Edge - Chaparral Merger A No-Go

The all cash transaction was cancelled as a result of the lack of debt and equity financing.

Dec 17, 2008 - Mergers Unleased - By AVRAM DAVIS - Edge Petroleum and Chaparral Energy have terminated the all-stock merger, due to lack of debt and equity financing. Chaparral was to acquire Edge, with Edge stockholders receiving 0.2511 shares of Chaparral for each share of Edge stock. Edge and Chaparral are both oil and natural gas companies, based in Houston, Texas and Oklahoma City, Oklahoma respectively.

The companies cancelled the transaction as it became apparent that it was “highly unlikely” that the conditions necessary for the deal to close would be satisfied. It was necessary for the conditions of the merger agreement to be met by December 31, 2008, and the companies were not able to raise sufficient debt and equity financing. Read more.

The M&A Slowdown by the Numbers–The Case of the Missing Fees

11 Dec 2008 - Deal Journal - “M&A is all but dead.”

That was the pronouncement from Deal Journal colleague Matthew Karnitschnig this morning.

Global deal volume fell to $262 billion last month, according to Dealogic. While low, that number is nothing to sneeze at. But exclude the spate of government investments last month and the total tumbles to levels not seen since 2003. For those who have tried hard to forget those barren years, global deal volume reached $1.4 trillion that year and the value of only eight deals topped $10 billion. Now compare that with last year, when $4.5 trillion of deals were announced and more than 30 deals topped $10 billion.

Perhaps more importantly, the value of withdrawn deals is higher than the value of announced deals, Karnitschnig points out. And that fact is hitting investment bank where they don’t want to get hit–in their wallets.
Read more.

Morgan Stanley M&A Chief McDonald Dies

Dec. 8 - LONDON (Reuters) - Gavin MacDonald, the head of mergers and acquisitions at Morgan Stanley, has died. He was 47.

MacDonald died on Friday evening, after suffering a heart attack at Morgan Stanley’s offices in Canary Wharf, London, earlier last week, Morgan Stanley spokesman Michael Wang said.

A founding member of Morgan Stanley’s European M&A team, MacDonald had worked on a string of multi-billion dollar deals, and became global head of M&A in 2007 — the first London-based banker to hold that role for the Wall Street firm. Read more.

William Blair & Co. to cut staff

4 Dec 2008 - Chicago Business (Crain’s) — Investment firm William Blair & Co. said Thursday it's cutting staff in an effort to combat declining business during the economic slowdown.

The Chicago-based company said it is laying off less than 10% of its 1,000 employees, according to the Chicago Tribune. Read more.

Credit crunch may fuel oil and gas M&A

4 Dec 2008 - TheDeal.com - Nearly three-quarters of oil and gas CFOs polled in a recent survey said they expect the U.S. economic crisis to impact their ability to borrow money or extend bank debt in 2009. In addition, well over half the 100 executives surveyed by the accounting firm BDO Seidman LLP in October and November said that credit capacity restraints, including access to capital, will be their greatest challenge next year, followed by falling oil or natural gas prices. "They feel gravely concerned about raising money," said Charles Dewhurst, a partner at the firm and leader of its national energy practice in Houston.

Dewhurst says the credit drain may lead more companies to consider buyouts or bankruptcy as a solution. "With less credit and lower prices, smaller E&P [exploration and production] companies are going to be attractive acquisition targets for larger companies, and because of debt constraints, many are going to feel compelled to sell," he said.

Companies that put together projects and borrowed money based on $150 barrel oil will be most vulnerable. Read more.

Tech Giants Still Seek Acquisitions–At the Right Price

3 Dec - Deal Journal - Deep-pocketed technology giants such as Microsoft and Google plan to continue snapping up companies during the economic downturn, likely benefiting from an ability to drive a hard bargain with even red-hot start-up companies, according to executives speaking at a venture capital conference Tuesday.

At issue is the fairly nebulous way that Silicon Valley’s closely-held start-up companies calculate their own values, absent the input of a larger group of investors in a public market. In more flush times, even small companies with relatively undeveloped businesses often commanded high acquisition prices.

Those days are over, executives said during a presentation at the AlwaysOn Venture Summit. Microsoft Corporate Vice President Dan’l Lewin said that while the Redmond, Wash., software giant’s appetite for acquisitions hasn’t waned, its willingness to entertain high valuations has. “The negotiations on valuation might be difficult, but we’re not going to stay away because of the economic climate,” Lewin said.

Read more.

JPMorgan Plans 3,000 I-Banking Job Cuts

Nov. 21 - PEHUB - NEW YORK (Reuters) - JPMorgan Chase & Co is cutting 10 percent of its investment banking staff — about 3,000 jobs — as the economic slowdown starts to bite into its earnings, people familiar with the situation said on Thursday.

JPMorgan shares slid as much as 18 percent as one analyst said the cuts could reflect greater-than-expected weakness at the bank, long seen as one of the industry’s few stalwarts through the credit crisis.

“Because JPMorgan has held up relative to the group, they’re more vulnerable to a fall,” said Ben Wallace, securities analyst at Grimes & Co in Westborough, Massachusetts, which holds JPMorgan shares.

“Cutting investment banking jobs raises questions about profitability at the firm,” he said.

The company will likely cut staff in line with competitors such as Goldman Sachs Group, which is cutting 10 percent, the sources said.

On Thursday, JPMorgan let go at least six equity sales officials from its New York desk, according to one person familiar with the matter. Read more.

Looking for deal activity in '09? Think energy, healthcare and tech

Nov. 18 - Thedeal.com - The 2009 outlook for M&A activity is bleak for most sectors, but it's not universal. Jeff Bistrong (pictured), a managing director with the middle-market investment bank Harris Williams & Co., predicts relatively robust dealflow in energy, healthcare and technology. Here's what he had to say about each sector:

Energy: "The downward movement in equity and commodity prices in the energy market will temper short-term deal activity," says Bistrong, "but it will not undermine the long-term prospects." He points to the sale his firm helped facilitate in October of energy maintenance, repair and industrial cleaning provider Aquilex Holdings LLC from Harvest Partners LLC to the Ontario Teachers' Pension Plan as an example of the healthy appetite for deals in the sector. "We've invested heavily in this space, and we'll continue to do so," says Bistrong.

Healthcare: Harris Williams helped sell online health counselor HealthMedia Inc. in October to Johnson & Johnson Services Inc., and the company is working on the sale of three additional healthcare companies operating in the Internet space. Bistrong predicts decent dealflow in the healthcare sector because it is secular from the macroeconomic environment, but he says activity will be particularly robust among healthcare IT companies.

Technology: The software-as-a-service model is driving deal activity in the tech sector. That's a change, says Bistrong, from the not-so-distant days when lenders favored deals involving hardware companies with assets to sell over software companies with less predictable cash flow. Now, he says, "lenders are supporting tech growth by focusing on software companies with recurring revenue models, often subscription-based, where there is significant revenue visibility, and therefore significant visibility into cash flow. Read more.

Boston Scientific eyes M&A as biotechs suffer

Nov. 13 - thedeal.com - Boston Scientific Corp. CEO Jim Tobin, a guy who knows a thing or two about acquisitions, spoke at the Cleveland Clinic's Medical Innovation Summit Wednesday. Lazard Capital Markets LLC analyst Sean Lavin summarized Tobin's speech in a note to clients Thursday morning. First, Tobin reinforced what he and other execs have said recently: Boston Scientific is on the prowl with $2 billion in cash on hand. The downturn could present good deals for the diversified medical device maker, which is trying to dig out of the hole it created with its $27 billion takeover of Guidant Corp. in 2006.

Boston Scientific built its device empire through acquisition, but since the Guidant deal, the firm has shed several noncore product divisions and investments, often at a loss.

Tobin said Wednesday Boston would only buy "things that increase top-line growth. Small startups are generally out of luck." Boston will look for products that doctors want, he said, not interesting technology that might turn into products in the future.

He also said the dearth of IPOs -- no life sciences firm has gone public since March -- could be a death knell for venture-funded startups. "If you are a startup without the dollars to get to market, you are out of luck," he said. He also predicted unprofitable public biotechs would start running out of cash and disappearing. Read more.

Duke CEO Sees M&A For All Independent Power Firms

Nov. 12 - PEHUB - The remaining independent U.S. power producers will likely all be involved in some sort of merger or takeover activity in the next year and a half, the head of Duke Energy Corp told Reuters on Tuesday.

A hostile takeover attempt of NRG Energy Inc by Exelon Corp, and the purchase of Constellation Energy Group Inc by MidAmerican, has shaken up the industry’s view of so-called merchant power providers.

So analysts and executives now wonder who will be next in a sector that includes Mirant Corp, Dynegy Inc, Reliant Energy Inc and Calpine Corp.

While he did not name any specifically, Duke Chief Executive Jim Rogers said generally: “I think within 18 months you’ll see either consolidation or acquisition of all of them.” Read more.

Summit Partners' Mannion on PE firm write-downs

Nov. 11 - TheDeal.com - At The Deal's M&A Outlook 2009 conference Tuesday morning, Martin Mannion, a managing director at Summit Partners, spoke about the reluctance of owners to face the music when it comes to write-downs. "We have a Hobbesian choice," Mannion commented. "A lot of people aren't taking the pain. In the industry as a whole, if we took our medicine, it might be for the best.

"There's a lot of folks out there that are saying I don't have to take the pain yet because the capital structure on our deals is so stable, we can wait it out seven years," Mannion said. "Buyout guys tend to be optimistic, and sometimes they don't take their pain fast enough.

"We don't see the sellers capitulating at all," he said. "They're still not willing to come down on the prices."

Nor does he expect write-downs to be the only source of grief for private equity firms. "I think there's going to be fairly large shrinkage in our industry because a lot of firms aren't going to be raising new funds." Read more.

Banks Say `Kiss My Ring,' Choke Dealmaking: Chart of the Day

Nov. 7 (Bloomberg) -- The credit squeeze choked off the market for most debt-financed takeovers worth more than $5 billion last year. Now the smallest deals are getting killed too.

"There aren't people lending," said Paul Weisbrich, an investment banker at RSM McGladrey Inc. To even consider a loan, lenders are saying, "Kiss my ring."

The CHART OF THE DAY shows U.S. mergers since 2005 by dollar value and by number of transactions. They plummeted by value in 2007, when banks cut back the syndication of loans for multibillion-dollar deals. This year, the number of deals has plunged too, as banks reject financing for takeovers worth just $50 million, said Weisbrich, who is based in Costa Mesa, California. Read more.

Altria Lights Up Deal Financing

Nov. 6 - WSJ.com - Just as the price of cigarettes has been rising, so is the cost of financing a merger.

That is why companies not as strong as Altria Group might beware: Attempts to replicate the cigarette producer’s successful sale of $6 billion of debt to pay for its $10.4 billion acquisition of smokeless tobacco rival UST could be hazardous to their health.

That is because Altria’s underwriters, J.P. Morgan Chase, Citigroup and Goldman Sachs, priced the giant bond offering late Wednesday at a hefty six percentage points more than comparable Treasurys for each of the five-year, 10-year and 30-year tranches. Read more.

Distressed markets, low values to spur fund M&A

Nov 4 - Reuters - A U.S. asset manager shakeout looms as struggling banks line up to sell their mutual fund arms to raise capital and fund companies exit the money-market segment, hoping to cut losses.

The global financial crisis may also force companies with strong brands, such as Janus Capital Group Inc, into the hands of a private equity firm or a publicly traded rival, analysts and executives said.

"What's happening now is as part of the knock on effect of October. You are seeing a lot of firms come on to the auction block as potential rescue trades from distressed sellers," said Benjamin Phillips, research director at consulting firm Casey, Quirk & Associates LLC.

Asset managers are weathering the crisis better than banks, which have been clobbered by massive write-downs and exposure to losses in subprime mortgages that snowballed into the worst financial crisis since the 1930s. Read more.

October witnessed 'see-saw' in global M&A deals: report

Nov. 4 - Business Standard - The month of October assumed significant importance in the merger and acquisition calendar of this year as the announced M&A volume and the withdrawn deal volume hit record highs, a report says.

Global M&A volume totalled $451.5 billion in October, the largest month so far this year, up 30 per cent from September, deal-tracking firm Dealogic said in its latest report, adding that in this very month $119.8 billion worth of deals were withdrawn, the highest monthly withdrawn volume in 2008 year-to-date.

"October saw 142 deals withdrawn globally, the most of any month on record. The five most active months, based on the number of withdrawn deals on record, have all been in 2008," Felipe Pizarro, an analyst with Dealogic said. Read more.

Bankruptcy M&A Picks Up

Financial-services sector has boosted bankruptcy dealmaking, according to Thomson Reuters.

Nov 3 - Mergers Unleased - Bankruptcy M&A-related activity has increased for the first time in the last six years, according to new data from Thomson Reuters.

The number of Chapter 11 M&A purchases increased to 167 on a year-to-date basis, valued at $11.2 billion. Last year, 136 deals produced $16.9 billion of volume for the entire year. Not surprisingly, more than a third of bankruptcy activity took place in financial services with the sale of assets by New York investment bank Lehman Brothers and the $2.8 billion acquisition of Japan’s Ashikaga Bank by a consortium. Read more.

Value of tech M&A craters in third quarter

Oct 30 - The Deal.com - The total enterprise value of technology M&A deals in the third quarter plummeted to $15.3 billion, down 51% from $31 billion in the previous quarter, according to a new report from investment Updata Advisors Inc. Enterprise value as a multiple of the trailing 12 months' revenue fell 17% from the prior quarter and 12% from the year-ago period.

Deal volume in Q3 was up slightly, to 202 transactions, from the 194 deals announced in Q2. But the dealmaking environment, which was already deteriorating in July and August, fell apart in September, Updata says.

"While deals are still getting done, they are taking longer to complete as buyers are cautious yet opportunistic during an uncertain economic period," says Ira Cohen, managing partner at Updata, in a statement. "The climate tends to favor strategic versus financial buyers, as they continue to seek key acquisitions to capture market share, expand product portfolios or reach new customer segments. We're also seeing selected cross-border activity with U.S. targets." Read more.

Weill Seeks to Gain From Pain: Considers Fund to Invest in Battered Financials

Oct 23 -- Wall Street Journal -- Sanford Weill, the architect of Citigroup Inc., is considering a plan to profit from the same turmoil that has clobbered the banking giant.

Mr. Weill, who pulled off the deal that created Citigroup a decade ago and became its chairman and chief executive, is in talks about launching a private-equity fund that would invest in beaten-down financial companies and assets, according to people familiar with the matter.

Mr. Weill's potential partners are Michael Klein, who was co-head of Citigroup's investment bank until he left in July, and Michael Masin, former chief operating officer at the New York company.

Such ventures often fizzle before getting off the ground, so it isn't clear if Mr. Weill will go through with the plan. In recent weeks, though, Mr. Weill's team has reached out to potential investors, including sovereign-wealth funds, outlining their strategy and gauging interest in putting money into such a fund, people familiar with the discussions said. The tentative goal is to raise about $5 billion. Read More.

RSM EquiCo Capital Markets is Renamed McGladrey Capital Markets

Global investment bank RSM EquiCo Capital Markets LLC, one of the nation’s most successful merger and acquisition advisory firms, has changed its name to McGladrey Capital Markets LLC (www.mcgladreycm.com).

The firm’s new identity reflects its closer integration with RSM McGladrey, Inc., one of the nation’s largest providers of accounting, tax and business consulting services. Both firms are indirect subsidiaries of H&R Block, Inc. (NYSE: HRB).

Tech M&A plunges in 2nd quarter

July27 - Seeking Alpha - The technology industry may be weathering the worst of the economic storms, but tech M&A is suffering. The total enterprise value of deals in the sector in the second quarter was roughly $31 billion, down 59% from nearly $75 billion in the year-ago quarter, according to a new report from Updata Advisors. There were 194 deals in the quarter, compared with 256 transactions in the previous quarter and 263 in the year-ago period. Deal pricing is also feeling the pinch, with median multiples of enterprise value to trailing 12 months revenue falling 8% from a year ago. Read More.

Survey: M&A volume at bottom, will improve in 2nd half of '08

July 22 - Baltimore Business Journal - Middle market mergers and acquisitions professionals are frustrated with the current M&A environment. But they believe the volume of deals has bottomed out and are optimistic about the second half of 2008, according to a report released Tuesday.

In its twice-yearly survey, the Association for Corporate Growth and Thomson Reuters reported that only 43 percent of middle market M&A dealmakers believe the current M&A environment is good. That's down significantly from a year ago, when the figure was 93 percent.

Nearly half of the more than 500 investment bankers, private equity professionals, corporate development executives, lawyers, accountants and business consultants polled say the greatest obstacle to M&A activity is the weak economy, the report said. Read More.

India looks attractive despite global M&A fall: Accenture

July 21 - MoneyControl.com - According to a study by Accenture Ireland, the M&A activity has fallen off significantly. But India has managed to sail through despite the global fall. CNBC-TV18's Shreen Bhan spoke exclusively to corporate honchos from India Inc and from Accenture.

According to Peter Smyth, Lead, Accenture Ireland, there has been quite a significant fall off in the level of merger and acquistion activity. The Q1 stats for 2008 have seen a 24% drop in the value of M&A Activity, he said."We saw a fall in March 2008 of 40%, so the trend is getting much steeper," Smyth said. Read More.

U.S. Companies Eye Growth Overseas as Economic Uncertainty Lingers at Home

HSBC reports findings of inaugural survey of under-researched market segment, representing nearly $6 trillion in sales and employing 32 million -- Two-thirds (67%) of senior executives say sales abroad to grow faster than U.S. -- Nearly half (49%) intend to raise international sales targets

July 16 - MarketWatch - HSBC Bank USA, N.A. announced today the result of an inaugural survey of U.S. middle-market companies, a vital yet under-researched segment of the U.S. economy. The HSBC poll which, queried 500 senior financial executives from companies with annual sales between $20 million and $5 billion, focused on the opportunities and challenges they face when expanding into markets overseas. Read More.

China Flexes Its M&A Muscles

Julyl 15 - N.Y. Times Blog - The Olympics will give China a chance to celebrate its status as a political and economic heavyweight. The games also come as the Asian nation has been raising its profile in the deal-making business.

While the volume of mergers and acquisitions around the world was down 30 percent in the first half of the year compared with the same time in 2007, transaction volumes were actually up 5 percent in Asia, in large part because of aggressive buying by Chinese companies. Read More.

Investment Bank Calls for Congressional Action on Airline Re-Regulation

July 13 - Business Wire - A prominent investment bank with strong ties to the aerospace andairline industry is calling on Congress to increase regulation of theU.S. airline industry, arguing that a financially healthy industry iscrucial to the well being of the nation's economy.

"A strong domestic airline industry is an essential component ofour nation's overall economic health, and the sector's current woesrisk further damage to an already weak economy," said Hector J.Cuellar, president, RSM EquiCo Capital Markets, the global investmentbanking arm of RSM McGladrey and H&R Block (NYSE: HRB). "Governmentaction is long overdue. Congress must act promptly to prevent furtherindustry deterioration and the corresponding deleterious effects onthe nation."

Please click here for a more in-depth exposition of Cuellar's position on airline regulation. Read more of the release

Deregulation “clearly, definitely” a good idea: an interview with Alfred Kahn

July 9 - Evan Sparks’s Aviation Policy Blog - Looking back, was airline deregulation a good idea? “It clearly, definitely was,” Kahn said, “even though circumstances have now changed abruptly and the response of the market to changed circumstances...are in a sense wiping out henceforward many of the benefits that flowed during the past 30 years.”

Why was it so successful? The answer, he said, is that it “sparked an enormous increase in competition and air travel affordable to people from a much wider spectrum of income than before...made possible by filling seats in the previous decade that had gone empty.” Furthermore, he added, airlines are providing the service demanded: “I don’t see any evidence even now that the industry is failing to provide service that is economically viable.” Read More.

M&A Volume Down In First Half of '08

July 9 - Media Daily News - The volume of media industry mergers and acquisitions fell sharply in the first half of 2008 compared to previous years, according to the Jordan Edmiston Group, which advises investors and helps broker deals involving media properties. Between the first half of 2007 and the same period in 2008, the total dollar value of deals tracked by JEG fell 65%, from almost $65.8 billion to just under $23.2 billion. Read More.

Near-term M&A activity will slow for most U.S. mining and metals companies

Standard and Poor’s suggests that foreign, not U.S. players, will be drawn to acquire U.S. mining and metals companies due to a weak dollar, economies of scale, and a need to access the U.S.

July 9 - MineWeb - Barring a deep and prolonged U.S. recession Standard & Poor's Ratings Services expect overall domestic mining and metal credit quality "to remain relatively stable as the majority of sector participants currently maintain adequate liquidity to ride out a cycle."

However, S&P analysts forecast that long-term M&A activity will slow for domestic mining and metals companies. Read More.

The Collaborative Communications Summit Health Technology Investment Forum Brings Together Industry Leaders To Address M&A Trends and Investment Oppor

The Collaborative Communications Summit, announces an exclusive summit on deal-making for investors focused on health care technology - The Health Technology Investment Forum.

PRWEB - July 8 - The Collaborative Communications Summit, announces an exclusive summit on deal-making for investors focused on health care technology - The Health Technology Investment Forum. The full day gathering capped off with a special cocktail reception will be held on September 30, 2008, in New York City.

The Forum's President, Waco Hoover said, "The Forum will present a series of high growth potential investment opportunities and address key drivers in the health technology sector affecting M&A growth. We're very pleased to be working with major industry players, providing a unique and valuable platform that fosters deal-making and M&A activity." Read More.

Private equity businesses outperform public: study

July 9 - Reuters - Private-equity owned businesses outperform publicly owned companies in terms of earnings and valuation, a study by accounting firm Ernst & Young said on Tuesday.

The study looked at buyout firms' "exits" from the businesses they owned in 2007. Private equity firms typically hold companies for five to seven years before exiting via either a sale or an initial public offering.

Ernst & Young said the annual growth rate in enterprise value for the 100 largest global companies from which private equity exited last year was 24 percent, double the rate of public counterparts. Read More.

Private equity pours into Indian media sector

July 4 - TelevisionPoint.com (India) - Do you know that 55% stake in INX Media is held by Temasek Holdings, New Silk Route Partners, New Vernon Private Equity Fund and Employee sweat equity.

Do you also know that the shareholding pattern of NDTV Networks includes Lehman Brothers, Goldman Sachs, CSFB and eight others, who jointly hold as much as 24% stake in it.

The Indian Media and Entertainment sector has never been a hot cake among PE investors. But of PE firms are showing great interest in the sector. Blackstone's 26% stake in Ushodaya Enterprise for $ 146 million, Chrys Capital's 27% stake in Hathway cable for $ 120 million, Shyam Equities' 20% stake in Independent News Service, holding company of India TV for $ 25 million are few examples. Read More.

Media M&A deal value declines 65% in first half

July 1 - BtoB Marketing - Total deal value for M&A media transactions plunged to $23.2 billion in the first half, down 64.7% from $65.8 billion in the first half of 2007, according to Jordan Edmiston Group.

However, despite economic pressures, deal activity actually increased in the first half, with 404 M&A media transactions completed during the period, compared with 397 in the first half of last year.

The largest decline was seen in deals valued at more than $1 billion, with only four transactions with a combined value of $9.6 billion completed in the first half, down from 11 deals worth a combined $46.3 billion in the first half of last year. Read More.

Can a return to regulation fix the U.S. airlines?

July 2 - St. Petersburg Times - The wall-sized mural Final Boarding Call at Tampa International makes you nostalgic for the golden days of aviation.

There's the couple's tearful embrace at planeside (no screening lines!). A baggage handler pushing his cart in a sparkling white jumpsuit. A passenger waving while climbing down the plane's rear steps to the tarmac.

You can't blame travelers who pine for a simpler, more civilized flying experience. Some politicians and airline veterans, however, are looking into the past to pluck out a solution to today's airline mess: a return to government regulation. Read More.

Alternative Energy M&A Trends - June 2008 (Report)

From Research & Markets.com:

Summary - Alternative Energy M&A Trends June 2008 Report is an excellent source providing detailed information on M&A, Equity/Debt Offerings, Private Equity, Venture Financing and Partnership transactions in the Alternative Energy industry. The report also provides detailed comparative data on the number of deals and their value in the last six months subdivided by sector and geography.

Scope

• Comprehensive summary of Alternative Energy deals globally in the last six months
• Trend analysis of deals by sector and type
• Information on rumored and upcoming deals before they occur- Summaries of the most important deals Purchase report.

Re-regulation for airline industry pitched

June 30 - Rocky Mount Telegram - No denying it: Combine astronomical jet fuel prices with a weak economy, and the U.S. airline industry faces severe financial challenges.

But does it lose its viability as a market-based enterprise? Some say yes and are calling for a return of regulation. The airline industry has been deregulated since 1978, a move that led to the rise of a number of low-cost carriers, heavy competition, low fares and more choices for consumers.

Deregulation also has made it more difficult for many airlines to survive.

One of the most prominent people calling for re-regulation is former American Airlines chief executive Robert Crandall. Read More.

The Case for Re-Regulating The Airline Industry

June 12 - Wired (Blog) - No one would accuse Bob Crandall of being shy. The legendary former CEO of American Airlines, who is widely credited with developing the hub-and-spoke system and inventing the frequent flier program, always speaks his mind. And the aviation world is abuzz with what he's been saying lately.

Crandall considers the deregulation of commercial aviation a huge failure and says it's time to bring back government oversight of fares and pricing. "It's time to acknowledge that airlines are more like utilities than ordinary businesses," he said during a speech at the Wings Club, a cushy meeting spot for the industry's heaviest hitters. "We have failed to confront the reality that unfettered competition just doesn't work very well in certain industries, as aptly demonstrated by our airline experience." Read More.

U.S. M&A slumps, but strategic deals help fill void

June 27 - Reuters (U.K.) - Merger activity in the United States dropped 29 percent in the second quarter, faring better than the 40 percent global slump, as corporations filled the void left by buyout firms and targeted big consumer brands such as Anheuser-Busch Cos Inc. and Wm. Wrigley Jr Co.

"Strategic buyers see an opportunity here due to the absence of the financial buyers. For the last 24 months, prior to the downturn, strategic buyers were getting outbid by financial buyers. That's not happening now," said Bob Filek, a partner with PricewaterhouseCoopers' transaction services.

During the first half of the year, private equity deal volume dropped 85 percent in the U.S. and 76 percent globally, according to Thomson Reuters data released on Friday. Read More.

Would a return to regulation be good for airlines?

Difficult market has industry looking for solutions

June 27 - Atlanta Journal Constitution - No denying it: Combine astronomical jet fuel prices with a weak economy, and the U.S. airline industry faces severe financial challenges.

But does it lose its viability as a market-based enterprise? Some say yes and are calling for a return of regulation. The airline industry has been deregulated since 1978, a move that led to the rise of a number of low-cost carriers, heavy competition, low fares and more choices for consumers.

Deregulation also has made it more difficult for many airlines to survive.

One of the most prominent people calling for re-regulation is former American Airlines Chief Executive Robert Crandall. Read More.

Indian firms are mature to handle M&As now

June 29 - The Economic Times (India) - It’s raining deals for India Inc. Put aside the global recession, Indian companies are not only looking to tap opportunities offshore but are also being seen as a lucrative asset by foreign companies. The emerging-market M&A activity in 2008 so far is up 17% over last year at this time, at $218 billion, while for the rest of the world it is down 43%, at $991 billion. But all is not well, feels Abhey Yograj, chairman and MD, Tecnova. In the last two decades, his company has helped over 280 global organisations make their Indian foray by providing cross-border acquisitions, workable strategy solutions and implementation assistance. He explains the challenges ahead in the M&A segment. Read More.

More mergers seen in U.S. defense space

June 25 - Reuters (U.K.) - Italian defense manufacturer Finmeccanica SpA's recent $4 billion acquisition of U.S. defense company DRS Technologies Inc was a big one, but it is not the last one.

More European defense manufacturers looking to gain a presence in the U.S. defense market -- the world's largest -- will likely be targeting U.S. defense suppliers.

Increasing acquisition activity is also expected within the domestic defense sector as suppliers consolidate to become one- stop shops for manufacturers such as Boeing Co, Lockheed Martin Corp and Northrop Grumman Corp. Read More.

Major turbulence ahead for airlines

Industry officials and analysts urge Washington to act to avert a collapse

June 26 - Christian Science Monitor - America's aviation system could be at risk of collapsing by the beginning of next year.

That warning from aviation experts has prompted some industry leaders to call for re-regulation, something considered almost heresy until now. Others are urging Washington to do more to rein in the oil speculators pushing up fuel costs.

But there is agreement among airline officials and analysts that Washington and the two presidential candidates need to recognize the severity of the crisis and take some action now to avert an economically crippling collapse in the near future. Read More.

Now may be a good time to think of M&A

June 25 - FT.com (U.K.) - Now might not seem the best of times to be thinking about mergers and acquisitions. In a slowing economy where the full effects of the credit crisis have yet to be felt, most executives will probably feel they have other things to worry about than adding to their empires.

Yet in retrospect, 2008 may turn out to be the best period for deals for some time to come.

Conventional wisdom suggests the opposite. In an uncertain market, companies have a hard enough time predicting their own performance, let alone that of potential takeover targets. Read More.

Survey: most U.S. and Canadian oil execs foresee increase in M&A activity

June 23 - The Canadian Press - Merger and acquisition activity is expected to heat up across oilpatch, a survey by a Calgary law firm suggests.

Blake, Cassels & Graydon LLP asked 100 executives and financial advisers in the oil and gas industry about trends they expect to see over the next year. The survey suggests 60 per cent of U.S. and Canadian respondents expect the total volume of merger and acquisitions to increase.

The sentiment was stronger among Canadians surveyed, with 70 per cent saying they agreed with that view. Read More.

Middle-market firms pack punch, study shows

June 23 - Indianapolis Business Journal - Mid-sized companies are a lot like middle children in a family, a new Indiana Chamber of Commerce study has found. They tend to achieve a lot, but don't get the attention they deserve.

The businesses amount to only 3 percent of all businesses in the state, yet generate 30 percent of the jobs and more than 40 percent of the sales, the study found. Indiana has 3,789 companies fitting the mid-size description of $5 million to $100 million in annual sales.

The Chamber believes it can boost their prospects by spotlighting the enormous role they quietly play in the state's economy.

"We wanted to determine what we could do to focus light on these companies," said Chamber Senior Vice President Mark Lawrance. Read More.

Private equity Asia – the market today

June 23 - FinanceAsia.com - Asia has been an area of focus for a number of global and local private equity players for many years. The credit crunch has prompted an even larger number of financial sponsors from the US and Europe, and the advisers who look to work with them, to ramp up their Asian presence and make it a key market for their business. Of course, simply increasing presence and capital available in Asia will not be enough for private equity players to succeed in the region.

Asia continues to present some formidable challenges to private equity investment. While these vary from country to country, generally speaking they include a combination of cultural, commercial and regulatory factors that get in the way of successfully investing and successfully exiting in a time honoured fashion. In many markets, and in particular in the two markets which dominate Asian investing - China and India - this means that even the basic LBO deal model that has served private equity so well in the US and Europe often cannot be used. Having said that, certain innovative (and highly structured) solutions have been developed to overcome this issue in India. Read More.

Wall Street Beat: Small M&A Deals Flourish

June 19 - PC World - While the overall value of mergers and acquisitions in the tech sector will likely decline this year, this week illustrates how strategic, and sometimes smaller, deals are still important for the sector, as BMC, SAP, Fortinet and Microsoft announced deals.

This year has seen its share of big deals as well. Some of the bigger and more interesting deals include: Hewlett-Packard buying computer services firm EDS for US$13.9 billion, Sprint and Clearwire forming a joint venture worth $14.5 billion, Verizon Wireless' $28 billion acquisition of Alltel and CBS' $1.8 billion buy of online media company CNET Networks. Read More.

Corporate acquirers line up for M&A buffet

Deal volume rises, multiples fall, morsels abound

June 16 - Financial Week - Dealmakers say this is the best corporate mergers and acquisitions market they've seen in years, now that the buyout boom is over and deal prices are starting to inch down.

“It is the year of the re-emergence of the strategic buyer,” said Howard Lanser, director at investment bank Robert W. Baird. “When the economy slows, the strong companies with strong balance sheets are at an advantage in terms of being able to pursue strategic acquisitions.”

Corporate buyers have been especially busy chasing companies worth less than $1 billion, which this year have fetched, on average, multiples of 11.1 times trailing earnings before interest, taxes, depreciation and amortization, according to data from Robert W. Baird. That is down from 11.4 times EBITDA such companies were selling for in 2007. A seemingly slight decline, but significant because it indicates prices are starting to dip after rising in 2006 and 2007. Read More.

Research shows 2008 may be the best year for M&A

June 17 - Innovatives Report (Germany) - Results from the latest stage the of ongoing Towers Perrin/Cass Business School research looking at the value created in the last three global M&A cycles reveals that, contrary to received wisdom, 2008 may be the best time to do a deal.

This most recent part of the study looked at the performance of companies before and after peak years of the cycles. Together with Towers Perrin, Scott Moeller, Professor of Mergers and Acquisitions at Cass, examined the two prior merger waves and found the post-peak years (1990 and 2000) delivered higher shareholder value compared with deals in the frenzy of the M&A booms. This was true for all deals, although the research focused on those between $400 million and $1.5 billion in size (adjusted for inflation).

Combining the two waves gives a clear and statistically significant picture of performance in pre-peak, peak and post-peak years. The post peak years show the performance outperformed the MSCI World Index by 5.4% on average over the two periods. Read More.

M&A Activity Down but Not Out: Strong Cross-Border Deal Environment, Middle Market and Corporate Deal Activity and Robust Sectors Bolster M&A Market

June 16 - PRNewswire - With approximately US$1 trillion in global deal volume recorded during the first 19 weeks of 2008 vs. US$1.4 trillion during the same time last year, total transaction volume so far in 2008 has fallen below the record highs of 2007. However, merger and acquisition activity is expected to stabilize throughout the remainder of 2008 and the first half of 2009, according to Ernst & Young LLP's Transaction Advisory Services group.

"PE firms and corporations still remain armed with tremendous arsenals of cash to conduct transactions once the lending environment is restored,"said John O'Neill, Ernst & Young's Americas Director of Private Equity. "Once the overhang from the credit crunch is gone and lenders return to the transactions table and sellers adjust to more rational price expectations, we expect to see this cash funneled directly into the deal market." Read More.

Analytics to see rise in M&A activities

June 16 - Business Standard (India) - Market research and analytics, a relatively new entrant into the knowledge process outsourcing industry, is expected to witness a spate of mergers and acquisitions in the coming days.

The M&A activity in the area will see companies acquiring small and niche players in the US and Europe to improve their front-end capabilities and consolidation in the domestic market, largely dominated by over 110 small-size companies in the revenue bracket of $2-$10 million. Read More.

Rule Makes Execs Think Twice About Dealmaking

A Deloite survey says FASB's new merger rule will put the kibosh on transactions that until recently would have gone forward.

As always, acquiring companies value the target company's assets and liabilities, identifiable intangible assets, and some previously unrecognized contingencies at fair value at the time of the sale. But under the new measurement system, unobservable assets and liabilities, such as contingent liabilities that are measured using estimates, must be valued on what the company believes a hypothetical third party would pay for them, rather than rely on in-house models. "The most difficult part of implementing FAS 141(R) is coming to grips with fair-value principles that were never required before," Jay Hanson of McGladrey & Pullen told CFO.com in an earlier interview.

For example, Hanson opined on potential problems related to the way companies record merger-and-acquisition transactions in which the acquiring company buys less than 100 percent of a target company. Read More.

IT is Critical Success Factor in Mergers & Acquisitions

June 11 - Despite their ongoing popularity, many mergers and acquisitions still fail to meet projected benefits. Enterprise software rigidity is often a major reason for disappointing post-merger results. This is completely unnecessary, according to Agresso, the ERP market's definition of agility.

The global buyout frenzy reached an unprecedented peak in 2007 as the total deal value topped at U.S. $4.83 trillion globally, an increase of 27% from 2006 when the previous record was set (source: Dealogic). Despite that, the success rate of those buyouts remains alarming. For example, a 2007 study from Hay Group revealed that over 90% of European corporate mergers and acquisitions fall short of their objectives. Read More.

Middle market deals prove resilient

June 12 - Financial News (U.K.) - Two private equity transactions announced Tuesday and Wednesday demonstrate the continued resilience of the middle market this year as larger deals struggle to gain traction in the wake of the credit crunch. Read More (subscription required)

Mining Replaces Financial Services as Biggest Driver of M&A

June 12 - Bloomberg - Metals are the new green on Wall Street, as mining has displaced financial services to become the biggest source of mergers and acquisitions.

The value of announced mining takeovers more than tripled to $199 billion in the first five months of 2008 from a year ago, even as the global pace of M&A dropped 37 percent, data compiled by Bloomberg show. Financial-services companies, the largest driver of merger fees for the past two years, disclosed $173.5 billion of transactions in the first five months. It's the first time mining mergers have topped the M&A table since Bloomberg began compiling the data in 1998.

"We have moved into the age of commodities," said Carl Hughes, a London-based partner at Deloitte & Touche LLP, who oversees the firm's energy and resources practice. "You clearly have a large number of mining companies just generating cash and profit like there is no tomorrow." Read More.

What to make of this frenzy of energy deals?

June 11 - Corporate Dealmaker Blog (The Deal) - "Duane was in the hot tub, shooting at his new dog house with a .44 Magnum."

That's how Larry McMurtry began "Texasville," his 1987 sequel to "The Last Picture Show." Having gotten rich in the energy boom of the early 1980s, Duane Moore opens this novel teetering on the brink of bankruptcy amidst the subsequent bust.

A couple of items in Wednesday's news bring Duane to mind. One is the acquisition of Hunt Petroleum Corp. by XTO Energy Inc. for $2.6 billion in cash plus $1.6 billion worth of XTO's hot stock. This is XTO's third deal since April, and CEO Bob Simpson says he expects to do another $1 billion to $1.5 billion worth of deals this year. He's not the only one; energy deals are surging right along with energy prices. Read More.

Marketplace trends focus of symposium

June 8 - Green Bay Press Gazette - I just got back from the 2008 Midwest Business Brokers and Intermediaries annual symposium for lower-middle market mergers and acquisitions companies. More than 80 professionals attended the event in Milwaukee.

We heard from lenders, private equity groups and business intermediaries and discussed trends in the marketplace. Here is what I've seen, and what I learned:

• Lending has tightened, no surprise there, but not across the board. For lower-middle market deals, those with revenues between $1 million and $30 million, the lenders were clear: "We have money to lend." Read More.

Mega-buyouts won't be back for years, says Carlyle's Rubenstein

The hang-up? Banks are still stuck with loans, institutional buyers are still spooked

June 4 - Financial Week - The age of the mega-buyout isn’t over, but it may take a number of years for it to return, the head of one of the world’s top leveraged buyout firms firms said on Wednesday.

David Rubenstein, co-founder of the $81 billion Carlyle Group, said a resurgence of large buyout activity of the kind that occurred in recent years is contingent on banks selling inventories of loans used to finance previous deals. Read More.

Credit crisis may spark more M&As in China

June 6 - China Daily - The global credit crisis could actually increase the volume of M&A deals in Asia's financial sector and China is likely to be the most active area this year, according to a recent report.

The findings are based on a survey of 281 senior executives working in Asian financial institutions. The Economist Intelligence Unit, on behalf of PricewaterhouseCoopers, conducted the survey in March 2008, marking PwC's third report on financial services M&A.

According to the findings, although the credit crunch has led to market volatility and put a halt on larger financial service deals in the first quarter of 2008 throughout Asia, 44 percent of respondents believed that the credit crisis could actually increase the volume of M&A deals in Asia. Read More.

Wall Street Beat: M&A Stirs Tech as Share Prices Rise

June 5 - PC World - Good news about the U.S. economy gave a boost to the tech sector this week, but mergers and acquisitions news including Verizon Wireless' US$28 billion acquisition of Alltel also helped pique IT investor interest.

With its Alltel buy, Verizon leapfrogs AT&T into first place in the U.S. mobile market. Verizon said the acquisition will give users access to an expanded range of products and services. But essentially, Verizon is buying its way to a bigger customer base. As more people acquire mobile phones, it gets harder for service providers to find new customers without getting them to switch from other providers.

For this reason, M&A in the mobile market is probably far from over. Read More.

Convergence of Accounting Standards May Slow M&A Activity

June 3 - Seeking Alpha - Efforts to reconcile US and international accounting standards could contribute to a significant slowing of merger and acquisition activity, according to Deloitte.

When more than 1,850 executives were asked about the impact of Financial Accounting Standards Board Statement No. 141 [R], Business Combinations, 40 percent said that the revised standard would cause them to rethink deal strategy and/or impact planned deal activity, according to an online poll from Deloitte.

Statement 141 [R] is the first substantially converged accounting standard by the FASB and the International Accounting Standards Board. The rule will change how companies approach financial planning and reporting around mergers, acquisitions and ownership changes. Statement 141 [R] is effective for companies with fiscal years beginning after December 15, 2008. Read More.

A New Direction in Energy M&A

June 3 - The Motley Fool - When it comes to onshore drilling for oil and especially natural gas, directional is the new vertical.

Now that the industry is targeting shale plays like the natural gas-bearing Marcellus and the oil-bearing Bakken, players such as Devon Energy, Chespeake Energy, and XTO Energy all have to send their drillbits sideways to hit more "pay."

This is a major boon for drillers like Precision Drilling Trust, whose rigs are able to perform this more demanding directional activity. Another beneficiary of the trend is W-H Energy Services, whose PathFinder subsidiary provides both the personnel and the equipment to hit those hard-to-reach reservoirs. Read More.

Why the Credit Crunch Should Help Corporate M&A

May 28 - Knowledge@Wharton - Credit market turmoil is altering the global playing field in buyouts and acquisitions, a field rife with complaints in recent years about too much money chasing too few good deals. The credit shortage puts pressure on pricing and transactional quality, while also giving public companies a better shot at acquisitions that the more aggressive private equity firms might previously have snatched away.

These are some practical implications of a paper presented at a recent Wharton conference sponsored by the Weiss Center for International Financial Research whose theme was "A Global Perspective on Alternative Investments." The paper, titled "Leverage and Pricing in Buyouts: An Empirical Analysis," documents the pricing anomalies that have characterized private equity transactions in recent years. Chief among them: The greater the leverage applied to a deal, the greater the price it has tended to command. Read More. (subscription required)

Will M&A Die Under Obama or Clinton?

May 29 - Deal Journal Blog (WSJ) - While Barack Obama predicts his own victory in the Democratic presidential primaries as of June 3, deal makers fret about whether a Democratic administration would mean never being able to do a big M&A deal again.

US Airways and United Airlines, for instance, said today that they are pedaling as fast as they can to get a deal done before the Bush administration leaves. Are their fears justified?

If you go by the rhetoric, yes. Read More.

Private Capital Symposium: DLJ's Rattner on creating value

May 28 - DealScape Blog (The Deal) - At The Deal's Fifth Annual Private Capital Symposium Steven Rattner, managing director of DLJ Merchant Banking Partners, explained why it is easier to create value in middle market companies.

There is a difference in creating value from middle market deals to large cap deals, he said. "When you buy a 20 billion market cap company. Those companies have their own languages and religions...In today's type of market's where it is about creating value in the companies you own, it is easier to create that value in middle market companies," Rattner explained. Watch the video.

Report: M&A seen strong among private companies

May 23 - Corp DealMaker Blog (The Deal) - The folks over at Grant Thornton International Ltd. put together an international business report, entitled titled Mergers and acquisitions: Opportunities for global growth. The report confirms what we've been hearing for months: that the recent tightening of lending policy and an uncertain economic outlook has had an impact on transactions worldwide at the top end of the market.

But they also found that privately held businesses in the BRIC economies, North America, mainland Europe, the U.K. and Ireland, and the rest of the world are confident about their prospects for M&A over the next three years. Privately held businesses in China were the most bullish, with 67% predicting deal activity over the next three years, followed by Brazil at 64%. Forty-eight percent of private U.S. businesses expect to do deals in the time period. Read complete report.

After the Deluge: A Good Time to Buy?

May 19 - DealBook blog (N.Y. Times) - Ever since the end of the buyout boom last summer, many pundits and financial players argued that the mergers and acquisitions game didn’t have to end. Strategic players could step into the void, buoyed by their voluminous cash holdings and unhindered by competing private equity firms.

Now a new study, conducted by the consulting firm Towers Perrin and the Cass Business School in London, that will be released Tuesday has found that doing deals in the “post-peak” period could yield mergers that created a significant amount of value. That would mean, well, this year.

The study examined 38,122 deals, seeking to compare the M&A cycles of the late 1980s and the late 1990s to today. Among the findings gleaned from the data was that deals struck in the post-peak years of those previous cycles, 1990 and 2000, created more value for shareholders, especially compared to mergers struck at frothy heights only a year before. Read More.

M&A Deals in the Industrial Manufacturing Sector Drop

Deals declines 46% from first quarter of 2007

May 21 - IndustryWeek - A total of 39 deals (disclosed value at or above $50 million) were announced in the first quarter of 2008, a 17% decline from the 47 deals announced in the first quarter of 2007, according to PricewaterhouseCoopers. Total deal value for industrial manufacturing transactions totaled $7 billion, a 46% decline from the $13 billion announced in the first quarter of 2007 and a 78% decline from the $31 billion announced in the first quarter of 2006. At this rate, projected total deal value for 2008 is set to fall far short of the levels set in 2007 ($88 billion) and 2006 ($92 billion). Read More.

The changing M&A game

May 20 - Financial Post (Canada) - Despite the slowdown in M&A activity, we are not at the beginning of a steep downturn in global dealmaking, according to a new report. However, the landscape has changed dramatically.

Relatively calmer financial markets have coincided with a surge of activity in recent weeks: Mars Inc’s US$23-billion purchase of Wrigley Co. to create the world’s largest confectionary company; Westpac Banking Corp. Ltd.’s US$17.6-billion bid for St George Bank in Australia; and Hewlett- Packard Co.’s decision to acquire Electronic Data Systems Corp. for US$14-billion. But despite the expected recovery for M&A, it will not look like 2006 or 2007, Citigroup’s global equity strategy team said in a report. Read More.

Study says M&A in 2008 could produce good value

The credit crunch has pounded the merger and acquisitions business this year as the volume of deals has slowed, but a new study suggests that that the deals that do get done this year will likely produce better returns that ones done in previous years.

May 20 - MarketWatch - The study from Towers Perrin and London's Cass Business School analyzes three recent multi-year M&A cycles. It concludes that deals done in the year immediately following the peak year of an M&A cycle produce better returns than those done during the upswing and the peak year.

"This latest research shows that, on average, and based on the last two merger waves, deals done in the year following the peak create more shareholder value than those completed during the upswing and peak years of the wave. It appears that 2007 was the peak year of the current merger wave," said Mark Arian, the co-leader of Towers Perrin's global M&A consulting practice. Read More.

Transportation/logistics M&A not on track to match 2007 levels

May 16 - Stockhouse - Both deal volume and value in the transportation and logistics industry declined during the first quarter of 2008, according to the PricewaterhouseCoopers LLP Q1 2008 edition of Intersections: Global Transportation & Logistics Mergers and Acquisitions Analysis. Global deal activity is not on track to match the levels seen in 2007; however, the 45 deals (worth at least $50 million each) announced in the first quarter is on track to exceed 2006 levels.The credit markets and slowing deal activity in the United States significantly affected deal volume in the first quarter of the year. When excluding deals in which a U.S. entity was the acquirer or target, the number of deals (38 deals) is on pace to exceed both 2006 and 2007 levels (119 and 142 deals respectively), indicating that a concern over an economic slowdown in the United States may be lowering the attractiveness of U.S. targets - as well as the willingness and ability of U.S. acquirers - to make deals, according to the PwC analysis. Read More.

Market Outlook: Composites in General Aviation

One assumption is that aircraft construction is a boom/bust market. But current order backlogs and resulting ramp-ups in production rates indicate that civil aircraft manufacturers are looking ahead with a great deal of confidence. Expected long-term growth in Asian and other developing economies accounts for a large proportion of the recently placed aircraft orders. As a result, many manufacturers already have backlogs amounting to several years of production for popular models. While some observers argue that the aircraft industry, as a result, has entered a “super cycle” or “a bubble,” investment banking advisor Trevor Bohn takes a slightly different view. A vice president at RSM EquiCo Capital Markets, Bohn said at COMPOSITESWORLD Conferences’ 2008 Composites Industry Investment Forum held in February that he preferred to describe the market as “stronger for longer.” With the growing number of aircraft orders and a resulting build up in aircraft delivery backlogs, the market for composite aerostructures in general aviation has been growing rapidly. According to the General Aviation Manufacturers Assn.’s recently released 2007 year-end statistics, the industry grew 16.5 percent to a record $21.9 billion in aircraft shipments, compared to 2006. Read More.

M&A Deal Activity in Industrial Products Slows

May 14 - Modern Distribution Management - Weakness in the U.S. economy continues to affect M&A deal activity and value in the industrial products sectors, specifically industrial manufacturing, chemicals, and metals, according to a series of PricewaterhouseCoopers LLP first quarter M&A reports. While deal activity remains steady, deal volume and value is not on pace to exceed 2007 levels; however, the number of deals announced during the quarter is on track to meet or exceed 2006 levels.

The slowdown in the pace of large deals announced in the first quarter is a direct reflection of the difficult financing environment. Only the transportation & logistics sector is on pace to exceed the level of large deals in both 2006 and 2007. Deal interest for targets in Asia has been particularly strong during the quarter across each subsector. Additionally, the weak U.S. dollar is driving the increased interest in U.S. targets by cross-border acquirers. Read More.

India's Global M&A Boom

Indian corporations, established at home and seeking new markets, are flush with cash and spending it abroad. But have they gone overboard?

Bharti Airtel, India's largest telecom player, is in the midst of talks to acquire a 51% stake in South African telecom major MTN in a deal that could be worth $20 billion. It's unclear whether Bharti's bid will succeed, but plenty of other Indian companies have been on a global shopping spree. On May 1, Essar Steel Holdings announced its third overseas acquisition in a year—the Nasdaq-listed Esmark for $1.1 billion. In March, Tata Motors acquired Jaguar and Land Rover from Ford. And investment bankers say there are 10 more acquisitions by Indian companies in the pipeline over the next six months. Read More.

Prices hold firm for government M&A deals

May 12 - Washington Technology - Since 2004, the price-to-performance multiples of publicly traded government technology services companies have trended downward, while the valuations of mergers and acquisitions have held their ground. Is this an anomaly, a reflection of the — until recently — easy money market conditions, or are there other factors at work? Just as important, is it rational, sustainable and likely to continue through this year and the next?

Although these questions were raised in 2007, the credit market turmoil in the past six months has prompted renewed examination of expected trends in transaction volumes and pricing levels. The impact of equity prices and debt market trends is not uniform. Read More.

M&A Lessons Learned

Supply chain management is the key to realizing merger and acquisition synergy savings

May 13 - Supply Chain & Demand - Oftentimes the motivations for a merger and/or acquisition are the savings and cost synergies that can be generated from the increased scale and overlapping operations of the combined companies. These synergies generally come from two areas: internal headcount and external vendor spend. Due to the supply chain management organization's focus on optimizing vendor relationships and internal spend patterns to reduce costs and increase productivity, SCM is well-positioned to lead the external vendor spend effort with a structured synergy capture program to maximize savings.

Embarking on a merger or acquisition without a strategy or, better yet, a formal program to realize the potential synergies as effectively and efficiently as possible can ultimately lead to failure. Because the synergies are crucial to the future viability of the combined company, the respective SCM organizations should have a leading role in identifying the synergy savings required for the merger or acquisition to succeed. Read More.

India comes of age in M&A, but not always smooth

May 9 - Reuters - Bharti Airtel's overtures towards South African telco MTN Group, which could lead to India's biggest foreign takeover, are a sign that big Indian firms are hungry for deals and undaunted by a global credit crisis that has dented M&A activity around the world.

While Bharti shares have been hit as analysts query the mobile firm's ability to fund a deal that could top $20 billion, few doubt there will be more acquisitions by increasingly outward-looking Indian firms.

"Indian corporates have come of age," said Pramit Jhaveri, head of investment banking at Citi India, which advised Tata Motors on its $2.3 billion buy of Ford Motor's Jaguar and Land Rover brands in March. Read More.

The State of Medtech M&A

Prolific mergers and acquisitions activity in 2007 yields to a more uncertain climate in 2008.

The year 2007 ended amid uncertain economic conditions, precipitated by the subprime and structured-loan debacles. The tightening credit situation will affect leveraged transactions such as private equity deals most immediately, as lenders and principals will require a higher burden of proof before permitting a deal to move forward. But the impact of the credit squeeze will extend well beyond private equity deals to affect the overall interconnected world economy. Although the aphorism that healthcare is recession-proof still applies, prospects for a particular sector, company, or deal must be evaluated according to their specific circumstances.

In general, 2007 mergers and acquisitions activity in the diagnostics and medical device industries reflected complementary moves in which acquirers sought businesses that dovetail with their core product lines and infrastructure, as opposed to acquisitions driven by the need for diversification. Many acquirers looked to purchase platforms, technologies, and organizations that address markets expected to grow significantly in the future. Particularly hot sectors include diagnostics, orthopedics, spinal and cardiovascular products, and home-care devices, among others. Read More.

Health-Care M&A: Private Equity Taking Its Medicine

May 7 - Deal Journal Blog (WSJ) - Can private-equity money help cure the ills of the pharmaceutical industry?

The ancient Greek word “pharmakon” referred both to the illness and its cure, and that duality captures the dilemma the pharmaceutical industry is confronting now: Many companies are facing a host of patent expirations on cash-cow, brand-name drugs at the same time that the pipeline of new blockbuster drugs has dried up. That means the industry needs money to reinvest into drug development.

One way to raise that money is by divesting businesses that aren’t core. And lo and behold, private-equity firms that can’t find the debt to make giant acquisitions are very willing to pop some of these smaller pills. Read More.

Private equity dealmakers still alive and well

Smaller deals, amassing cash part of the new landscape

May 7 - TwinCities.com - Just because private equity firms haven't had any big deals to talk about lately doesn't mean they've gone away.

In fact, two of the Twin Cities' biggest private equity firms, Goldner Hawn and Norwest Equity Partners, say they expect to raise about $1.5 billion for two new equity funds by the end of the year. Norwest Equity Partners also is putting together a $500 million mezzanine fund.

And executives of the firms say they are itching to spend that money, even if some of the rules of the game have changed. Read More.

Carlyle Group's David Rubenstein: 'The Greatest Period for Private Equity Is Probably Ahead of Us'

May 6 - Knowledge@Wharton - David Rubenstein is co-founder and managing director of The Carlyle Group, the Washington, D.C.-based private equity firm with more than $70 billion in assets under management. In March, members of the Wharton Private Equity Club interviewed Rubenstein about the ongoing credit crisis, the industry outlook, the rise of sovereign wealth funds, and why private equity is "one of the greatest exports of the United States." An edited version of the conversation appears below. Read Q&A. (Subscription required)

Video: Middle-market matters

May 5 - DealScape Blog - Today, the middle market is a robust, fertile area of dealmaking in a veritable desert of megadeals. A year earlier, before the credit crunch pinched the ability of buyout firms to execute deals over $1 billion, a panel at The Deal's 2007 Private Capital Symposium discussed how most firms had abandoned the middle market to niche players.

Now that the credit crunch has put a stop to the parade of megabuyouts, the middle market is once again a key target area for deep-pocketed financial buyers looking to escape the worst of a tight debt market. At The Deal's Fifth Annual Private Capital Symposium on May 14, the climate for deals in the middle market will be the subject of a panel discussion. With the effects of tight credit starting to spill into midmarket deals, the panelists will consider the current climate, as well as key issues such as where the credit crunch is biting hardest and how middle-market lenders are reacting to the contraction of the debt markets. Read More and Watch Video.

Cement industry to witness dip in M&A valuation

May 5 - The Financial Express (India) - India's cement industry, that is currently undergoing a consolidation and market leadership phase, will now witness a fall in the valuations of M&A deals. With cash flows at an all time high and capacity utilisation bursting at the seams, the cement industry, that has witnessed transactions happening at higher valuations, will now see a dip of 15% to 20% in M&A valuations going forward, say experts.

Says Sourav Mallik, associate director- investment banking at Kotak, "The cement industry is witnessing a fall in earnings and valuations. More M&As in the sector will now be driven by a strategic desire to exit rather than a financial compulsion to restructure." Read More.

Private Equity Gets Buzzed on Winery Investments

May 2 - Deal Journal Blog (WSJ) - LBO Wire reporter and Deal Journal contributor Matthew Monks files this sideways look at private equity firms’ interest in wine.

Private-equity firms are pursuing an insouciant investing interest, with a hint of earthiness.

They’re looking at wineries. Over the past month, at least two buyout firms have raised money to invest in family-owned wineries. Vinum Capital, of San Anselmo, Calif., is raising a $250 million fund to acquire as many as 10 wineries on the West Coast. San Francisco firm Bacchus Capital Management LLC is also sitting on an undisclosed amount of capital that “is ready to make investments,” in wineries, it said. Read More.

Citi loses India head of M&A to Carlyle

Citi's head of M&A in India, Devinjit Singh, quits after nearly 20 years with the bank to join Carlyle's buyout practice.

May 2 - FinanceAsia.com - Citi India veteran Devinjit Singh, who currently heads the M&A business at the investment bank, is moving to the buy-side to join Carlyle's buyout practice. Singh, who has been a managing director at Citi since 2007, joins Carlyle at the same level and will report to Rajeev Gupta, who is the head of Carlyle's buyout business in India. Gupta is himself a former investment banker and joined Carlyle in 2005 from DSP Merrill Lynch where he was head of investment banking. Carlyle also has a growth capital practice in India.

Carlyle currently has two buyout funds in Asia – Carlyle Asia Partners I and II with $750 million and $1.8 billion under management respectively. The private equity firm was in the market earlier this year to raise its third fund, Carlyle Asia Partners III. Read More.

M&A Slowdown Hits the Middle Market

May 1 - DealBook blog (N.Y. Times) - Everyone knows that the pace of mergers has slowed down dramatically since the onset of the credit squeeze. With a few notable exceptions here and there, mega-deals in particular seem to have disappeared.

But what about the middle market, where the majority of transactions take place? Many believed that, especially for private equity firms, that landscape would be shaken up a bit — but not by nearly as much as that for big deals. According to data from Robert W. Baird & Company, a middle-market investment bank, that’s only somewhat true.

In March, there were a total of 211 announced middle-market deals, defined by Baird as those valued under $1 billion. That’s a 36.1 percent drop from March 2007, and 35 percent below the average for each of the last 12 months. Read More.

Private-Equity Firms Active In Less-Splashy Deals

April 29 - CNN Money - Apollo Advisors has invested $4 billion of equity since last October but the leveraged buyout climate won't return to a semblance of normality until sellers of companies lower their prices to reflect economic reality, Apollo's founding partner said Tuesday.

"Credit has to work its way through the system and prices have to come down," said Leon Black at a panel on the state of the private-equity industry at a conference in Beverly Hills sponsored by the Milken conference.

Banks are beginning to clear up their backlog of past leveraged buyout loans and are slowly beginning to lend for middle-sized deals but asking prices have barely budged, he and others on the panel said. Read More.

Companies Are Proposing Mergers Again. Be Afraid

April 30 - Deal Journal Blog (WSJ) - The good news: companies are negotiating mergers again. The bad news: these so-called strategic buyers don’t always seem to be acting very strategically.

Consider the Deal Journal’s “Say What?” deal of the day: today’s $465 million tie-up between United Online and FTD Group. United Online provides Internet access through its NetZero and Juno services, and flowers are sometimes sold over the Internet. Voila, an Internet marriage. Is it 1999 again?

Actually, dot-com mash-up synergies are part of United Online’s stated reasoning, as seen in the conference call to discuss the deal with analysts. United touted its “proven marketing expertise to attract consumers to FTD’s websites and thousands of member florists while cross-selling FTD products to United Online’s existing member base of more than 50 million accounts that have similar demographic characteristics as FTD’s customer base.” Read More.