2007 to Become Record Year for Mergers: Apply Best Practices For M&A Success

January 29 - PRNewswire - The new year has just started and already the news is filled with upcoming mergers andacquisitions; companies in every industry are spending billions identifyingand acquiring new entities with the goal of growing market share, product portfolios and long-term profits. And market conditions in 2007 have notbeen this favorable for M&A deals since the late 1980s. However, deals are often struck without careful planning of theaftermath. Integrating two independent businesses, strategies, cultures andsystems to run smoothly under one roof is an underestimated task with manyobstacles. Read More.

Private equity to drive 2007 M&A activity

January 29 - LawTimes.com - Now that the government has effectively shut down the income trust market, what will drive Bay Street in 2007? Weep not for big law firms. The market is not expected to cool down anytime soon. Torys LLP, Blake Cassels & Graydon LLP, and KPMG LLP have all weighed in with studies examining upcoming mergers and acquisitions activity in 2007. They expect activity to increase and predict that private equity deals will play a more prominent role in capital market activity this year. Read More.

Small deals to dominate 2007 utility M&A

January 26 - MergerTalk - Small takeovers by investment funds and sales of unregulated power plants will be a large part of utility mergers and acquisitions this year as companies try to navigate the changing regulatory and environmental scene.

The risk of higher environmental costs, uncertainty about natural gas pricing, and concerns about having enough capacity to meet future demand will drive such deals, industry lawyers and experts said. Read More.

Plans for M&A Activity On the Rise for Fast Growth Private Companies

January 24 - PRIMEZONE - Plans for mergers and acquisitions are on the rise for America's fast-growth private companies: 38 percent are planning an acquisition or merger over the next three years. This compares favorably with 20 percent that actually acquired another company or division of a larger company over the past three years. Another 28 percent expect to put their company, or part of their company up for sale over the next three years. And some CEOs expect both transactions, which means that half (50 percent) of "Trendsetter" CEOs expect to be involved in either an M&A or company sale over the next three years. Read More.

Mid-sized US firms offered as best targets

January 23 - Business Times Singapore - S'pore companies urged to look at top consumer market

Some middle-sized US companies will end up in Singaporean hands if local businesses take the advice of Hector Cuellar, president of RSM EquiCo Capital Markets.

'Singapore companies have captured some regional markets; it is time to expand into the largest consumer market in the world,' Mr Cuellar said in an interview with BT yesterday.

With much of the manufacturing done in Asia, companies now have to think about vertical integration - how to better distribute into the US. Other reasons for buying into a US company include broadening one's product suite and diversifying geographically.

'The capital formation in Asia - particularly India and China - has been impressive in the last few years. Asian companies now have the capital to 'attack' the largest market,' he said.

The middle market, businesses with revenue of up to US$1 billion, is where the opportunities lie. 'It's lower risk, lower valuation, less regulatory hurdles, easier to integrate, easier to get financing and promises higher returns,' Mr Cuellar said.

Historically, he said, small company buyouts - those costing less than US$250 million - have outperformed large buyouts by 5 to 7 percentage points.

Mr Cuellar sees companies involved in energy, financial services, technology, chemical, aerospace, food and healthcare services as prime candidates for acquisition by Singapore companies.

He, however, admits that the recent frenzied activities on the merger and acquisitions front have pushed up valuations for US companies. RSM EquiCo handled 52 transactions worth US$1.8 billion last year. That's up from just 36 transactions worth US$800 million in 2005.

On average, companies now sell for seven to eight times their projected earnings before tax, depreciation and amortisation (Ebitda).

This kind of valuation, however, may prove too high for Singapore companies, considering that many medium-sized Singapore listed companies are trading at similar or even lower multiples. For example, hard-disk drive component maker Jurong Technologies is trading at 7.6 times its Ebitda for 2005, while furniture maker HTL is currently valued at 6.2 times 2005 Ebitda.

Besides valuation, culture can also be a key factor in determining the ultimate success or failure of an acquisition. Mr Cuellar said that on that front, he didn't have any data on how successful Asian companies have been in making their acquisitions work in the US.

The advice from Mr Cuellar is to get the right adviser in negotiating and structuring the deal so that the existing management and staff are properly incentivised, making sure that their interests are aligned with those of the new owners.

2006 Was Record Year for Investment Bank RSM EquiCo Capital Markets

January 18 - Excite Money & Investing - RSM EquiCo Capital Markets LLC, a global investment bank, reports that 2006 was a record-breaking year for the firm, with 52 completed transactions and the generation of $1.8 billion in liquidity on behalf of its clients.

"We had a terrific year in 2006 and have emerged as a formidable player in middle-market mergers and acquisitions," said Hector J. Cuellar, president of both RSM EquiCo Capital Markets and its parent, RSM EquiCo, Inc. Cuellar attributed the firm's success to a variety of factors, including its specialized expertise in 12 distinct industry sectors; continually expanding team of senior-level dealmakers; cross-border dealmaking expertise; and growing reputation among both strategic and financial buyers. Read More.

No mergers here, banks look abroad

January 18 - GlobeAndMail.com - Canada's Big Five look to foreign acquisitions in push for profits. Perennially frustrated in their attempts to do domestic mergers, the CEOs of Canada's banks are stressing their foreign expansion plans as they push to build profits.

In a presentation yesterday in Toronto, incoming Bank of Montreal chief executive officer Bill Downe said none of the banks expect to be allowed to marry up their domestic operations. Read More.

Financial services M&A booms

January 10 - Financial News-US.com - Dealflow from asset managers and boutique investment banks boomed in 2006, leading one of the most robust years in recent history for financial services mergers, according to a new survey from Freeman & Co. Last year, asset management M&A boomed, with deals for alternative asset managers, such as hedge funds, hitting an all-time high of 55 transactions. Read More.

Survey: Mergers will continue this year

January 10 - Memphis Business Journal - 2007 is expected to be another strong year for mergers and acquisitions. In a December survey by the Association for Corporate Growth and Thomson Financial, Memphis merger professionals expressed high confidence in M&A activity going into 2007.

"An abundance of private equity capital, relatively low interest rates and the resurgence of strategic buyers all helped drive record M&A activity in 2006," Randy Karchmer, president of ACG Memphis and managing director at Morgan Keegan & Co., stated in a release. "None of these are in short supply as we enter 2007. We expect the global M&A machine to continue to fire on all cylinders." Read More.

Global mid-market M&A activity rises 12 pct to 788 bln usd in 2006

January 10 - Forbes.com - Activity for mid-market global mergers and acquisitions rose to 788 bln usd in 2006 from 701 bln usd in 2005, a report from Thomson Financial says today. The countries leading the way in deals valued up to 500 mln usd were the USA, the UK, Australia and China, although there was some drop-off in M&A activity elsewhere, notably in Japan. Read More.

Time to Sell? 5 Tips for a Smart Exit Strategy

January 9 - Expert Business Source - Burnt out? Looking for a lifestyle change? Maybe it’s time to sell your business. Done right, a sale can be a rewarding experience, both emotionally and economically. Done poorly, a sale can leave a bad taste in your mouth – and money on the table.

With the housing market in flux, a business owner may be hesitant to put a for sale sign on his company. But the reality is that savvy buyers are out there, looking for good deals in the construction sector in anticipation of the next upswing, says John Dorey, a senior managing director with RSM EquiCo, an investment banking firm in Costa Mesa, Calif.

“Companies that are doing fairly well, have weathered the last year, and have a backlog are prime candidates for [private equity] rollups and for others in the industry looking to buy,” says Dorey, who heads up EquiCo’s Specialty Construction Division. Read More.

5 Tips for Making Smart Acquisitions

January 4 - Expert Business Source - The slump in the housing market has caused many construction firms to hunker down. But for businesses looking to grow, the time may be right to consider a strategic acquisition. After all, the funny thing about cycles is that every downturn is followed, eventually, by an upswing.

“The housing market will come back – it’s not a matter of if, but when,” says John Dorey, senior managing director at investment banker RSM EquiCo, in Costa Mesa, Calif. “You can anticipate a lot of action back in the housing sector in Q1 or Q2. You’re already seeing little blips of it on Wall Street.”

Because a transaction can take several months to close, forward-thinking companies may want to think about casting around now for potential targets. “You don’t have to wait for the market to be boiling to get into it,” says Dorey, who leads EquiCo’s Specialty Construction Division. Read More.

RSM EquiCo Inc. launches Executive Briefing site

RSM EquiCo Inc., recently launched a useful mico-site outlining the benefits of RSM EquiCo's Executive Briefing conferences. The purpose of the executive briefing is to give business owners a basic understanding of how the professional M&A process works. Visit the Executive Briefing site for more information.

Mergers and acquisitions in Canada almost doubled in 2006 to US$173.6B

January 3 - Canadian Press - TORONTO (CP) - Investment banking advisers at KPMG Corporate Finance have put a number on the 2006 boom in mergers and acquisitions in Canada: US$173.6 billion. This almost doubled the 2005 value of US$89 billion for Canadian M&A, as the number of deals increased 26 per cent, KPMG said Wednesday. Read More.

Mergers and acquisitions pace expected to moderate

December 29 - Central Valley Business Times - Corporate mergers and acquisitions will continue to increase in 2007 but at a somewhat more moderate pace, according to a survey of financial executives. Twenty-seven percent of chief financial officers polled said they expect the number of corporate mergers and acquisitions (M&As) overall to increase in the next 12 months. Read More.

Energy sector could see more mergers in '07

December 30 - Houston Chronicle - Oil exploration and production companies that have enjoyed record profits fueled by high commodity prices over the last two years may go to the altar in 2007 to keep growing. Analysts say the energy sector could see more mergers and acquisitions to counteract difficulty in gaining access to oil and natural gas and higher costs of getting it to the surface. Read More.

Financial execs say M&A pace will continue

January 2 - Nashville Business Journal - It was a frenzied year for mergers and acquisitions in 2006, but chief financial officers aren't necessarily expecting a slowdown, according to a recent survey. A poll by Robert Half Management Resources of 1,400 CFOs at U.S. companies found that 27 percent expect corporate merger and acquisition activity to increase in the next 12 months, while 65 percent expected no change. Read More.