More start-ups choosing mergers over IPOs

November 10 - San Jose Mercury - Tell us, Mike McCue. Why did you sell Tellme to Microsoft instead of opting for a dramatic Wall Street debut? Don't you listen to the venture capitalists? Don't you know that Silicon Valley dares to dream big?

But dreaming big, McCue says, is precisely why Mountain View-based Tellme became a Microsoft subsidiary in May for an undisclosed price some reports put at $800 million to $1 billion. Passing up an initial public offering, or IPO, to join Microsoft amid the "smartphone" revolution, he says, is a pivotal step toward fulfilling the grand vision that inspired Tellme in 1999: to make getting information from the Internet as easy as speaking into a phone.

"Life is too short to do something small," says McCue, who at 40 is part of a generation of entrepreneurs who started out as the Internet age was dawning. In the Microsoft deal, "we saw the intersection to create something absolutely huge - serving not just millions of people, but billions." Read More.

M&A Outlook 2008: The credit crunch's impact on the middle market

November 7 - Dealspace Blog (The Deal) - A panel at The Deal's M&A Outlook 2008 conference at the Ritz-Carlton, Battery Park in New York City Wednesday moderated by The Deal senior editor Vyvyan Tenorio weighed in on the impact of the credit crunch on the middle market, what it's done to growth and cyclical deals, and the resilience and volume of the middle market.

The panelists Steven Dresner, president of Dresner Partners; Michael J. Lyons, senior managing director at Lincolnshire Management Inc.; Robin Marshall, a partner at 3i Group plc; and Adam D. Sokoloff, managing director and head of financial sponsors and private capital group for Jefferies & Co.; generally agreed that turmoil in the credit markets hasn't hit the middle market as hard as it has the larger private equity deals.

"In August when things started turning, there was a slight change as some of the lenders were ratcheting things down, but other than that we haven't seen major changes in the debt markets [for middle market deals]. The middle market remains very fluid, and our firm is still very busy," said Lincolnshire's Lyons. "The middle market never got to the very high multiples seen in the larger buyout market, where multiples reaches 8 times or 9 times Ebitda. The middle market never really got past 7 times Ebitda." Read More.

M&A Outlook 2008: Cross-border bonanza

November 7 - Dealscape Blog (The Deal) - Mohr offered some color on trends. This year, she said, really represents the high-water mark of where M&A is globally. Overseas is where the growth lies. In 2007 to date, she said 45% of global M&A has been cross-border. It should be somewhere in the high 40% range by the end of the year. While Europe and U.S. have historically driven this, growth in the rest of the world has almost doubled over recent years. In the second quarter of 2007, there was $800 billion in global M&A volume. In the third quarter, it dropped to $400 million. The fallout largely came from the U.S. and Europe, she said, while volume from the rest of the world was essentially flat. The role of emerging markets and their companion sovereign wealth funds are driving a lot of this. Sectors where activity is hot include: financial services, energy and power, and industrials.

For buyers looking to the U.S., the current climate may make M&A prospects more attractive. Because of the credit crunch and the depressed U.S. dollar, cross-border strategics may see this as a good time to invest in the U.S., Hartman said. Read More.

M&A Outlook 2008: Energy sector

M&A Outlook 2008: Energy sector

With winter just around the corner and oil surging toward $100 a barrel, the energy sector has been on the minds of consumers as wells as dealmakers lately. A panel of dealmakers gathered Wednesday at The Deal's M&A Outlook 2008 conference at the Ritz-Carlton Hotel Battery Park in New York City to discuss the M&A opportunities in the sector. The general sentiment of the three panelists, Richard A. Vaccari, vice president, mergers and acquisitions at Sempra Energy; Douglas Korn, senior managing director and executive VP at Bear Stearns Merchant Banking; and Jamie Welch, head of global energy, investment banking division, at Credit Suisse Securities (USA) LLC, is that the outlook for energy deals will remain bullish.

Mohr offered some color on trends. This year, she said, really represents the high-water mark of where M&A is globally. Overseas is where the growth lies. In 2007 to date, she said 45% of global M&A has been cross-border. It should be somewhere in the high 40% range by the end of the year. While Europe and U.S. have historically driven this, growth in the rest of the world has almost doubled over recent years. In the second quarter of 2007, there was $800 billion in global M&A volume. In the third quarter, it dropped to $400 million. The fallout largely came from the U.S. and Europe, she said, while volume from the rest of the world was essentially flat. The role of emerging markets and their companion sovereign wealth funds are driving a lot of this. Sectors where activity is hot include: financial services, energy and power, and industrials. Read More.

Financial firms seen boosting M&A

November 7 - Reuters - While the market for mergers and acquisitions has slowed in recent months due to a credit crunch, financial services firms are expected to seek more opportunistic acquisitions, senior executives predicted at this week's Reuters Finance Summit.

Among the likely moves will be well-capitalized Asian banks looking to buy stakes in U.S. and European financial services markets through acquisitions, executives said.

And European institutions may extend their reach into the U.S. market after assets get cheaper from a falling dollar, they said. Read More.

Private equity poised for a comeback

November 6 - Washington Technology - The recent subprime credit woes brought an end to the third era of private equity, but the fourth era should begin in early 2008, according to David Rubenstein of the Carlyle Group.

Rubenstein is one of the founders of the private equity group, which has focused heavily on deals in the government market.

In a speech liberally sprinkled with self-deprecating humor, Rubenstein explained that private equity deals will return. “They will come back because investors know the returns are better than they can find anywhere else,” he said. Rubenstein was the keynote speaker at the annual Northern Virginia Technology Council annual banquet Nov. 5. Read More.

M&A Outlook 2008: Energy & Healthcare

M&A Outlook 2008: Energy spotlight

Energy has long been one of the largest concerns of the global economy, and with oil prices soaring, unrest in the Middle East and the rise of China, the importance of M&A among energy companies is likely to increase in importance in 2008. Read More.

M&A Outlook 2008: Healthcare spotlight

During the first three quarters of 2007, a total of 722 deals were announced in the healthcare industry worth a combined total of $173 billion, according to investment researcher Irving Levin Associates Inc. The firm notes it now seems unlikely that this year's dollar amount will surpass the record-breaking $267.1 billion reached in 2006. Read More.

India the New Hot Spot for Global Private Equity

November 3 - The India Street - Thanks to increasing consumer market and economic boom in India, the action in private equity space is increasing with every passing day. Therefore, I was not at all surprised when one of my colleagues said to me that private equity funds are queuing up to enter India (By the way, another source for private equity news that we subscribe to is the VC Circle).

Point to be noted here is that Blackstone India and Apax Partners, which started investing in India this year, already have full-fledged offices here. Same is the case with Baird Private Equity and Lehman Brothers. What’s more, Deloitte Touche Tohmatsu India has also set up a dedicated private equity practice called Deloitte Corporate Finance Services India. Read More.

Is Tech Ready to Go Deal-Crazy?

October 31 - Motley Fool - Over the past couple of months, tech companies such as SAP, McAfee, Microsoft, and Oracle have made some interesting headline M&A deals. Is this the start of a major trend? It may be. This is according to a tech research firm, The 451 Group.

First, let's get some background. The 451 Group reports that private equity tech deals surged 138% this year to $183.7 billion. Strategic deal making, on the other hand, plunged 31% to $212.4 billion. A strategic deal is when a company buys another firm in the same industry. Read More.

M&A Outlook: Where the credit crunch and middle market collide

October 29 - Dealscape Blog (The Deal) - "The times, they are a-changin', and for many middle-market dealmeisters, they are a bit confounding, too."

So began an Oct. 1 story by The Deal's Vyvyan Tenorio examining the impact of this summer's credit crunch on the middle market. While the credit freeze threw megabuyouts into the spotlight even more, the impact on the middle market — where there are many more deals and dealmakers, as well as less liquidity and tougher terms of late — has received less airtime. Read More.

Aim market: oil and gas potential M&A targets

October 29 - Telegraph (U.K.) - The oil and gas sector is set for a major M&A boom with every stock in the sector a possible bid target, according to new research from the corporate finance team at Ernst & Young.

The Alternative Investment Market (Aim) has been relatively quiet in terms of deal flow since the credit crisis hit markets over the summer. But that trend could well be reversed as the 90-plus companies in the oil exploration and production sector seem likely to go through a phase of significant consolidation.

Many of the oil prospectors on Aim are running out of cash, says Ernst & Young, and they will either have to take over rivals or be bought out themselves if they are to have a future.

Alec Carstairs, oil and gas partner at Ernst & Young, says: "A combination of weak share performance and low cash balances means that difficult times are ahead for the oil and gas juniors. Read More.

This Just In: Mergers Do Indeed Lower Costs

October 26 - The Motley Fool - As the anniversary integration between Thermo Electron and Fisher Scientific approaches next week, Thermo Fisher Scientific announced third-quarter results that demonstrated how the integration is having a nice effect on the bottom line.

While revenue increased 7% on a pro forma basis as though the company was together in the third quarter of 2006, adjusted operating income rose 17%. The lowered costs of the combined company provided a 150-basis-point improvement of operating margins compared to the year-ago quarter. In addition to cutting costs by sharing overhead and personnel, the company is also dumping low-margin items it sells. That's creating a slight impediment to revenue growth but should improve overall margins down the line. Read More.

International middle-market deals keep pace

October 25 - Dealscape Blog (The Deal) - International middle-market dealflow was very active Thursday amidst the backdrop of megabillion dollar international acquisitions that included Standard Life plc's $17.8 billion bid for Resolution plc, Industrial and Commercial Bank of China Ltd.'s $5.5 billion stake in Standard Bank of South Africs Ltd., and Rexel SA's $4.3 billion cash offer for Hagemeyer NV.

Aside for the aforementioned acquisitions, billion-dollar deals have been few and far between lately. So, the rush of three billion-dollar deals in one day hearkens back to the heady dealmaking days prior to the credit crunch when financing was plentiful and executives weren't spooked by the word recession. Despite Thursday's uptick in billion-dollar deals, middle-market acquisitions — especially foreign ones — kept pace. In general, over the last two months, middle-market M&A has been more plentiful than the billion-dollar deal. Read More.

Dealwatch: Middle Market

October 24 - Dealscape Blog (The Deal) - As the price ceiling of the middle market has inched north, the landscape has taken on characteristics of the megabuyout playing field. Not immune to the credit crunch, the middle market has felt the heat since the summer with less liquidity and tougher terms. The Deal's Vyvyan Tenorio examined the issue in a Deal newsweekly story Oct. 1 how the landscape has changed and what it means for dealmakers. In the wake of the crunch, middle-market deals are dominating the acquisition landscape right now, Dealscape's Gerald Magpily pointed out: Eight of the top 10 domestic deals and nine of the top 10 international deals were in that realm.

But the problems are not lost on the dealmaking arena, which is typically defined by deals worth less than $750 million. Golub Capital LLC, a middle-market lender, retreated from plans to go public in mid-October, given the market for financial services-related offerings. Read More.

Life after the great credit crunch

The heady times for M&A specialists came to a crashing halt in August. With the big takeover show over, corporate lawyers are turning to new plays - many on paths out of the deal desert

October 24 - The Globe & Mail - When Steve Halperin surveyed his calendar in early August, he had every reason to believe the torrid season of deal making would continue.

He and his partners at Goodmans LLP had nailed an unprecedented number of big mergers and acquisition deals, including the record-breaking bid for BCE Inc. by the firm's client, Ontario Teachers' Pension Plan. Behind closed doors things were even busier as he juggled three secret takeover assignments. Read More.

Merger Fever Heating Back Up

What credit crunch? Oracle's bid for BEA underscores a banner year for technology M&A

October 23 - eWeek.com - Oracle's takeover bid for BEA Systems—successful or not—is just the latest example of what is shaping up as a historic stretch of mergers and acquisitions in the technology industry.

Despite a recent slowdown in the credit markets that left private equity firms on the sidelines during the third quarter, M&A analysts still expect 2007 to be a banner year.

"We're very positive on the market right now," said Ward Carter, president of M&A advisory firm Corum Group, of Bellevue, Wash. "There was a slight disruption [in the third quarter] because of the credit meltdown, but Q4 will catch up. There's a lot of pent up demand." Read More.

Energy Sector Roundup

October 22 - Forbes - Following is a summary of top stories in the energy sector Monday afternoon.

Oil Settles Lower as November Contracts Expire

Oil futures fell on concerns about the economy and profit-taking ahead of the November futures contract expiration.

Crude rebounded from earlier lows by the end of the day. Some analysts said prices firmed after an expected cease-fire between Turkey and Kurdish rebels in Iraq looked shakier than first thought. Read More.

Middle-size deals are expected to continue

October 23 - Star Tribune (Minn.) - A top executive of the former Goldsmith Agio Helms doesn't expect a major slowdown in the mergers-and-acquisitions business in the midsize deal market even though bankers are getting more conservative amid the severe credit crunch.

"We had nine deals close in the third quarter, and that's a healthy number," said Mike McFadden, co-chief executive of the M&A advisory firm now called Lazard Middle Market, after its new Wall Street owner. "The private equity firms, the financial buyers were very aggressive on pricing. We're seeing strategic buyers [industry peers] continue to be active, and they are winning more companies at competitive prices."

In short, the premiums are coming down in some cases as chastened bankers, gulping over big third-quarter writedowns on everything from vacant condominium projects to subprime mortgage investments, get more conservative in a tenuous economy. Read More.

Private equity vital to mid-market firms, says survey

October 19 - Gowth Business - Over half of buy-out companies say that their private equity backers add significant value to their business, according to a survey from law firm Eversheds. Just under two-thirds of respondents had achieved their business objectives, with half of these outperforming their plans.

At odds with recent criticism of private equity firms, headcounts in three-fifths of the buy-out companies had gone up, with 18 per cent losing staff and 22 per cent remaining unchanged.

Richard Moulton, corporate partner at Eversheds, comments: ‘In the mid-market sector we are not dealing with Gordon Gekkos. The vast majority of private equity houses provide a supportive partnership which enables management to achieve their goals.’ Read More.

Buyers to ‘benefit’ from M&A market

October 20 - Business in Wales (U.K.) - The mergers and acquisitions market in Wales remains buoyant – despite the crisis that hit the money markets last month, an analyst said yesterday.

A study by accountants and business advisers PKF in association with Deal Drivers UK showed a slowing outside Wales after a ramping up of deals in the last quarter.

The report highlighted a “frantic pace” of deals over the past few years with the last quarter of 2006 being the high point with a record £70.9bn in deal value. Read More.

DEALTALK - Cross-border mergers defy U.S. slump

October 18 - Reuters - Even as tight credit conditions curb the urge among U.S. dealmakers to go shopping, the international mergers and acquisitions market is setting records.

Multinational corporations have been expanding into emerging markets, while foreign companies are using stronger currencies to pursue acquisitions -- especially in the United States.

So far this year, cross-border deals have reached a record high of $1.47 trillion, up 82 percent from the same period in 2006, according to research firm Dealogic.

"The value of the dollar, and the credit situation, are going to have less impact on these types of deals," said Mike Rogers, a partner in Ernst & Young's transaction advisory services group in Dallas. Read More.

Buyouts are big business for Britain whether they are large or small

October 17 - Scotsman.com - THE UK's mergers and acquisitions market is the largest in Europe accounting for a fifth of deal volume and a quarter of deal value in the first half of 2007. Over the past few years M&A activity has risen steadily both in terms of deal value and volume from £15 billion at the start of 2004 to £62.9bn in the second quarter of 2007.

PKF has just produced a report, Deal Drivers UK, in association with the independent Mergers and Acquisitions intelligence service, Mergermarket, which reveals that UK private equity buyout quarterly values have also risen significantly in past years. Read More.

Metals Slump As Housing Market Worsens

October 17 - AP - Base metals declined Wednesday after the Commerce Department reported homebuilding slumped to its lowest level in 14 years, raising concerns that demand for copper and other raw materials could ebb.

In other commodity markets, agriculture futures ended mixed, while oil prices reached a peak and precious metals edged higher.

Although housing news has been grim for more than a year, September's 10.2 percent drop in construction of new homes surprised analysts who on average expected a more modest 4.2 percent decline. It was the slowest pace since March 1993. With the housing downturn showing little sign of a bottom, investors retreated from the industrial metals key to building infrastructure. Read More.

Emerging Market M&A Hits $663 Billion In '07,Beats '06 Record Dealogic

October 16 - CNN Money - Mergers and acquisitions in emerging market countries have reached $662.9 billion so far in 2007, topping the previous record high of $643.3 billion for all of 2006, according to data provider Dealogic.

In the third quarter of 2007, emerging market M&A bucked the global trend with an increase of 7% compared with the second quarter of 2007, and versus a 45% decline for developed countries, it said.

M&A in the emerging markets has been increasing in importance and has so far accounted for 17% of global activity this year, compared with only 11% in 2000, it said. Read More.

Software M&A expected to continue: Names to watch

October 15 - Financial Post (Canada) - Oracle Corp.’s offer last Friday to buy software developer BEA Systems Inc. for US$6.66-billion is yet another sign that the business application market remains highly competitive, as larger players continue to snap up high growth software companies.

Along with Oracle’s tentative deal and SAP’s purchase of Business Objects SA last week, RBC Capital Markets analyst Mike Abramsky said the chance of other mergers and acquisitions for other software companies happening now is high.

“You’re seeing acceleration of some dynamics in the market that are clearly going to increase the probability they will going to be acquired,” Mr. Abramsky said in a phone interview. “Those trends include the slowing in growth of some of the bigger players that have been dominating the market like SAP, Oracle and Microsoft, and the need to fuel that growth through acquisitions.” Read More.

Giants move in on smaller buyouts

rOctober 10 - Telegraph (U.K.) - When Jeff Montgomery's private equity house GMT Communications cast its eye over a small Latvian telecommunications firm recently, it found itself in unlikely company.

The deal was small – requiring around €150m of equity – but among the players was Blackstone, the US private equity giant which eventually won the auction.

Go back a few months and it would have been remarkable to see a major player chasing such a deal – Blackstone has become famous for pursuing buyouts in the many billions of dollars – but, in today's climate, it is the mid-caps that are attracting all the attention. Read More.

Mergers & Acquisitions Institute: The party isn't over for everyone

October 5 - Dealscape Blog (The Deal) - There's been an elephant in the room at the Mergers & Acquisitions Institute in Dallas, and that, of course, is the fact that big private equity deals have virtually vanished after the credit crunch brought on by the subprime mortgage implosion.

Panelists referred to it in their remarks on Thursday — the famed return of the corporate buyer now that private equity firms can't borrow cheaply, deal multiples coming down, the emergence of more stock deals — and there was a lot of chatter about it at the cocktail reception Thursday night. Read More.

Mid-sized companies step up cross border M&As: survey

The key drivers are need for geographic diversification, availability of good targets and access to financing, says the ACG/Grant Thornton/Eureka Private Equity survey

The increasing participation of middle-market dealmakers in global cross-border M&As is a new trend that is developing very quickly, says the findings of the ACG/Grant Thornton/Eureka Private Equity survey. This trend is fast catching up in USA, European and Asia, and is expected to further accelerate in the times to come, the survey says.

Cross-border M&A is now a vital part of strategic plans for middle-market companies and private equity firms, according to the survey. The key drivers in this respect are largely influenced by the need for geographic diversification, availability of good acquisition targets and access to financing, it says. Read More.

Real estate buyout funds still on a tear

October 4 - The Globe and Mail - The private equity party may be over but the news hasn't yet made it to the real estate buyout funds, which are seeking $105-billion (U.S.) in new capital, a sixfold increase from January, 2006.

There are 206 real estate-focused funds in the market raising capital around the world, an explosion of growth in what was once a niche sector of private equity, according to data from London-based Private Equity Intelligence.

Last year, 116 new funds raised a record of $72-billion, and 2007 is set to surpass that amount with a total of about $75- to $85-billion. That's seen further increasing to $80- to $100-billion next year, the research firm said. Read More.

Firms are braced for private equity slowdown

Private equity deal activity is now almost certain to slow as the credit crunch starts to bite

October 4 - Accountancy Age - The profession seems to have accepted that private equity deal activity, a major contributor to sustained double-digit growth at the large accounting firms over thelast three years, is now almost certain to slow as the credit crunch starts to bite.

An analysis of the top 100 private equity exits compiled by Ernst and Young showed that in 2006 the average enterprise value of a private equity business in Europe grew from $800m to $1.5bn at exit. Read More.

Time for a New Corporate Buying Spree?

As earnings take a nosedive, analysts expect to see more companies turn to M&A to pick up the slack. They certainly have the cash

The slowdown in U.S. corporate profits has been swift and stunning. While earnings for companies in the Standard & Poor's 500-stock index grew a robust 14.7% in 2006, profit growth has screeched to a halt amid the troubled financial climate of 2007. With the income-reporting season kicking off the week of Oct. 8, average earnings for the S&P 500 companies are on track to grow just 1.9% during the third quarter, the slowest pace in more than five years, according to senior S&P index analyst Howard Silverblatt. That's down from 7.9% for the first quarter and 9.6% in the second. Read More.

CEN Survey Shows Middle Market Companies Bullish on Economic Growth

Chief Executive Network Surveys Manufacturing, Distribution and Service Sector CEOs

October 2 - Business Wire - Chief Executive Network, the premier industry sector organization for CEOs and senior executives, recently surveyed over 350 companies covering a broad cross-section of the industrial and service sectors. The purpose of the survey was to determine how mid market (non Fortune 500) and smaller companies see their near term business prospects. Read More.

More companies say, 'Let's make a deal'

October 2 - USA Today - So much for the credit crunch killing the merger boom. Canada's TD Bank said Tuesday that it's buying New Jersey-based Commerce Bancorp for $8.5 billion. That came a day after cellphone maker Nokia said it is buying digital mapmaker Navteq for $8.1 billion.

Such deals show that while merger-and-acquisition dealmaking took a breather in August and September, as some buyers had trouble borrowing money, the M&A market is on the comeback. "Suddenly things are looking good," says Richard Peterson at Thomson Financial. "Deals are getting done." Read More.

Private Equity's Feeding Frenzy

A growing appetite for small businesses

Your company might be ready to consider a private equity investment sooner than you think. "There is already a frantic bidding frenzy for the $5 to $15 million deals," says Eric Siegel, a lecturer in entrepreneurial management at Wharton School and founder of advisory firm Siegel Management. "Now you're finding much more activity for the $2.5 million deals, too." That's likely to continue, as these deals don't usually rely on the recently roiled public debt markets. David Lobel, a partner with Sentinel Capital Partners, says his fund considered 56 small business prospects at a recent weekly meeting. "It's an enormous number of deals for us," he says. "A year ago we would have had 30." Read More.

Private Equity Shows Signs of Revival

A mini-flurry of developments indicates that buyouts are coming back and pending deals will go through.

October 1 - CFO.com - It looks like private equity is slowly coming back to life.

Sure, previously agreed-upon deals continue to fall apart. The latest occurred Monday when buyout firm Silver Lake Partners and hedge fund ValueAct Capital opted to terminate their merger agreement with Acxiom Corp. The announcement knocked down the shares of the data management company by more than 22 percent. Acxiom will receive a $65 million termination fee from the two investors.

However, late last week a number of developments suggested that prospects are improving for buyouts in general and the completion of pending deals. Read More.

End of Quarter Brings Steep M&A Slowdown

September 28 - The Associated Press - The tumult of credit market dislocations and volatile stock swings during the third quarter has claimed an all-too-expected casualty: the pace of global takeovers.

There was a marked slowdown in the third quarter with $992.1 billion worth of deals announced _ 43 percent less than during the second quarter, according to data tracker Dealogic. On a monthly basis, there was only $186.3 billion worth of deals announced so far in September _ compared to $231.1 billion in August and $574.7 billion in July.

The numbers aren't all that astonishing to many on Wall Street. The third quarter is typically one of the slowest periods during the year for mergers and acquisitions, but this time around was marred with volatility. Read More.

U.S. mid-market M&A takes glory as big deals slow

September 27 - Reuters - As U.S. leveraged buyouts and multibillion dollar mergers fell off in the third quarter amid a major credit crunch, mid-market deals of up to $1 billion held up remarkably well.

Data provider Dealogic said mid-market U.S. deals valued at between $100 million and $1 billion totaled almost $82 billion in the third quarter, down only slightly from $83 billion for the same period in 2006.

Even when compared with this year's record second quarter, mid-market deals were down only 15 percent.

That compares with a 57 percent fall in U.S. deals over $1 billion in the third quarter, which plummeted to $214.3 billion from $495.3 billion in the second quarter. Read More.

New world record for M&A, but private equity starts to pay

September 26 - Finance Week - M&A activity, in Europe and globally, is set to break last year’s record despite the prospect of a slower fourth quarter. Cash-rich corporates have stepped in as bidders to replace the credit-strained private equity forms – and investment banks enjoy continued fee growth whether the deals stand or fall.

Merger and acquisition deals reached a new record value of $1,800 bn in the first nine months of 2007, 12% up from last year’s record total, according to preliminary data assembled by Thomson Financial. Global deals are up even more strongly, by 37% year-on-year to over $3,500bn. Read More.

Innovative Deal Financing: The credit crunch and the middle market

September 25 - Dealscape Blog from The Deal - With the financing of megadeals hitting walls, the middle market is bracing for fallout, and with lenders tightening the screws, the effects are being felt by companies and sponsors alike.

The Deal's David Carey moderated a panel consisting of Brad Boerick, a partner at Pepper Hamilton LLP; Thompson Dean, managing partner and CFO at Avista Capital Partners; and Robert Willens, a managing director at Lehman Brothers Inc., that discussed the middle market and the credit crunch.

Dean commented that while the middle market didn't participate as much in the LBO debt bonanza, it has still pulled back. However, there are still plenty of middle-market sponsors and hedge funds that didn't get into the LBO rush, who are still doing deals but in a more conservative manner. Boerick agreed that most lenders are saying "they're open for business 'for the right kinds of deals.' " With leverage less available than it was, Boerick added that sellers are waiting on the sidelines to see how things go. Read More.

Read More about the Innovative Deal Financing Conference: Distressed debt

Smaller Oil Companies Fuel UK's North Sea Revival

September 25 - RigZone (WSJ) - Tax changes and investment incentives are transforming the landscape of Britain's North Sea -- reinvigorating Europe's second-largest oil basin after Norway and raising hopes that its long decline may slow.

The revival has taken many in the industry by surprise, because when the government in 2005 announced it would raise taxes on oil production, big international companies warned the move would discourage investments.

Two years later, the biggest oil companies are reducing their presence, but a clutch of smaller companies have moved in to fill the void. The shift in ownership suggests the government may be able to capture more revenue from high oil prices while limiting risks to its energy security needs. Read More.

Private equity image taking a bruising

September 24 - Reuters - The private equity industry has suffered a tough week on the public relations front.

First, there was a protest in New York that, while tiny, didn’t help the industry’s image any. Its theme: private equity’s tax treatment in general and that of Carlyle Group’s CEO David Rubenstein in particular. While private equity firms didn’t design the tax code, it hardly plays well in print that Rubenstein’s tax rate on a significant part of the firm’s profits is 15 percent, while many cops and teachers out there pay 35 percent.

Then there was the fallout from private equity buyers’ decision to back out of their deal to buy Harman Industries International, which has sent the company’s shares down around 30 percent since Friday morning. The withdrawal was an added blow on the PR front in that the deal was supposed to allow Harman shareholders to keep an equity stake in the company. How do fund managers feel about the buyers — KKR and Goldman Sachs — now? Read More.

Canadian M&A rockets 81%

September 24 - Financial News - Canadian mergers and acquisitions surpassed last year's record by 81% on mining and energy pacts, as this morning's activity hit more than $8bn (€5.67bn).

Abu Dhabi National Energy announced today it will buy Canada’s PrimeWest Energy Trust for $5bn, while Canada’s Yamana Gold ended a long-running drama over its three-way hostile deal for Meridian Gold by snapping up the rival gold miner for $3.56bn while folding in its previous acquisition of Northern Orion Resources, valued at just over $1bn. Read More.

Mid-market firms bullish on results as credit crunch bites…

September 24 - TheLawyer.com - The credit crunch has caused City managing partners to eye the markets nervously ahead of half-year figures next month, but mid-market firms have been given renewed confidence, research by The Lawyer can reveal.

With just six weeks to go until most UK-headquartered firms release their half-year results, there is cautious optimism that the credit crunch will not cause a severe dent in the figures, thanks to a standout first quarter. Read More.

M&A bankers deal with something new: idle time

September 20 - Reuters UK - Private equity consultant Jeff Temple and his friend at a major Wall Street investment bank had been used to working well into the evening -- which was why they were surprised to find they weren't too busy to meet for drinks at 5:30 p.m. recently.

Temple, a partner at ProAction Group, typically gets together with the investment banker every few months, and he can't remember the last time they met up before the sun had set.

Still, investment banking floors aren't exactly ghost towns.

Small to midmarket M&A activity is expected to keep up. Corporate buyers are hungry for deals. Large leveraged buyout firms such as Blackstone Group and Carlyle Group will have to spend their tens of billions somehow, probably in the form of smaller deals. Read More.

Blackstone’s James Sees Private Equity on the Rebound

September 21 - NY Times Blog - Blackstone Group President Hamilton James is sounding guardedly upbeat about the state of the private equity industry, which is in a semi-frozen state these days because of turmoil in the credit markets.

Speaking at the Dow Jones’ Private Equity Analyst conference in New York, Mr. James said the private equity market will likely bounce back in the coming months, albeit to the slower pace of deal-making activity it saw three or four years ago, as opposed to the breakneck pace of the last few years. Not long after he spoke, Cerberus Capital Management announced the $2.1 billion buyout of a paper company, a development that one private equity executive called “encouraging.”

“It will take a while to get back to full volume,” Mr. James said Thursday. Meanwhile, he added, “We’re putting out just as much money as before the meltdown began — and at higher [projected] returns.” Read More.

Evercore's Altman says private equity will return

September 20 - Reuters - Down but not out, private equity will return to drive deals after a period of hesitation, Evercore Partners Inc. Chairman Roger Altman said on Thursday.

"We're going to see plenty of private equity transactions once a degree of stability returns," Altman said at the Dow Jones Private Equity Conference here. "Private equity will return in a different way."

The next round of buyouts will be more cautious and at lower prices, as they will employ less leverage and take into account the potential for a recession, Altman added. Read More.

Private equities refocus on existing holdings, smaller deals

September 19 - MarketWatch - Private equity firms are attempting to adjust to life in a tighter credit market, refocusing their attention on companies they already own and pursuing deals that do not require as much leverage.

But while the large deals have ground to a halt for now, it remains unclear whether the slower pace of deal making will force private equity firms to raise more modestly sized funds in the future.

These were among the issues discussed during the opening panel of Dow Jones & Co.'s 14th annual Private Equity Analyst Conference, which opened here Wednesday. Read More.

Private equity exits

September 19 - FT.com - True to its name, the buy-out industry has spent the past few years doing more buying than selling. Private equity firms have amassed portfolios using cheap, plentiful debt. But these assets must be sold to produce profits. According to Dealogic, private equity firms have announced $675bn of acquisitions globally this year, but have pulled off less than $250bn in exits. The mega-funds that private equity groups have raised in recent years remain in investment, rather than exit, mode. To offset the ballooning funds’ purchases this year would require their exits from the past three years combined.

Buy-outs have slipped markedly since early summer. With lenders cracking down on aggressive loans, recapitalisations and secondary buy-outs (flipping assets from one private equity shop to another) look tougher. So funds are cautiously eyeing initial public offerings – and considering how to run better those companies they must hang on to. Read More (Subscription Required)

Dollar Near Record Low Versus Euro Before Bernanke's Testimony

September 20 - Bloomberg - The dollar traded near a record low against the euro on speculation Federal Reserve Chairman Ben S. Bernanke will signal a U.S. housing slump threatens to slow economic growth in congressional testimony today.

The U.S. dollar fell against 15 of the 16 most-active currencies as traders bet the central bank will cut its benchmark interest rate further after the first reduction since June 2003 on Sept. 18. The currency dropped to the lowest in nine years against the Indian rupee and a six-week low against the Australian dollar.

"We're going to see a continuation of U.S. dollar weakness,'' said Greg Gibbs, a strategist at ABN Amro Holding NV in Sydney. "Bernanke will talk about the housing market and how that could flow through to the rest of the economy. The possibility of more U.S. rate cuts is completely open.'' Read More.

High hopes for Global, MidMarket M&A

September 18 - Reuters - While large-cap private equity firms are licking their wounds, a brighter picture has emerged from another section of the M&A community: the midmarket.

Indeed, private equity executives and bankers–large and small–say the midmarket is where it’s at (link to Smaller buyout shops feel the love story)these days. So does Grant Thorton, which says in a recent survey that 75 percent of mid-market companies expect to engage in international M&A at least once in the next 12 months. Read More.

Debt market may tighten further in Canada, but opportunity remains

September 18 - Financial Post (Canada) - The market for highly-leveraged, mega-cap private equity deals involving names like First Data Corp. and TXU Corp. in the U.S., and Bell Canada Inc. in Canada, may be tightening up, but that does not appear to be the case in the mid-market just yet.

The space where companies with roughly $50 to $300-million in revenue operate is the focus of institutional fund manager Penfund, who is eager to capitalize on any such shift in debt markets. The firm does equity investing via buyouts and minority investments, as well as provides private high-yield debt.

“Right now, conditions are still pretty good,” said Adam Breslin, a partner at Penfund. “There hasn’t been a major bank tightening for the middle market so far.” Read More.

Dutch finance ministry publishes proposals aimed at sharpening M&A laws - UPDATE

September 14 - Forbes - The Dutch Finance Ministry has published proposals to sharpen regulations around company takeovers to provide greater transparency about the bonuses paid to company directors and the consequences for employees, while also implementing stricter time frames.

The legislation will also serve to implement the Dutch government's response to the EU Takeover Directive, obligating a company that takes a 30 pct stake or more of another company to make a mandatory offer for all of the company's outstanding shares at a fair price.

Greater supervisory powers will also be granted to the Dutch stock markets regulator AFM, which will in future be required to assess a company's offer documentation. Read More.

Private equity will emerge much-changed

September 16 - FT.com - Remember private equity? It was the future once – the model not just for amassing vast personal wealth but for running companies, period. At present, it is shrouded in the fog that covers most of the financial landscape. But when that clears, what place will private equity have in the scheme of things?

To answer the question, we must first deconstruct the model. How much of the industry’s returns in recent years came from running companies better, and how much from financial engineering or simple leverage?

Indeed, how much of the takings for private equity managers came from their share of the profits and how much from management fees?

The hard-line advocates of private equity will tell you that nearly all the returns came from better management. Read More.

Private equity groups foresee slowdown in deals as credit sources dry up

September 14 - Times Online (UK) - One of Britain’s leading venture capitalists has given warning that the market for leveraged buyouts will dry up for the next one to two years in the wake of the credit crisis.

Guy Hands, in a quarterly letter to investors in his Terra Firma buyout group, said: “The days of simply buying a good company, financing it well and enjoying a great return are over. The debt simply will not be there.”

The financier, who closed his £2.4 billion acquisition of EMI just before the markets turned, said that private equity firms would have to work much harder to get deals done. Read More.

M&A market may cool down with capital supply getting squeezed

September 13 - The Economic Times (India) - Mergers and Acquisitions market might cool down with supply of capital drying up in the context of increasing credit defaults and private equity (PE) activity about to peak, the Boston Consulting Group said.

"One of the factor not in favour of increased M&A in the light of the unfolding subprime crisis was that an increase in corporate defaults could reduce the amount of capital available to prospective acquirers," BCG's global study on M&A said. Read More.

Private equity is in pause mode, Leech says

September 12 - The Globe & Mail (Canada) - Private equity buyers are adapting to the pricier debt market and there appear to be few people walking away from deals, said Jim Leech, who will take on the chief executive officer role at the Ontario Teachers' Pension Plan on Dec. 1.

Volatility in the credit sector sparked by defaults on high-risk mortgage loans in the United States has dampened the private equity market, but "this is a pause, not a conclusion," Mr. Leech, currently senior vice-president of Teachers' Private Capital, said in a speech in Toronto yesterday. Read More.

Bubble Energy?

September 11 - Forbes - Talk of an alternative energy "bubble" started percolating in the trade and cyber-press over the past several months. The fact is, the staid Dow Jones industrial average has done as well or better than most alternative energy indexes. So, hot, or not? Since global energy demand is rising unabated, the core question is, How big a piece can alternatives capture?

According to (some) wizards at Harvard, "Solar could meet one-fifth of U.S. energy needs within two decades." At least that's what they said 30 years ago in the widely acclaimed book Energy Future. What happened? If you count as solar both the obvious solar and indirect solar sources such as wind, wood, corn, geothermal and the like, America today hit a collective 4%, or one-twenty-fifth share. Read More.

Private equity eyes UK property funding role

September 6 - Reuters (London) - Private equity smells an opportunity in UK commercial property. Prices are falling, but developers cannot get the funds to buy bargains because lenders rocked by the subprime crisis are running shy of the sector.

Unlike the vulture funds of the 1990s though, these opportunists are not planning hostile takeovers of property firms paralysed by a lack of credit.

Instead, private equity sees itself as "white knight", offering its own cash for funding should the need arise, with a view to a more traditional debt refinancing when banks' appetite for lending returns. Read More.

Flurry of deals carves up a Canadian industry

With foreign players knocking, energy executives say there's still a place for independents

September 10 - The Globe & Mail (Canada) - Canada's nascent wind power business has caught the attention of foreign players, who have been steadily buying up domestic companies as the industry consolidates into fewer and fewer hands.

While more buyouts are expected, wind energy executives say there is still room for small independent wind developers in an industry that is finding its feet in a burgeoning market for alternative energy sources.

This summer, two very different foreign players grabbed a foothold in the Canadian wind business. In June, U.S. investment bank Lehman Brothers bought a big stake in private Toronto wind and solar power developer SkyPower Corp. for an undisclosed sum. Read More.

M&A Hiring Shows Life Despite Leery Outlook

September 10 - WSJ - European banks and other financial institutions plan to hire more merger-and-acquisition staff, even though there has been a sharp jump in the percentage that think a bursting loan bubble poses the greatest threat to deals in the next year, according to a survey by IntraLinks M&A Monitor, in association with Financial News.

A poll of 348 banks, corporations, legal firms, and private-equity businesses conducted as the worst of the credit crisis was unfolding this summer found that 84% were seeking to hire staff, marking a sharp increase from 69% in April and 75% a year ago. The optimism was highest in Germany, where more than 90% of respondents said they expected to recruit additional personnel, the study found. Read More.

Wall Street Beat: M&A, VC funding stay hot

Cognos, Yahoo, and Oracle are among the companies making acquisition announcements

Merger and acquisition news from companies as diverse as Yahoo, Cognos, and MetroPCS Communications heated up IT investor interest this week, shoring up confidence in the sector even as credit-market concerns continued to buffet the stock exchanges.

After wireless carrier MetroPCS proposed a merger valued at about $5.5 billion with rival Leap Wireless, its share price Tuesday spiked $1.36 to close at $28.65. Brokerage Jefferies & Co. Wednesday then upgraded its rating on the stock from "hold" to "buy," sparking another uptick in the company's share price. Though the merged company would have about 6.2 million customers, a far cry from the 50 million-plus subscriber base that market leaders like AT&T and Verizon have, the combined company would be the fifth largest in the U.S., with a national footprint. Read More.

Mergers can survive without private equity: Rubin

September 7 - Financial Post (Canada) - If mergers and acquisitions are going to continue to drive stocks higher, forget about getting much of a boost from private equity buyout firms.

These firms had been playing an increasingly important role during the buyout boom earlier this year and were involved in big deals, like the takeover of Bell Canada Inc. and Chrysler. Now, though, they appear to be withdrawing from the market.

According to Jeff Rubin, chief economist and chief strategist at CIBC World Markets, global private equity deals hit a peak of about US$150-billion in May, but then declined substantially in June and again in July. In Mr. Rubin's words, they then fell off a cliff: In August, there were just US$17.8-billion of private equity deals, a tiny fraction of their former glory. Read More.

BMO Capital Markets Releases Annual M&A Report on the North American Transportation Industry

M&A activity remained strong in 2006 and deal volume is expected to continue but may be slower in the short-term due to current credit market conditions

September 6 - CNN Money - The two-volume report provides an in-depth review of mergers and acquisitions and corporate finance activity among Transportation Industry Service Providers and Transportation Equipment Manufacturers. The report also looks at the level of M&A activity in various sub-sectors, including active strategic and financial acquirers and a summary of financial parameters, including valuation metrics.

"Overall, the M&A activity in the transportation industry remained strong in 2006 with a total number of 253 transactions being announced," said Paul Hawkinson, Managing Director and Head of BMO Capital Markets' Commercial & Industrial Sector Group. "The volume of activity was driven by several secular trends including the continued outsourcing of transportation activities by corporations and the off-shoring of manufacturing activity as corporations moved to lower costs." Read More.

Deals Boom Fizzles As Cheap Credit Fades

September 6 - WSJ - The global mergers-and-acquisition boom that began in 2003, the greatest deal frenzy in history, is winding down.

This summer's crisis of confidence has choked off the easy credit that fueled buyouts for years, abruptly altering the psychology of the deal market. Through June, M&A activity, as measured by total transaction values, had been running at its highest annual rate ever and was on pace to generate the deepest pool of investment-banking fees.

But within weeks, the market began to run out of steam. In August, there were about $222 billion worth of deals around the globe, according to market research firm Dealogic, the lowest monthly total since July 2005, and a far cry from the $695 billion figure struck in April and the $579 billion in July. Read More.

Dissident investor wins 3 H&R Block board seats

September 6 - Reuters - Activist investor Richard Breeden has won three seats on H&R Block's board, advancing his effort to push the company to focus on tax preparation and quit businesses such as banking and mortgage lending.

The slate proposed by Breeden, a former Securities and Exchange Commission chairman, was victorious based on a preliminary count of shareholder votes, H&R Block said Thursday at its annual meeting in Kansas City, Missouri.

Since late June, Breeden had campaigned for seats on H&R Block's 11-member board, and had won the support of the three major U.S. proxy advisory firms. He won seats for himself and two associates: Robert Gerard, a former assistant U.S. Treasury secretary; and L. Edward Shaw. Read More.

UK and global M&A set new record - and open to new players

September 5 - Finance Week - Acquisitions by, and of, UK companies both jumped in the second quarter; but this may have featured the final flourish for big, leveraged private equity deals. While raising loans for M&A has got a lot harder in Q3, the global boom is set to continue – but with new trade players leaping on devalued stocks, especially in the US.

British companies stepped up their overseas M&A activity in Q2, but also became more frequent targets for foreign acquirers, according to figures released yesterday by the Office of National Statistics. Foreign acquisitions by UK-based firms totalled £16.9bn in Q2, four times the Q1 expenditure and three times the amount in Q2 last year. Acquisitions of UK firms from abroad reached a new record of just under £50bn, nine times the Q1 figure and more than 2.5 times that of Q2 2006. Read More.

ACG/Grant Thornton: U.S. Middle Market Corporate Executives and M&A Professionals Target More Cross-Border Deals

Dealmakers Search for Geographic Diversification, Access to New Markets, and Greater Efficiencies

69% Bullish About Cross-Border M&A 92% Say Deals Met Objectives; 58% Say Took Longer than Expected

September 4 - ACG - U.S. mid-market corporate executives and merger professionals are looking to aggressively target cross-border acquisitions in the next 12 months, according to a survey of more than 200 U.S. active representatives of middle-market companies, investment banks, private equity firms, law firms, accountants and consultants by ACG (Association for Corporate Growth), Grant Thornton LLP, and Eureka Private Equity.

The survey found that nearly three-quarters (72%) of respondents have been involved in cross-border M&A, and, almost as many, 70% anticipate doing at least one cross-border deal in the next 12 months. Most are bullish on the current environment for cross-border M&A, with 69% saying the current environment is good, and 31% calling it fair. Read More.

M&A robust for tech sector

August 31 - Small Business Times - Merger and acquisition activity within the technologies service sector is robust, with strategic
buyers targeting companies that provide help desk, data center, hosting, outsourced IT departments and other services.

Strategic buyers are more active in the IT sector than private equity investors.

“The big difference is that in IT, it’s virtually all strategic buyers,” said Victoria Fox, managing director with Emory & Co., a Milwaukee-based investment banking firm. “There is really not a big private equity interest.”

Strategic buyers generally look for two things in the IT service sector – geographic location or an add-on offering they do not currently provide. Many IT service providers are trying to have as many offerings as they can for clients, making niche providers especially attractive. Read More.

Field leveling for M&A players

August 30 - TwinCities.com - Not everyone is stressed about the credit crunch. Reid MacDonald might even go so far as to say he's a little excited about it.

The CEO of Minneapolis-based Faribault Foods says he thinks small companies like his that are looking to make acquisitions will benefit from the new credit environment because they'll be better able to compete for deals.

As lenders pull back on financing, the private-equity firms that have been snapping up companies at record prices could be forced to pull back on highly leveraged deals. As they do so, the prices they pay for their acquisitions likely will come down, finance experts say.

That's good news for strategic buyers like Faribault Foods, which has been outbid by private-equity firms on at least a handful of deals in recent years. Read More.

Mergers Could Ignite Airline Stocks

August 28 - Forbes - Could the airline sector be taking off soon?

With key players in the industry looking to consolidate, the fall may bring traders' money and headlines to an industry dogged by high fuel prices.

Although he does not believe any deals are imminent, Calyon Securities analyst Ray Neidl said in a research note that the market may start to factor merger considerations into stock prices. Read More.

Canadian mergers hit record, but may have peaked

August 29 - Reuters - The value of mergers and acquisitions involving Canadian companies surged to a record in the second quarter, data showed on Wednesday, but that could be the peak of a year-long buyout binge.

Companies announced transactions worth C$202 billion ($191 billion) in the quarter, more than double the previous record of C$89 billion set in the third quarter of 2006, according to joint Financial Post and Crosbie & Co. data.

Even without the boost from two blockbuster transactions -- the announced buyouts of telecommunications group BCE Inc and aluminum producer Alcan Inc. -- the three-month period to June 30 would still have been a record. Read More.

CFOs see private-equity activity increasing: survey

Execs expect buyout binge to continue, but others say deals will be smaller

August 28 - MarketWatch.com - A survey released Tuesday of more than 100 chief financial officers found that 75% of them expect the number of companies seeking private equity to increase in the next 12 months.

But others aren't so sure. "I'd be very surprised if private-equity activity picked up at this point," said Jon White, president at Beacon Hill Financial in Orlando, Fla. "The credit crunch is making deals much more expensive. We're probably looking more at moving toward historic long-term averages where private equity deals number a lot less and involve substantially less money."

None of the CFOs expect private-equity activity to decline in the coming year, according to the survey conducted by Tatum LLC. Another 25% forecast some leveling off, according to the Atlanta-based strategic planning firm. Read More.

Private equity lessons

August 27 - Financial Times - Runaway booms always mask a raft of questionable activities. The buy-out frenzy was no exception. Problems being exposed by the credit market crunch go beyond the exuberant funding promises that the banks now regret. Home Depot’s renegotiation underlines a few of them.

First, there is “stapled finance”. The idea was that banks advising on a sale would also offer financing terms to potential buyers to lubricate the process. That created a conflict of interest by positioning the bank alongside both buyer and seller. In Home Depot’s case, Lehman Brothers advised on selling the supply division, helped provide the financing and then, when the deal looked tenuous, helped to force a renegotiation and price cut. At that point, it was removed as an adviser. But it should never have been on both sides. In a tight spot, the interests of its shareholders were always going to come above Home Depot’s. Read More (subscription required).

Alternative Energy: Can It Compete?

August 27 - Seeking Alpha - It's no secret that alternative energy is an emerging market with enormous potential for growth; fossil fuel depletion, political volatility in oil producing nations, and the effects of greenhouse gasses have become pressing issues for many in recent years. But for all the hype, the question remains: Can it compete?

The dig against alternative energy has always been costs. Yes, solar power is nice, but if it costs 10X more than burning oil, we'll stick with our dinosaur fuels.

Technological advancements over the past few years, however, have significantly decreased production costs. With rising prices for fossil fuels, solar power, wind power, hydropower, bio-diesel, and ethanol have seen tremendous growth. Thanks to increased cost efficiency, alternative energy sources have caught the eyes of many governments and energy producing companies across the globe, which are throwing increasing amounts of money at the concept. Is this money over the bridge, or have alternative energy sources turned the corner to become cost effective? Read More.

Capgemini says 28.5 pct of US executives mulling mergers to keep market position

August 23 - Thomson Financial - IT services company Capgemini said 28.5 pct of US executives it surveyed are considering mergers and acquisitions as a way to maintain or increase their companies' global market position in the next three years.

Capgemini said it comes amid a broad lack of confidence that sales can rise enough to achieve this goal with existing resources.

It said 38.3 pct of the executives are considering greater capital investments and 32 pct are thinking of adding jobs.

Other options being considered by at least 32 pct of the executives are improving company practices outside of production, more training and outsourcing some functions.

Developers a-callin' on private-equity firm

August 23 - IndyStar.com - The subprime mortgage collapse. Shrinking credit. Stock market angst.

For many investors and real estate developers, the news lately hasn't been good. But for others, including private-equity firms such as D.W. Funke Investments, the housing market's losses have been their gain.

"We are in high-growth mode," said David W. Funke, president and chief executive of the Carmel-based investment company.

"Because of what's happening with the subprime collapse and the shaking up of the capital markets, generally all we have to do is respond to the phone calls coming in" from commercial real estate brokers, bankers and developers, he said. Read More.

Private Equity Firms Are Vital Components in Today’s Global Economy

August 22 - New Age Media Concepts - Gone are the days of true corporate raider, where companies were torn apart and sold off to the highest bidder. The misconception in today’s market place by investors, not institutional investors mind you but individual investors, is that when a Private Equity Firm takes over a public company that the corporate raider mentality comes into play. This is far from the truth actually.

Private Equity firms, as it relates to public companies, add true value through restructuring. Keep in mind that when a public company does anything dramatic that could temporarily reduce a company’s earnings or asset base, the street is unforgiving. Its this fear that actually puts a blockade in place and prevents most public companies from doing what a private equity firm is already geared up to do, and that is reduce the fat, build a strong sound foundation and add true growth to the company. Read More.

Private Equity, Public Gain

Let's lay to rest the myths about private equity, once and for all. There's no question PE is a boon to society

August 21 - Business Week - Recent turmoil in credit markets and hedge fund losses, along with the public offering of the Blackstone Group, have reignited controversies over the growing power of private equity. Critics call private equity outfits such as Blackstone the new robber barons, ready to plunder great corporations and leave them in a shambles.

Nothing could be further from the truth. The dynamic leadership of private equity is providing great benefits to corporations, the economy, and society.

Let's take a closer look at some myths about private equity: Read More.

The Right Stuff

August 21 - ThomasNet Industrial Newsroom - Apathy, budget cuts and growing global competition ... despite a number of concerns, the worldwide aerospace and defense market is on track to grow by more than 19 percent by 2011.

And “as airline profitability improves, OEMs steadily raise delivery schedules and supply chain businesses see strong levels of shipments to Airbus and Boeing,” the outlook for the A&D sector “remains extremely attractive thus far in 2007,” investment firm RSM EquiCo Capital Markets noted in April.

Meanwhile, merger and acquisition activity in the A&D sector continues to rise, as "strategic and financial players gain confidence in the long-term stability of the commercial build-cycle and bipartisan defense spending,” according to RSM EquiCo’s Q2 Aerospace & Defense Review. Read More.

Deals still flowing for mid-market buyout firms

August 20 - Crain's Cleveland Business - A focus on smaller deals has helped insulate Northeast Ohio’s private equity firms from a sudden chill in buyout activity felt at the high end of the acquisition market.

Officials at these middle-market buyout firms, which specialize in acquiring companies with $500 million or less in annual revenue, report healthy deal pipelines. Their ongoing flow of deals contrasts sharply with the recent drying up of transactions involving big buyout firms that as late as this spring routinely were pulling off billion-dollar deals, such as the $7.4 billion acquisition announced in May of a controlling interest in automaker Chrysler Group by Cerberus Capital Management.

“So far, from what we’ve seen, there hasn’t been any appreciable slowdown in the activity of our clients, which are middle-market buyout funds,” said Ira Kaplan, associate managing partner and chairman of the private equity group at Cleveland law firm Benesch, Friedlander, Coplan & Aronoff LLP. Read More.

Why buyer's won't walk in private equity's world's changed circumstances

August 21 - Blogging Buyouts - For the past few years, things have been nearly perfect for the private equity world. Credit was cheap and public companies were certainly willing to go private.

But, of course, things are much different now. In fact, there is some doubt that mega deals -- such as for TXU Corp. and SLM Corp. - may not get done because of the tough credit environment.

However, can buyers legally walk from a deal?

Not very easily, actually. After all, when a buyer signs a merger agreement, it's an enforceable contract. And, if it is breached, the consequences can be severe. In fact, in some cases, the buyer may be required to complete the deal. The New York Times looks at this issue in depth today. Read More.

Chemical M&As "maintaining momentum": report

August 17 - Canada Plastics - Merger and acquisition activity has maintained strong momentum during the first half of 2007, according to the new quarterly Chemical Compounds report by PricewaterhouseCoopers. The report found that Western Europe still maintains the highest deal value, but a larger number of deals are occurring in North America.

Overall, in terms of value, 2007 outpaced the first half of 2006 due to the large value of "mega-deals," the report noted. Read More.

Private equity still drawing big investors

August 15 - CNN Money - Amid the freeze on private equity deals, big investors like pension funds and college endowments are still plowing money into buyout funds, suggesting they still see opportunities for outsized returns.

Buyout funds have already raised $139 billion globally so far this year and are on pace to exceed the $212 billion raised in 2006, according to London-based research house Private Equity Intelligence.

Another record year of fundraising comes just as the buyout boom has come to a grinding halt. A push back in the debt markets that began in late June has erupted into a full-blown credit crunch, with financing for leveraged buyouts now at a standstill. Read More.

Private Equity Party Not Pooped In Europe

August 16 - Forbes - The wisest investors are sometimes those who refuse to follow the crowd, and the big guns of private equity are hoping the credit crunch hasn't put off any European buyout fans. As of Thursday, Apax Partners, Kohlberg Kravis Roberts and France's PAI are all looking for over $10 billion each to fund their future conquests of Europe.

According to data from London-based research firm Private Equity Intelligence released Thursday, Apax Partners is raising 10 billion euros ($13.4 billion) for its Europe VII fund, while former BNP Paribas subsidiary PAI partners is also looking for the same amount for its Europe V fund. These are the top two European buyout funds on the market according to target size. Read More.

Nanotech’s Impact on Cleantech Growing Rapidly

August 16 - Business Wire - With the fevered search for new clean technologies, attention is turning to nanotech’s potential in energy and environmental innovation. Nanotechnology’s impact on cleantech is growing, and happens both through product and process innovations, with each type of impact posing its own set of challenges, according to a new report titled “Nanotech’s Impact on Energy and Environmental Technologies” available exclusively to Lux Research clients.

“The rapid increase in nano-enabled cleantech patents and publications relative to overall cleantech numbers indicates that nanotechnology’s impact on cleantech, though small at present, is growing at a fast clip,” said the report’s lead Lux Research analyst Jaideep Raje. “However, the near-term cleantech applications of nanotechnology are likely to come in more mundane forms like catalysts, coatings, and additives – not through big-ticket applications like next-generation photovoltaics.” Read More.