Despite the Sluggish Economy, Study Finds Optimism Among Middle-Market Companies in Midwest

April 30 - WWJ (Mich.) - The economic news for the Midwest and the nation has not been good. But a report out today from Plante & Moran PLLC, a Southfield-based accounting firm, found a lot of optimism among executives of medium-sized companies in Michigan, Ohio and Illinois.

The survey, which took the pulse of senior executives at middle-market companies in those states, found that more than two thirds are very or somewhat optimistic about the future growth and success of their organizations. A similar survey done in 2006 found that 55.9 percent of respondents felt that way then.

“Probably the most significant surprise in the survey was the level of optimism in middle-market businesses,” said Plante & Moran Managing Partner Bill Hermann.Hermann said that optimism comes, in part, from the nature of medium-sized businesses. Middle market companies – those with revenue of about $5 million to $500 million – often have levels of flexibility and growth potential that larger corporations can't match, he said. Read More. (Read complete report)

Carlyle Co-Founder Defends Private Equity

April 28 - TheStreet.com - David Rubenstein, co-founder of the private-equity behemoth Carlyle Group, defended his company and the industry he stands for just moments after being harrassed by disgruntled union organizers today.

In his keynote presentation to the Society of American Business Editors and Writers annual conference in Baltimore, Rubenstein said, "the biggest cost-cutting efforts in the U.S. have nothing to do with private equity."

He noted that the idea of private equity is to make companies more efficient, but to do so outside of the glare of the quarterly earnings cycle to which public companies are subjected. Read More.

Et Tu, Middle Market?

April 24 - Deal Journal Blog (WSJ) - Deals are like blueberries: when the big ones get picked off, you can usually find masses of little pale delicious ones in the shade on the lower branches of the bush.

It is the little blueberries of the M&A world that constitute what Wall Street calls “the middle market,” and it includes deals valued from $50 million to $500 million–though at the biggest investment banks, like Goldman Sachs Group and UBS, that range can go as high as $1 billion. And when things get rough, as they are now, Wall Streeters expect those little blueberries to make up a nutritious and filling pie full of rich, buttery fees for their firms. Goldman Chief Executive Lloyd Blankfein even said in late 2006 that the firm would look to work on more midsize deals. Read More.

M&A funding remains in place despite credit crunch

April 22 - Financial News (U.S.) - Financing terms for the majority of mergers and acquisitions in the US have remained unchanged despite the onset of the global credit crunch last year, which severely dented the lending capacity of many banks.

According to a survey on M&A trends in the US, commissioned by law firm Nixon Peabody, 61% of respondents said they had experienced no revisions to the terms on offer to them despite the credit crunch.

The survey of 104 corporate executive and private equity practitioners found that banks have not been walking away from financing commitments given to companies and buyout firms that have been involved in deal making in the last year. Read More.

Healthcare and Investment Leaders Convene Next Week for iiBIG's Chicago Healthcare M&A Forum

April 22 - Marketwire - What lies ahead for investments in the healthcare sector? Deal volume in the healthcare sector in October 2007 surged to its highest monthly level ever. A total of 102 deals -- with over $14.0 billion in commitments -- is evidence that investment and M&A activity in the healthcare space will be robust in 2008 and beyond.

Next week's iiBIG's Investment and M&A Opportunities in Healthcare Forum, scheduled for April 30-May 1, 2008 in Chicago, has attracted over 130 decision-makers and players in this market -- from financial institutions, healthcare and pharma companies, law firms, and other consultancies. Read More.

Global technology M&A market proving resilient

April 22 - MarketWatch - PricewaterhouseCoopers said Monday that while the headlines are dominated by the negative implications of the global credit crunch, the global technology merger and acquisition market is proving to be a very resilient beast.

The first quarter of 2008 has already seen numerous landmark deals announced, including the pending bid for Yahoo by Microsoft, and in the U.K. the $1 billion leveraged buy-out of Northgate Information Solutions by KKR and the recently announced GBP190 million recommended offer by 3i for Civica, PwC said.

Current activity levels and deal pipelines suggest that strategic and transformational deals are still very much on the boardroom agenda of technology companies, and the demise of the LBO has been overplayed in the technology sector. Read More.

Market data: Tech deals strong; PE buys financials

April 18 - Corporate Dealmaker Blog (The Deal) - A trawl through Capital IQ's 56-page "Monthly Market Observations" report for April puts numbers to some M&A trends we knew about and hints at a few others.

We're working here with numbers that compare the 12 months ending March 31, 2007, to the 12 months ending March 31, 2008. Overall deal volume doesn't change that much because of the starting points; it actually goes up in deals with European targets, despite the market's dramatic slowdown in the first quarter of this year. Still, when you start to look at different sectors, things get interesting. Read More.

Global M&As cross $1 tn in '08; India share just 1 pc

April 20 - The Economic Times (India) - The ongoing crisis in global financial crisis notwithstanding, the value of merger and acquisition deals announced across the world has crossed $1 trillion mark since the beginning of this year.

However, India's share in this global tally is just about 1 per cent, or about $10 billion. This is less than half of about 2.5 per cent share in the comparable period of 2007.

While the value of year-to-date global deals has declined by 27 per cent from the comparable period of 2007, that for deals involving India Inc has dropped by 71.5 per cent. Read More.

TechBiz Connection Hosts Panel Discussion on Successful Strategies for Mergers and Acquisitions

April 9 - PR.com - TechBiz Connection will host a distinguished panel of local experts who will share their expertise in navigating a successful merger or acquisition at its monthly forum on Wednesday, April 16 from 6:00 to 9:00 PM at Calit2 at the University of California, Irvine.

The panel moderator will be Charlene Davidson, senior managing director of RSM EquiCo Capital Markets. Ms. Davidson has more than 20 years of global corporate and investment banking experience, advising entrepreneurs, principals and corporations on an array of business transactions, including strategic planning, capital raising, and M&A. She has executed comprehensive capital structure strategies for public and private companies as well as provided advisory roles for capital raising, liquidity access, investment management, cross border banking and global corporate finance activities. Prior to RSM, Ms. Davidson was most recently a senior managing director at BankAmerica Securities LLC in the Technology Group. Read More.

Dealwatch: Middle market

April 8 - Dealscape blog (The Deal) - Midmarket dealmakers have kicked off April with a flurry of news, from record-breaking new funds and investments to deals for small, well-known companies:

• TPG unveiled April 8 an $800 million investment in Russian pharmaceutical distributor SIA International, said to be the biggest-ever PE investment in a Russian company.
• April 7, Advent International said it had raised a $10.4 billion global fund, which it called the largest-ever focused on the midmarket.
• The same day, Neilsen Co. revealed it had bagged IAG Research Inc. for $225 million, and Discover Financial Services said it would pay Citigroup Inc. $165 million for Diners Club International.

And in an April 7 Special Report, The Deal profiled several "Faces of the middle market," or "more than a dozen personalities, many of which recall an era when folks rolled up their sleeves, got their hands dirty and didn't rely on debt to do the job for them." Read More.

Plante & Moran Conducts '2008 Perspective on the Midwest Middle Market: Recognizing Optimism in Uncertain Economic Times' Research Study

Preliminary Findings Indicate a Widening Gap Between What is Happening in the Economy versus What is Happening with Middle Market Businesses in the Midwest

April 8 - PRNewswire - Plante & Moran, PLLC,the nation's 12th largest certified public accounting and business consulting firm, today announced that it is scheduled to release the results of "The Plante & Moran 2008 Perspective on the Midwest Middle Market: Recognizing Optimism in Uncertain Economic Times" research study on April 28.

Comprised of a comprehensive survey and a companion whitepaper, this multi-industry research study will explore the perceptions of business executives and company owners in a variety of industries - including construction, financial institutions, healthcare, manufacturing and distribution, public sector, real estate and service industries -surrounding current and future economic conditions in the Midwest(specifically Michigan, Ohio and Illinois). The study also will measure attitudes of these stakeholders relative to opportunities for business growth within their geographic region. Read More.

The Most Valuable Companies in America

April 8 - Fox Business - A lot of the economic news these days seems depressing, but there is at least one reason to remain optimistic: It's still a great time to sell your business.

Sure, the downturn in the housing market and the resulting credit crunch are expected to dampen the number of billion-dollar deals led by private equity firms. But investment capital as a whole aimed at the middle market -- consisting of companies with less than $500 million in annual revenue -- remains plentiful. Venture capital firms alone raised about $34.7 billion in 2007, more than in 2006, according to the National Venture Capital Association. New hedge funds raised some $31.5 billion, according to MarketWatch. For those and other investors, the question is how to put all that money to work. Read More.

Private equity deals less leveraged: financier

April 7 - Reuters - Private equity firms are being forced to put more equity into their portfolio companies as the days of excessive leveraging appear to be over, a private equity financier said.

Private equity companies who once could borrow as much as 90 percent of the enterprise value of a company, leaving equity to represent a mere 10 percent, are now forced to put as much as half of a company's worth in equity, Buchan Scott, a partner at Duke Street Capital, said at the Reuters Hedge Funds and Private Equity Summit in London.

"We'll see private equity companies having to put more money into their companies," Scott said. "It's definitely increasing." Read More.

Report: Tech deals tumble slightly in quarter

April 4 - CNET News Blog - When it comes to technology-related mergers and acquisitions in the first quarter, think "still waters run deep."

According to a first quarter M&A spending report released Friday by The 451 Group, proposed technology deals totaled $92 billion in the three-month period for 778 deals, down a notch from $100 billion in the same period a year ago for 1,059 transactions.

But keep in mind, and rightly so, Microsoft's initial blockbuster $44.6 billion buyout bid for Yahoo, accounts for nearly half of the technology M&A deals proposed in the quarter. Read More.

Big bankers chase small M&A deals

Even midsize pool is crowded as megamergers become memories

April 5 - Crain's New York Business - In the Cohen family's 80 years in the eyewear business, about the closest it ever came to Wall Street was the Lower East Side, where Jack Cohen started out, selling spectacles from a pushcart.

But that changed last fall, when Robert Cohen, president of Cohen's Fashion Optical Inc., got a call from someone at Deutsche Bank's U.S. arm. The Frankfurt-based giant—best known for financing such multibillion-dollar buyouts as Hilton Hotels and First Data—thought it could find a buyer for the company if Mr. Cohen was interested in selling. Read More.

A little perspective on surging oil, mining, utility M&A

April 2 - Corporate Dealmaker Blog (The Deal) - While the world laments the death of M&A given the credit crunch, financial institutions crumbling and the gyrating stock market, oil and gas, power and mining deals are thriving. According to three separate reports over the past month by PricewaterhouseCoopers, M&A value levels were up .3% in the oil and gas industry last year to $292.2 billion, up 25% in power to $372.5 billion and up 18% in mining to $158.9 billion.

The figures aren't a big surprise, as demand for energy and natural resources in developing countries like China and India continues to grow and companies' profits continue to surge on record commodity prices. Read More.

M&A Business in Trough, To Rebound Next Year, Says Brunswick Study

April 2 - The Earth Times - A slight majority of leading M&A advisers polled believe that the economy is fundamentally sound and the merger business will pick up in one year to 18 months, according to a new survey by Brunswick Group LLC.

The survey polled leading bankers and lawyers in the U.S. to gauge the impact of the current downturn but did not poll private equity firms or corporate acquirers. The results were announced on the eve of the 20th Annual Tulane Law School Corporate Law Institute, the leading M&A conference that hosts the nation’s top deal lawyers, Delaware judges, bankers and other market participants to discuss the latest trends.

Fifty-two percent of those polled believe the M&A market is in a trough that will turn by mid 2008, and another 41% agreed with the more bearish statement, “We are moving into a recession – it will take up to five years to return to the level of M&A activity we saw in 2007.” A small minority of diehard optimists, 7%, regard the dip as “a short-term blip – less than a year.” Read More.