financial services-related offerings. Read More.

Life after the great credit crunch

The heady times for M&A specialists came to a crashing halt in August. With the big takeover show over, corporate lawyers are turning to new plays - many on paths out of the deal desert

October 24 - The Globe & Mail - When Steve Halperin surveyed his calendar in early August, he had every reason to believe the torrid season of deal making would continue.

He and his partners at Goodmans LLP had nailed an unprecedented number of big mergers and acquisition deals, including the record-breaking bid for BCE Inc. by the firm's client, Ontario Teachers' Pension Plan. Behind closed doors things were even busier as he juggled three secret takeover assignments. Read More.

Merger Fever Heating Back Up

What credit crunch? Oracle's bid for BEA underscores a banner year for technology M&A

October 23 - eWeek.com - Oracle's takeover bid for BEA Systems—successful or not—is just the latest example of what is shaping up as a historic stretch of mergers and acquisitions in the technology industry.

Despite a recent slowdown in the credit markets that left private equity firms on the sidelines during the third quarter, M&A analysts still expect 2007 to be a banner year.

"We're very positive on the market right now," said Ward Carter, president of M&A advisory firm Corum Group, of Bellevue, Wash. "There was a slight disruption [in the third quarter] because of the credit meltdown, but Q4 will catch up. There's a lot of pent up demand." Read More.

Energy Sector Roundup

October 22 - Forbes - Following is a summary of top stories in the energy sector Monday afternoon.

Oil Settles Lower as November Contracts Expire

Oil futures fell on concerns about the economy and profit-taking ahead of the November futures contract expiration.

Crude rebounded from earlier lows by the end of the day. Some analysts said prices firmed after an expected cease-fire between Turkey and Kurdish rebels in Iraq looked shakier than first thought. Read More.

Middle-size deals are expected to continue

October 23 - Star Tribune (Minn.) - A top executive of the former Goldsmith Agio Helms doesn't expect a major slowdown in the mergers-and-acquisitions business in the midsize deal market even though bankers are getting more conservative amid the severe credit crunch.

"We had nine deals close in the third quarter, and that's a healthy number," said Mike McFadden, co-chief executive of the M&A advisory firm now called Lazard Middle Market, after its new Wall Street owner. "The private equity firms, the financial buyers were very aggressive on pricing. We're seeing strategic buyers [industry peers] continue to be active, and they are winning more companies at competitive prices."

In short, the premiums are coming down in some cases as chastened bankers, gulping over big third-quarter writedowns on everything from vacant condominium projects to subprime mortgage investments, get more conservative in a tenuous economy. Read More.

Private equity vital to mid-market firms, says survey

October 19 - Gowth Business - Over half of buy-out companies say that their private equity backers add significant value to their business, according to a survey from law firm Eversheds. Just under two-thirds of respondents had achieved their business objectives, with half of these outperforming their plans.

At odds with recent criticism of private equity firms, headcounts in three-fifths of the buy-out companies had gone up, with 18 per cent losing staff and 22 per cent remaining unchanged.

Richard Moulton, corporate partner at Eversheds, comments: ‘In the mid-market sector we are not dealing with Gordon Gekkos. The vast majority of private equity houses provide a supportive partnership which enables management to achieve their goals.’ Read More.

Buyers to ‘benefit’ from M&A market

October 20 - Business in Wales (U.K.) - The mergers and acquisitions market in Wales remains buoyant – despite the crisis that hit the money markets last month, an analyst said yesterday.

A study by accountants and business advisers PKF in association with Deal Drivers UK showed a slowing outside Wales after a ramping up of deals in the last quarter.

The report highlighted a “frantic pace” of deals over the past few years with the last quarter of 2006 being the high point with a record £70.9bn in deal value. Read More.

DEALTALK - Cross-border mergers defy U.S. slump

October 18 - Reuters - Even as tight credit conditions curb the urge among U.S. dealmakers to go shopping, the international mergers and acquisitions market is setting records.

Multinational corporations have been expanding into emerging markets, while foreign companies are using stronger currencies to pursue acquisitions -- especially in the United States.

So far this year, cross-border deals have reached a record high of $1.47 trillion, up 82 percent from the same period in 2006, according to research firm Dealogic.

"The value of the dollar, and the credit situation, are going to have less impact on these types of deals," said Mike Rogers, a partner in Ernst & Young's transaction advisory services group in Dallas. Read More.

Buyouts are big business for Britain whether they are large or small

October 17 - Scotsman.com - THE UK's mergers and acquisitions market is the largest in Europe accounting for a fifth of deal volume and a quarter of deal value in the first half of 2007. Over the past few years M&A activity has risen steadily both in terms of deal value and volume from £15 billion at the start of 2004 to £62.9bn in the second quarter of 2007.

PKF has just produced a report, Deal Drivers UK, in association with the independent Mergers and Acquisitions intelligence service, Mergermarket, which reveals that UK private equity buyout quarterly values have also risen significantly in past years. Read More.

Metals Slump As Housing Market Worsens

October 17 - AP - Base metals declined Wednesday after the Commerce Department reported homebuilding slumped to its lowest level in 14 years, raising concerns that demand for copper and other raw materials could ebb.

In other commodity markets, agriculture futures ended mixed, while oil prices reached a peak and precious metals edged higher.

Although housing news has been grim for more than a year, September's 10.2 percent drop in construction of new homes surprised analysts who on average expected a more modest 4.2 percent decline. It was the slowest pace since March 1993. With the housing downturn showing little sign of a bottom, investors retreated from the industrial metals key to building infrastructure. Read More.

Emerging Market M&A Hits $663 Billion In '07,Beats '06 Record Dealogic

October 16 - CNN Money - Mergers and acquisitions in emerging market countries have reached $662.9 billion so far in 2007, topping the previous record high of $643.3 billion for all of 2006, according to data provider Dealogic.

In the third quarter of 2007, emerging market M&A bucked the global trend with an increase of 7% compared with the second quarter of 2007, and versus a 45% decline for developed countries, it said.

M&A in the emerging markets has been increasing in importance and has so far accounted for 17% of global activity this year, compared with only 11% in 2000, it said. Read More.

Software M&A expected to continue: Names to watch

October 15 - Financial Post (Canada) - Oracle Corp.’s offer last Friday to buy software developer BEA Systems Inc. for US$6.66-billion is yet another sign that the business application market remains highly competitive, as larger players continue to snap up high growth software companies.

Along with Oracle’s tentative deal and SAP’s purchase of Business Objects SA last week, RBC Capital Markets analyst Mike Abramsky said the chance of other mergers and acquisitions for other software companies happening now is high.

“You’re seeing acceleration of some dynamics in the market that are clearly going to increase the probability they will going to be acquired,” Mr. Abramsky said in a phone interview. “Those trends include the slowing in growth of some of the bigger players that have been dominating the market like SAP, Oracle and Microsoft, and the need to fuel that growth through acquisitions.” Read More.

Giants move in on smaller buyouts

rOctober 10 - Telegraph (U.K.) - When Jeff Montgomery's private equity house GMT Communications cast its eye over a small Latvian telecommunications firm recently, it found itself in unlikely company.

The deal was small – requiring around €150m of equity – but among the players was Blackstone, the US private equity giant which eventually won the auction.

Go back a few months and it would have been remarkable to see a major player chasing such a deal – Blackstone has become famous for pursuing buyouts in the many billions of dollars – but, in today's climate, it is the mid-caps that are attracting all the attention. Read More.

Mergers & Acquisitions Institute: The party isn't over for everyone

October 5 - Dealscape Blog (The Deal) - There's been an elephant in the room at the Mergers & Acquisitions Institute in Dallas, and that, of course, is the fact that big private equity deals have virtually vanished after the credit crunch brought on by the subprime mortgage implosion.

Panelists referred to it in their remarks on Thursday — the famed return of the corporate buyer now that private equity firms can't borrow cheaply, deal multiples coming down, the emergence of more stock deals — and there was a lot of chatter about it at the cocktail reception Thursday night. Read More.

Mid-sized companies step up cross border M&As: survey

The key drivers are need for geographic diversification, availability of good targets and access to financing, says the ACG/Grant Thornton/Eureka Private Equity survey

The increasing participation of middle-market dealmakers in global cross-border M&As is a new trend that is developing very quickly, says the findings of the ACG/Grant Thornton/Eureka Private Equity survey. This trend is fast catching up in USA, European and Asia, and is expected to further accelerate in the times to come, the survey says.

Cross-border M&A is now a vital part of strategic plans for middle-market companies and private equity firms, according to the survey. The key drivers in this respect are largely influenced by the need for geographic diversification, availability of good acquisition targets and access to financing, it says. Read More.

Real estate buyout funds still on a tear

October 4 - The Globe and Mail - The private equity party may be over but the news hasn't yet made it to the real estate buyout funds, which are seeking $105-billion (U.S.) in new capital, a sixfold increase from January, 2006.

There are 206 real estate-focused funds in the market raising capital around the world, an explosion of growth in what was once a niche sector of private equity, according to data from London-based Private Equity Intelligence.

Last year, 116 new funds raised a record of $72-billion, and 2007 is set to surpass that amount with a total of about $75- to $85-billion. That's seen further increasing to $80- to $100-billion next year, the research firm said. Read More.

Firms are braced for private equity slowdown

Private equity deal activity is now almost certain to slow as the credit crunch starts to bite

October 4 - Accountancy Age - The profession seems to have accepted that private equity deal activity, a major contributor to sustained double-digit growth at the large accounting firms over thelast three years, is now almost certain to slow as the credit crunch starts to bite.

An analysis of the top 100 private equity exits compiled by Ernst and Young showed that in 2006 the average enterprise value of a private equity business in Europe grew from $800m to $1.5bn at exit. Read More.

Time for a New Corporate Buying Spree?

As earnings take a nosedive, analysts expect to see more companies turn to M&A to pick up the slack. They certainly have the cash

The slowdown in U.S. corporate profits has been swift and stunning. While earnings for companies in the Standard & Poor's 500-stock index grew a robust 14.7% in 2006, profit growth has screeched to a halt amid the troubled financial climate of 2007. With the income-reporting season kicking off the week of Oct. 8, average earnings for the S&P 500 companies are on track to grow just 1.9% during the third quarter, the slowest pace in more than five years, according to senior S&P index analyst Howard Silverblatt. That's down from 7.9% for the first quarter and 9.6% in the second. Read More.

CEN Survey Shows Middle Market Companies Bullish on Economic Growth

Chief Executive Network Surveys Manufacturing, Distribution and Service Sector CEOs

October 2 - Business Wire - Chief Executive Network, the premier industry sector organization for CEOs and senior executives, recently surveyed over 350 companies covering a broad cross-section of the industrial and service sectors. The purpose of the survey was to determine how mid market (non Fortune 500) and smaller companies see their near term business prospects. Read More.

More companies say, 'Let's make a deal'

October 2 - USA Today - So much for the credit crunch killing the merger boom. Canada's TD Bank said Tuesday that it's buying New Jersey-based Commerce Bancorp for $8.5 billion. That came a day after cellphone maker Nokia said it is buying digital mapmaker Navteq for $8.1 billion.

Such deals show that while merger-and-acquisition dealmaking took a breather in August and September, as some buyers had trouble borrowing money, the M&A market is on the comeback. "Suddenly things are looking good," says Richard Peterson at Thomson Financial. "Deals are getting done." Read More.

Private Equity's Feeding Frenzy

A growing appetite for small businesses

Your company might be ready to consider a private equity investment sooner than you think. "There is already a frantic bidding frenzy for the $5 to $15 million deals," says Eric Siegel, a lecturer in entrepreneurial management at Wharton School and founder of advisory firm Siegel Management. "Now you're finding much more activity for the $2.5 million deals, too." That's likely to continue, as these deals don't usually rely on the recently roiled public debt markets. David Lobel, a partner with Sentinel Capital Partners, says his fund considered 56 small business prospects at a recent weekly meeting. "It's an enormous number of deals for us," he says. "A year ago we would have had 30." Read More.

Private Equity Shows Signs of Revival

A mini-flurry of developments indicates that buyouts are coming back and pending deals will go through.

October 1 - CFO.com - It looks like private equity is slowly coming back to life.

Sure, previously agreed-upon deals continue to fall apart. The latest occurred Monday when buyout firm Silver Lake Partners and hedge fund ValueAct Capital opted to terminate their merger agreement with Acxiom Corp. The announcement knocked down the shares of the data management company by more than 22 percent. Acxiom will receive a $65 million termination fee from the two investors.

However, late last week a number of developments suggested that prospects are improving for buyouts in general and the completion of pending deals. Read More.

End of Quarter Brings Steep M&A Slowdown

September 28 - The Associated Press - The tumult of credit market dislocations and volatile stock swings during the third quarter has claimed an all-too-expected casualty: the pace of global takeovers.

There was a marked slowdown in the third quarter with $992.1 billion worth of deals announced _ 43 percent less than during the second quarter, according to data tracker Dealogic. On a monthly basis, there was only $186.3 billion worth of deals announced so far in September _ compared to $231.1 billion in August and $574.7 billion in July.

The numbers aren't all that astonishing to many on Wall Street. The third quarter is typically one of the slowest periods during the year for mergers and acquisitions, but this time around was marred with volatility. Read More.

U.S. mid-market M&A takes glory as big deals slow

September 27 - Reuters - As U.S. leveraged buyouts and multibillion dollar mergers fell off in the third quarter amid a major credit crunch, mid-market deals of up to $1 billion held up remarkably well.

Data provider Dealogic said mid-market U.S. deals valued at between $100 million and $1 billion totaled almost $82 billion in the third quarter, down only slightly from $83 billion for the same period in 2006.

Even when compared with this year's record second quarter, mid-market deals were down only 15 percent.

That compares with a 57 percent fall in U.S. deals over $1 billion in the third quarter, which plummeted to $214.3 billion from $495.3 billion in the second quarter. Read More.

New world record for M&A, but private equity starts to pay

September 26 - Finance Week - M&A activity, in Europe and globally, is set to break last year’s record despite the prospect of a slower fourth quarter. Cash-rich corporates have stepped in as bidders to replace the credit-strained private equity forms – and investment banks enjoy continued fee growth whether the deals stand or fall.

Merger and acquisition deals reached a new record value of $1,800 bn in the first nine months of 2007, 12% up from last year’s record total, according to preliminary data assembled by Thomson Financial. Global deals are up even more strongly, by 37% year-on-year to over $3,500bn. Read More.

Innovative Deal Financing: The credit crunch and the middle market

September 25 - Dealscape Blog from The Deal - With the financing of megadeals hitting walls, the middle market is bracing for fallout, and with lenders tightening the screws, the effects are being felt by companies and sponsors alike.

The Deal's David Carey moderated a panel consisting of Brad Boerick, a partner at Pepper Hamilton LLP; Thompson Dean, managing partner and CFO at Avista Capital Partners; and Robert Willens, a managing director at Lehman Brothers Inc., that discussed the middle market and the credit crunch.

Dean commented that while the middle market didn't participate as much in the LBO debt bonanza, it has still pulled back. However, there are still plenty of middle-market sponsors and hedge funds that didn't get into the LBO rush, who are still doing deals but in a more conservative manner. Boerick agreed that most lenders are saying "they're open for business 'for the right kinds of deals.' " With leverage less available than it was, Boerick added that sellers are waiting on the sidelines to see how things go. Read More.

Read More about the Innovative Deal Financing Conference: Distressed debt

Smaller Oil Companies Fuel UK's North Sea Revival

September 25 - RigZone (WSJ) - Tax changes and investment incentives are transforming the landscape of Britain's North Sea -- reinvigorating Europe's second-largest oil basin after Norway and raising hopes that its long decline may slow.

The revival has taken many in the industry by surprise, because when the government in 2005 announced it would raise taxes on oil production, big international companies warned the move would discourage investments.

Two years later, the biggest oil companies are reducing their presence, but a clutch of smaller companies have moved in to fill the void. The shift in ownership suggests the government may be able to capture more revenue from high oil prices while limiting risks to its energy security needs. Read More.

Private equity image taking a bruising

September 24 - Reuters - The private equity industry has suffered a tough week on the public relations front.

First, there was a protest in New York that, while tiny, didn’t help the industry’s image any. Its theme: private equity’s tax treatment in general and that of Carlyle Group’s CEO David Rubenstein in particular. While private equity firms didn’t design the tax code, it hardly plays well in print that Rubenstein’s tax rate on a significant part of the firm’s profits is 15 percent, while many cops and teachers out there pay 35 percent.

Then there was the fallout from private equity buyers’ decision to back out of their deal to buy Harman Industries International, which has sent the company’s shares down around 30 percent since Friday morning. The withdrawal was an added blow on the PR front in that the deal was supposed to allow Harman shareholders to keep an equity stake in the company. How do fund managers feel about the buyers — KKR and Goldman Sachs — now? Read More.

Canadian M&A rockets 81%

September 24 - Financial News - Canadian mergers and acquisitions surpassed last year's record by 81% on mining and energy pacts, as this morning's activity hit more than $8bn (€5.67bn).

Abu Dhabi National Energy announced today it will buy Canada’s PrimeWest Energy Trust for $5bn, while Canada’s Yamana Gold ended a long-running drama over its three-way hostile deal for Meridian Gold by snapping up the rival gold miner for $3.56bn while folding in its previous acquisition of Northern Orion Resources, valued at just over $1bn. Read More.

Mid-market firms bullish on results as credit crunch bites…

September 24 - TheLawyer.com - The credit crunch has caused City managing partners to eye the markets nervously ahead of half-year figures next month, but mid-market firms have been given renewed confidence, research by The Lawyer can reveal.

With just six weeks to go until most UK-headquartered firms release their half-year results, there is cautious optimism that the credit crunch will not cause a severe dent in the figures, thanks to a standout first quarter. Read More.

M&A bankers deal with something new: idle time

September 20 - Reuters UK - Private equity consultant Jeff Temple and his friend at a major Wall Street investment bank had been used to working well into the evening -- which was why they were surprised to find they weren't too busy to meet for drinks at 5:30 p.m. recently.

Temple, a partner at ProAction Group, typically gets together with the investment banker every few months, and he can't remember the last time they met up before the sun had set.

Still, investment banking floors aren't exactly ghost towns.

Small to midmarket M&A activity is expected to keep up. Corporate buyers are hungry for deals. Large leveraged buyout firms such as Blackstone Group and Carlyle Group will have to spend their tens of billions somehow, probably in the form of smaller deals. Read More.

Blackstone’s James Sees Private Equity on the Rebound

September 21 - NY Times Blog - Blackstone Group President Hamilton James is sounding guardedly upbeat about the state of the private equity industry, which is in a semi-frozen state these days because of turmoil in the credit markets.

Speaking at the Dow Jones’ Private Equity Analyst conference in New York, Mr. James said the private equity market will likely bounce back in the coming months, albeit to the slower pace of deal-making activity it saw three or four years ago, as opposed to the breakneck pace of the last few years. Not long after he spoke, Cerberus Capital Management announced the $2.1 billion buyout of a paper company, a development that one private equity executive called “encouraging.”

“It will take a while to get back to full volume,” Mr. James said Thursday. Meanwhile, he added, “We’re putting out just as much money as before the meltdown began — and at higher [projected] returns.” Read More.

Evercore's Altman says private equity will return

September 20 - Reuters - Down but not out, private equity will return to drive deals after a period of hesitation, Evercore Partners Inc. Chairman Roger Altman said on Thursday.

"We're going to see plenty of private equity transactions once a degree of stability returns," Altman said at the Dow Jones Private Equity Conference here. "Private equity will return in a different way."

The next round of buyouts will be more cautious and at lower prices, as they will employ less leverage and take into account the potential for a recession, Altman added. Read More.

Private equities refocus on existing holdings, smaller deals

September 19 - MarketWatch - Private equity firms are attempting to adjust to life in a tighter credit market, refocusing their attention on companies they already own and pursuing deals that do not require as much leverage.

But while the large deals have ground to a halt for now, it remains unclear whether the slower pace of deal making will force private equity firms to raise more modestly sized funds in the future.

These were among the issues discussed during the opening panel of Dow Jones & Co.'s 14th annual Private Equity Analyst Conference, which opened here Wednesday. Read More.

Private equity exits

September 19 - FT.com - True to its name, the buy-out industry has spent the past few years doing more buying than selling. Private equity firms have amassed portfolios using cheap, plentiful debt. But these assets must be sold to produce profits. According to Dealogic, private equity firms have announced $675bn of acquisitions globally this year, but have pulled off less than $250bn in exits. The mega-funds that private equity groups have raised in recent years remain in investment, rather than exit, mode. To offset the ballooning funds’ purchases this year would require their exits from the past three years combined.

Buy-outs have slipped markedly since early summer. With lenders cracking down on aggressive loans, recapitalisations and secondary buy-outs (flipping assets from one private equity shop to another) look tougher. So funds are cautiously eyeing initial public offerings – and considering how to run better those companies they must hang on to. Read More (Subscription Required)

Dollar Near Record Low Versus Euro Before Bernanke's Testimony

September 20 - Bloomberg - The dollar traded near a record low against the euro on speculation Federal Reserve Chairman Ben S. Bernanke will signal a U.S. housing slump threatens to slow economic growth in congressional testimony today.

The U.S. dollar fell against 15 of the 16 most-active currencies as traders bet the central bank will cut its benchmark interest rate further after the first reduction since June 2003 on Sept. 18. The currency dropped to the lowest in nine years against the Indian rupee and a six-week low against the Australian dollar.

"We're going to see a continuation of U.S. dollar weakness,'' said Greg Gibbs, a strategist at ABN Amro Holding NV in Sydney. "Bernanke will talk about the housing market and how that could flow through to the rest of the economy. The possibility of more U.S. rate cuts is completely open.'' Read More.

High hopes for Global, MidMarket M&A

September 18 - Reuters - While large-cap private equity firms are licking their wounds, a brighter picture has emerged from another section of the M&A community: the midmarket.

Indeed, private equity executives and bankers–large and small–say the midmarket is where it’s at (link to Smaller buyout shops feel the love story)these days. So does Grant Thorton, which says in a recent survey that 75 percent of mid-market companies expect to engage in international M&A at least once in the next 12 months. Read More.

Debt market may tighten further in Canada, but opportunity remains

September 18 - Financial Post (Canada) - The market for highly-leveraged, mega-cap private equity deals involving names like First Data Corp. and TXU Corp. in the U.S., and Bell Canada Inc. in Canada, may be tightening up, but that does not appear to be the case in the mid-market just yet.

The space where companies with roughly $50 to $300-million in revenue operate is the focus of institutional fund manager Penfund, who is eager to capitalize on any such shift in debt markets. The firm does equity investing via buyouts and minority investments, as well as provides private high-yield debt.

“Right now, conditions are still pretty good,” said Adam Breslin, a partner at Penfund. “There hasn’t been a major bank tightening for the middle market so far.” Read More.

Dutch finance ministry publishes proposals aimed at sharpening M&A laws - UPDATE

September 14 - Forbes - The Dutch Finance Ministry has published proposals to sharpen regulations around company takeovers to provide greater transparency about the bonuses paid to company directors and the consequences for employees, while also implementing stricter time frames.

The legislation will also serve to implement the Dutch government's response to the EU Takeover Directive, obligating a company that takes a 30 pct stake or more of another company to make a mandatory offer for all of the company's outstanding shares at a fair price.

Greater supervisory powers will also be granted to the Dutch stock markets regulator AFM, which will in future be required to assess a company's offer documentation. Read More.

Private equity will emerge much-changed

September 16 - FT.com - Remember private equity? It was the future once – the model not just for amassing vast personal wealth but for running companies, period. At present, it is shrouded in the fog that covers most of the financial landscape. But when that clears, what place will private equity have in the scheme of things?

To answer the question, we must first deconstruct the model. How much of the industry’s returns in recent years came from running companies better, and how much from financial engineering or simple leverage?

Indeed, how much of the takings for private equity managers came from their share of the profits and how much from management fees?

The hard-line advocates of private equity will tell you that nearly all the returns came from better management. Read More.