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.
Friday, September 28, 2007
Thursday, September 27, 2007
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.
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.
Wednesday, September 26, 2007
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
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.
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.
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.
Tuesday, September 25, 2007
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.
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.
Monday, September 24, 2007
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.
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.
"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.
Thursday, September 20, 2007
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.
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)
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.
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.
Wednesday, September 19, 2007
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.
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.
Monday, September 17, 2007
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.
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.
Friday, September 14, 2007
Private equity groups foresee slowdown in deals as credit sources dry up
September 14 - Times Online (UK) - One of Britain’s leading venture capitalists has given warning that the market for leveraged buyouts will dry up for the next one to two years in the wake of the credit crisis.
Guy Hands, in a quarterly letter to investors in his Terra Firma buyout group, said: “The days of simply buying a good company, financing it well and enjoying a great return are over. The debt simply will not be there.”
The financier, who closed his £2.4 billion acquisition of EMI just before the markets turned, said that private equity firms would have to work much harder to get deals done. Read More.
Guy Hands, in a quarterly letter to investors in his Terra Firma buyout group, said: “The days of simply buying a good company, financing it well and enjoying a great return are over. The debt simply will not be there.”
The financier, who closed his £2.4 billion acquisition of EMI just before the markets turned, said that private equity firms would have to work much harder to get deals done. Read More.
M&A market may cool down with capital supply getting squeezed
September 13 - The Economic Times (India) - Mergers and Acquisitions market might cool down with supply of capital drying up in the context of increasing credit defaults and private equity (PE) activity about to peak, the Boston Consulting Group said.
"One of the factor not in favour of increased M&A in the light of the unfolding subprime crisis was that an increase in corporate defaults could reduce the amount of capital available to prospective acquirers," BCG's global study on M&A said. Read More.
"One of the factor not in favour of increased M&A in the light of the unfolding subprime crisis was that an increase in corporate defaults could reduce the amount of capital available to prospective acquirers," BCG's global study on M&A said. Read More.
Thursday, September 13, 2007
Private equity is in pause mode, Leech says
September 12 - The Globe & Mail (Canada) - Private equity buyers are adapting to the pricier debt market and there appear to be few people walking away from deals, said Jim Leech, who will take on the chief executive officer role at the Ontario Teachers' Pension Plan on Dec. 1.
Volatility in the credit sector sparked by defaults on high-risk mortgage loans in the United States has dampened the private equity market, but "this is a pause, not a conclusion," Mr. Leech, currently senior vice-president of Teachers' Private Capital, said in a speech in Toronto yesterday. Read More.
Wednesday, September 12, 2007
Bubble Energy?
September 11 - Forbes - Talk of an alternative energy "bubble" started percolating in the trade and cyber-press over the past several months. The fact is, the staid Dow Jones industrial average has done as well or better than most alternative energy indexes. So, hot, or not? Since global energy demand is rising unabated, the core question is, How big a piece can alternatives capture?
According to (some) wizards at Harvard, "Solar could meet one-fifth of U.S. energy needs within two decades." At least that's what they said 30 years ago in the widely acclaimed book Energy Future. What happened? If you count as solar both the obvious solar and indirect solar sources such as wind, wood, corn, geothermal and the like, America today hit a collective 4%, or one-twenty-fifth share. Read More.
According to (some) wizards at Harvard, "Solar could meet one-fifth of U.S. energy needs within two decades." At least that's what they said 30 years ago in the widely acclaimed book Energy Future. What happened? If you count as solar both the obvious solar and indirect solar sources such as wind, wood, corn, geothermal and the like, America today hit a collective 4%, or one-twenty-fifth share. Read More.
Private equity eyes UK property funding role
September 6 - Reuters (London) - Private equity smells an opportunity in UK commercial property. Prices are falling, but developers cannot get the funds to buy bargains because lenders rocked by the subprime crisis are running shy of the sector.
Unlike the vulture funds of the 1990s though, these opportunists are not planning hostile takeovers of property firms paralysed by a lack of credit.
Instead, private equity sees itself as "white knight", offering its own cash for funding should the need arise, with a view to a more traditional debt refinancing when banks' appetite for lending returns. Read More.
Unlike the vulture funds of the 1990s though, these opportunists are not planning hostile takeovers of property firms paralysed by a lack of credit.
Instead, private equity sees itself as "white knight", offering its own cash for funding should the need arise, with a view to a more traditional debt refinancing when banks' appetite for lending returns. Read More.
Tuesday, September 11, 2007
Flurry of deals carves up a Canadian industry
With foreign players knocking, energy executives say there's still a place for independents
September 10 - The Globe & Mail (Canada) - Canada's nascent wind power business has caught the attention of foreign players, who have been steadily buying up domestic companies as the industry consolidates into fewer and fewer hands.
While more buyouts are expected, wind energy executives say there is still room for small independent wind developers in an industry that is finding its feet in a burgeoning market for alternative energy sources.
This summer, two very different foreign players grabbed a foothold in the Canadian wind business. In June, U.S. investment bank Lehman Brothers bought a big stake in private Toronto wind and solar power developer SkyPower Corp. for an undisclosed sum. Read More.
September 10 - The Globe & Mail (Canada) - Canada's nascent wind power business has caught the attention of foreign players, who have been steadily buying up domestic companies as the industry consolidates into fewer and fewer hands.
While more buyouts are expected, wind energy executives say there is still room for small independent wind developers in an industry that is finding its feet in a burgeoning market for alternative energy sources.
This summer, two very different foreign players grabbed a foothold in the Canadian wind business. In June, U.S. investment bank Lehman Brothers bought a big stake in private Toronto wind and solar power developer SkyPower Corp. for an undisclosed sum. Read More.
M&A Hiring Shows Life Despite Leery Outlook
September 10 - WSJ - European banks and other financial institutions plan to hire more merger-and-acquisition staff, even though there has been a sharp jump in the percentage that think a bursting loan bubble poses the greatest threat to deals in the next year, according to a survey by IntraLinks M&A Monitor, in association with Financial News.
A poll of 348 banks, corporations, legal firms, and private-equity businesses conducted as the worst of the credit crisis was unfolding this summer found that 84% were seeking to hire staff, marking a sharp increase from 69% in April and 75% a year ago. The optimism was highest in Germany, where more than 90% of respondents said they expected to recruit additional personnel, the study found. Read More.
A poll of 348 banks, corporations, legal firms, and private-equity businesses conducted as the worst of the credit crisis was unfolding this summer found that 84% were seeking to hire staff, marking a sharp increase from 69% in April and 75% a year ago. The optimism was highest in Germany, where more than 90% of respondents said they expected to recruit additional personnel, the study found. Read More.
Monday, September 10, 2007
Wall Street Beat: M&A, VC funding stay hot
Cognos, Yahoo, and Oracle are among the companies making acquisition announcements
Merger and acquisition news from companies as diverse as Yahoo, Cognos, and MetroPCS Communications heated up IT investor interest this week, shoring up confidence in the sector even as credit-market concerns continued to buffet the stock exchanges.
After wireless carrier MetroPCS proposed a merger valued at about $5.5 billion with rival Leap Wireless, its share price Tuesday spiked $1.36 to close at $28.65. Brokerage Jefferies & Co. Wednesday then upgraded its rating on the stock from "hold" to "buy," sparking another uptick in the company's share price. Though the merged company would have about 6.2 million customers, a far cry from the 50 million-plus subscriber base that market leaders like AT&T and Verizon have, the combined company would be the fifth largest in the U.S., with a national footprint. Read More.
Merger and acquisition news from companies as diverse as Yahoo, Cognos, and MetroPCS Communications heated up IT investor interest this week, shoring up confidence in the sector even as credit-market concerns continued to buffet the stock exchanges.
After wireless carrier MetroPCS proposed a merger valued at about $5.5 billion with rival Leap Wireless, its share price Tuesday spiked $1.36 to close at $28.65. Brokerage Jefferies & Co. Wednesday then upgraded its rating on the stock from "hold" to "buy," sparking another uptick in the company's share price. Though the merged company would have about 6.2 million customers, a far cry from the 50 million-plus subscriber base that market leaders like AT&T and Verizon have, the combined company would be the fifth largest in the U.S., with a national footprint. Read More.
Mergers can survive without private equity: Rubin
September 7 - Financial Post (Canada) - If mergers and acquisitions are going to continue to drive stocks higher, forget about getting much of a boost from private equity buyout firms.
These firms had been playing an increasingly important role during the buyout boom earlier this year and were involved in big deals, like the takeover of Bell Canada Inc. and Chrysler. Now, though, they appear to be withdrawing from the market.
According to Jeff Rubin, chief economist and chief strategist at CIBC World Markets, global private equity deals hit a peak of about US$150-billion in May, but then declined substantially in June and again in July. In Mr. Rubin's words, they then fell off a cliff: In August, there were just US$17.8-billion of private equity deals, a tiny fraction of their former glory. Read More.
Friday, September 07, 2007
BMO Capital Markets Releases Annual M&A Report on the North American Transportation Industry
M&A activity remained strong in 2006 and deal volume is expected to continue but may be slower in the short-term due to current credit market conditions
September 6 - CNN Money - The two-volume report provides an in-depth review of mergers and acquisitions and corporate finance activity among Transportation Industry Service Providers and Transportation Equipment Manufacturers. The report also looks at the level of M&A activity in various sub-sectors, including active strategic and financial acquirers and a summary of financial parameters, including valuation metrics.
"Overall, the M&A activity in the transportation industry remained strong in 2006 with a total number of 253 transactions being announced," said Paul Hawkinson, Managing Director and Head of BMO Capital Markets' Commercial & Industrial Sector Group. "The volume of activity was driven by several secular trends including the continued outsourcing of transportation activities by corporations and the off-shoring of manufacturing activity as corporations moved to lower costs." Read More.
September 6 - CNN Money - The two-volume report provides an in-depth review of mergers and acquisitions and corporate finance activity among Transportation Industry Service Providers and Transportation Equipment Manufacturers. The report also looks at the level of M&A activity in various sub-sectors, including active strategic and financial acquirers and a summary of financial parameters, including valuation metrics.
"Overall, the M&A activity in the transportation industry remained strong in 2006 with a total number of 253 transactions being announced," said Paul Hawkinson, Managing Director and Head of BMO Capital Markets' Commercial & Industrial Sector Group. "The volume of activity was driven by several secular trends including the continued outsourcing of transportation activities by corporations and the off-shoring of manufacturing activity as corporations moved to lower costs." Read More.
Deals Boom Fizzles As Cheap Credit Fades
September 6 - WSJ - The global mergers-and-acquisition boom that began in 2003, the greatest deal frenzy in history, is winding down.
This summer's crisis of confidence has choked off the easy credit that fueled buyouts for years, abruptly altering the psychology of the deal market. Through June, M&A activity, as measured by total transaction values, had been running at its highest annual rate ever and was on pace to generate the deepest pool of investment-banking fees.
But within weeks, the market began to run out of steam. In August, there were about $222 billion worth of deals around the globe, according to market research firm Dealogic, the lowest monthly total since July 2005, and a far cry from the $695 billion figure struck in April and the $579 billion in July. Read More.
This summer's crisis of confidence has choked off the easy credit that fueled buyouts for years, abruptly altering the psychology of the deal market. Through June, M&A activity, as measured by total transaction values, had been running at its highest annual rate ever and was on pace to generate the deepest pool of investment-banking fees.
But within weeks, the market began to run out of steam. In August, there were about $222 billion worth of deals around the globe, according to market research firm Dealogic, the lowest monthly total since July 2005, and a far cry from the $695 billion figure struck in April and the $579 billion in July. Read More.
Thursday, September 06, 2007
Dissident investor wins 3 H&R Block board seats
September 6 - Reuters - Activist investor Richard Breeden has won three seats on H&R Block's board, advancing his effort to push the company to focus on tax preparation and quit businesses such as banking and mortgage lending.
The slate proposed by Breeden, a former Securities and Exchange Commission chairman, was victorious based on a preliminary count of shareholder votes, H&R Block said Thursday at its annual meeting in Kansas City, Missouri.
Since late June, Breeden had campaigned for seats on H&R Block's 11-member board, and had won the support of the three major U.S. proxy advisory firms. He won seats for himself and two associates: Robert Gerard, a former assistant U.S. Treasury secretary; and L. Edward Shaw. Read More.
UK and global M&A set new record - and open to new players
September 5 - Finance Week - Acquisitions by, and of, UK companies both jumped in the second quarter; but this may have featured the final flourish for big, leveraged private equity deals. While raising loans for M&A has got a lot harder in Q3, the global boom is set to continue – but with new trade players leaping on devalued stocks, especially in the US.
British companies stepped up their overseas M&A activity in Q2, but also became more frequent targets for foreign acquirers, according to figures released yesterday by the Office of National Statistics. Foreign acquisitions by UK-based firms totalled £16.9bn in Q2, four times the Q1 expenditure and three times the amount in Q2 last year. Acquisitions of UK firms from abroad reached a new record of just under £50bn, nine times the Q1 figure and more than 2.5 times that of Q2 2006. Read More.
Wednesday, September 05, 2007
ACG/Grant Thornton: U.S. Middle Market Corporate Executives and M&A Professionals Target More Cross-Border Deals
Dealmakers Search for Geographic Diversification, Access to New Markets, and Greater Efficiencies
69% Bullish About Cross-Border M&A 92% Say Deals Met Objectives; 58% Say Took Longer than Expected
September 4 - ACG - U.S. mid-market corporate executives and merger professionals are looking to aggressively target cross-border acquisitions in the next 12 months, according to a survey of more than 200 U.S. active representatives of middle-market companies, investment banks, private equity firms, law firms, accountants and consultants by ACG (Association for Corporate Growth), Grant Thornton LLP, and Eureka Private Equity.
The survey found that nearly three-quarters (72%) of respondents have been involved in cross-border M&A, and, almost as many, 70% anticipate doing at least one cross-border deal in the next 12 months. Most are bullish on the current environment for cross-border M&A, with 69% saying the current environment is good, and 31% calling it fair. Read More.
69% Bullish About Cross-Border M&A 92% Say Deals Met Objectives; 58% Say Took Longer than Expected
September 4 - ACG - U.S. mid-market corporate executives and merger professionals are looking to aggressively target cross-border acquisitions in the next 12 months, according to a survey of more than 200 U.S. active representatives of middle-market companies, investment banks, private equity firms, law firms, accountants and consultants by ACG (Association for Corporate Growth), Grant Thornton LLP, and Eureka Private Equity.
The survey found that nearly three-quarters (72%) of respondents have been involved in cross-border M&A, and, almost as many, 70% anticipate doing at least one cross-border deal in the next 12 months. Most are bullish on the current environment for cross-border M&A, with 69% saying the current environment is good, and 31% calling it fair. Read More.
Tuesday, September 04, 2007
M&A robust for tech sector
August 31 - Small Business Times - Merger and acquisition activity within the technologies service sector is robust, with strategic
buyers targeting companies that provide help desk, data center, hosting, outsourced IT departments and other services.
Strategic buyers are more active in the IT sector than private equity investors.
“The big difference is that in IT, it’s virtually all strategic buyers,” said Victoria Fox, managing director with Emory & Co., a Milwaukee-based investment banking firm. “There is really not a big private equity interest.”
Strategic buyers generally look for two things in the IT service sector – geographic location or an add-on offering they do not currently provide. Many IT service providers are trying to have as many offerings as they can for clients, making niche providers especially attractive. Read More.
Field leveling for M&A players
August 30 - TwinCities.com - Not everyone is stressed about the credit crunch. Reid MacDonald might even go so far as to say he's a little excited about it.
The CEO of Minneapolis-based Faribault Foods says he thinks small companies like his that are looking to make acquisitions will benefit from the new credit environment because they'll be better able to compete for deals.
As lenders pull back on financing, the private-equity firms that have been snapping up companies at record prices could be forced to pull back on highly leveraged deals. As they do so, the prices they pay for their acquisitions likely will come down, finance experts say.
That's good news for strategic buyers like Faribault Foods, which has been outbid by private-equity firms on at least a handful of deals in recent years. Read More.
The CEO of Minneapolis-based Faribault Foods says he thinks small companies like his that are looking to make acquisitions will benefit from the new credit environment because they'll be better able to compete for deals.
As lenders pull back on financing, the private-equity firms that have been snapping up companies at record prices could be forced to pull back on highly leveraged deals. As they do so, the prices they pay for their acquisitions likely will come down, finance experts say.
That's good news for strategic buyers like Faribault Foods, which has been outbid by private-equity firms on at least a handful of deals in recent years. Read More.
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