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.
Monday, June 30, 2008
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.
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.
Friday, June 27, 2008
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.
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.
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.
Wednesday, June 25, 2008
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.
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.
Tuesday, June 24, 2008
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.
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.
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.
Monday, June 23, 2008
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.
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.
Friday, June 20, 2008
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.
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.
Thursday, June 19, 2008
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.
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.
Wednesday, June 18, 2008
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.
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.
Tuesday, June 17, 2008
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.
"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.
Monday, June 16, 2008
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.
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.
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.
Friday, June 13, 2008
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.
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)
Thursday, June 12, 2008
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.
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.
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.
Tuesday, June 10, 2008
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:
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.
Monday, June 09, 2008
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.
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.
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.
Friday, June 06, 2008
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.
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.
Wednesday, June 04, 2008
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.
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.
Monday, June 02, 2008
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.
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