Mergers & Acquisitions: The Dealmaker's Journal articles from July 2008

Mergers & Acquisitions: The Dealmaker's Journal archives from July 2008

It's a Big World.(Brief article)
July 1, 2008... Every now and again I'll hear a pitch about some new trend in some new market. I've heard enough of these that they can all start to sound the same after awhile. "The blank market is set to take off, because the GDP has climbed blank...

ACG Board 0f Directors.
July 1, 2008... Bradley J. Hughes* Acting President bhughes@acg.org Harris Smith* Chairman hsmith@gt.com Robert Blumenfeld Chapter Representative Director bobby@bpcllc.com Clifford Braly, III. Chapter...

Member Magic: ACG issues a call to arms, soliciting members for fresh insight into the deal market.
July 1, 2008... First, a huge thank you to our members for helping make the July issue of Mergers and Acquisitions Journal one of the most exciting to date. Last month, we sent the first of our content solicitation e-mails calling on members to...

Strategies for a Weak Economy: Amherst Partners' managing partner Scott Eisenberg provides a playbook for a operating in a difficult market.
July 1, 2008... Almost all economic indicators are trending down. It really doesn't matter if the pundits are correct about whether or not the economy is in a recession. The housing market is at its lowest level since the early nineties, the credit markets...

Save the Date!(Calendar)
July 1, 2008... ACG San Francisco What the Luxury Customer Wants July 1, 2008 San Francisco, CA www.acg.org/sanfrancisco ACG Portland Peer Growth Event Featuring Chanda Brown, Vice President of Oregon Ironworks July...

Trends in Canadian M&A: Stirling Mercantile Corp.'s Ross McDonald, a vice president at the firm, highlights some of the key themes driving the deal market in the sunny North.
July 1, 2008... In economic terms, popular folklore is that "when the U.S. sneezes, Canadians catch a cold." Over recent years, M&A in Canada has boomed. Both M&A volume and deal values have breached record levels. But U.S. economic conditions have...

A China Checklist: BaySource Global's president David Alexander spells out five things investors should understand before launching in China.
July 1, 2008... You've just climbed in the taxi and are on the way back to your hotel after the closing dinner with the principals of your latest deal. As the lead in the deal process you've spent months cultivating a relationship with the owners, convincing...

Evaluating the Likelihood of a Recession: Each month, ACG members offer a brief, candid viewpoint on a hot topic related to M&A, growth strategies and general market trends. This month, members weigh in on the economy.
July 1, 2008... Alarms have sounded in the media that the recession has begun, yet the GDP grew 0.6% through the 1st quarter of 2008. Do you expect the numbers to bear out a recession in the second quarter and has this been reflected in your firm's...

What players in the market are talking.
July 1, 2008... The mortgage crisis hits everyone Michael Jackson gets to keep the Neverland Ranch... for now. In mid-May he announced that the foreclosure sale of his Neverland Ranch property, complete with its amusement park, was cancelled by real estate...

Tomorrow's Deals: Taking stock of what dealmakers are looking at.(NexCen Brands Inc.)
July 1, 2008... From buyer to seller NexCen Brands, alongside news that it would delay its first-quarter earnings statement, said it is exploring "all strategic alternatives," including the possible sale of one or more of its businesses. The company also...

Beltway Monitor.
July 1, 2008... Is consolidation to blame? As gas prices continue to escalate, the search for a solution has led some politicians to look at M&A. In mid-May, Representative Steve Kagen (Democrat, WI) sponsored the bill H.R. 6074, Gas Price Relief for...

Flipping Through the Archives.(Brief article)
July 1, 2008... Reed's foresight A federal appeals court recently upheld a ruling stating that U.S. currency, which is indistinguishable without sight, discriminates against blind people. The ruling could force the Treasury Department to come up with a...

Polite Conversation: M&A's Flattening Market Deal pros have had a lot to talk about on the international front.(Mergers and Acquisitions)(Quotation)
July 1, 2008... "A true international firm shouldn't have a quick answer as to where they're headquartered." -Steve Tadler, Advent International, see story page 28 "The early deals have been well received, showing an overall increase in corporate...

Rollups Face Scrutiny: A recent ruling from the FTC serves as a warning that regulators not only have a long memory but will also keep an eye on smaller deals if they're part of a bigger picture.(Federal Trade Commission)(Case overview)
July 1, 2008... The rollup is an old standby for investors, and industry titans such as Sysco Corp. illustrate the kind of scale that can be achieved through a well thought out series of transactions. Rarely, it seems, have regulators ever thought to police...

M&A Lite: Companies are increasingly looking to joint ventures as a solution to stagnant growth.
July 1, 2008... If M&A is like a marriage, then a joint venture is akin to a live-in courtship, and as many companies are discovering, the less binding alternatives do have their advantages. This is especially true in a market in which companies are...

Study: Reviewing the Merger Review Process - An attorney from the Department of Justice released a 219-page research paper identifying various pitfalls in antitrust regulation.
July 1, 2008... It's been a discouraging run for the Federal Trade Commission and the U.S. Department of Justice. Following a recent string of defeats in which the FTC and DOJ filed lawsuits against potential mergers citing anti-competitive threats only to...

Quick Hits from Mergers unleashed.
July 1, 2008... Exhausted As part of a massive restructuring effort, General Motors initiated a strategic review of its Hummer brand, the automaker's embattled sport utility vehicle that has seen sales plummet as gas prices have climbed. The...

Emerging Market Payola: A recent survey shows that corruption is still par for the course in some areas around the globe.
July 1, 2008... When BAE Systems' chief executive Michael Turner entered the U.S. near the end of May he was greeted with a subpoena related to a Department of Justice bribery probe. The next step could be an appearance before a grand jury, where he would...

Sleeping with the Enemy: Who says sponsors and corporate buyers can't work together? With credit drying up, PE firms and strategic buyers have been pairing off to keep dealflow chugging along.
July 1, 2008... The ongoing acclimation to life after the credit crunch has seen some reshuffling of traditional roles, and increasingly, private equity firms are popping up alongside corporate buyers as funding sources for traditional mergers. Essentially,...

Good Money: As portfolio companies hit rough patches, a few firms have proven that they'll step in with more capital if it means the business can live to see another day.
July 1, 2008... The credit crunch has not been kind to the middle market, as bankruptcies have surfaced with regularity out of private equity portfolios throughout much of 2008. Names such as Golden Gate Capital, Yucaipa Cos., Willis Stein, Kohlberg & Co....

Embracing Distress: As dealmakers look to pick off troubled assets, many are finding that valuations can be more art than science.
July 1, 2008... Most dealmakers will claim they relish an inefficient M&A market. That partiality, however, is being put to the test, as the opportunity for turnaround and distress situations has forced investors to reconsider how they value businesses....

Buyout Bits from mergers Unleashed.
July 1, 2008... Moving on The Bear Stearns-affiliated private equity arm, Bear Stearns Merchant Banking, is moving on as an independent PE firm. The group spun out from the bank, which recently merged with JP Morgan Chase, with Bear Stearns' new owner...

New: Advent International defies the conventional wisdom that suggests its new $10.4 billion fund will alter the firm's proven formula.
July 1, 2008... New money - sometimes it can be easy to identify. It could be the gold trim on an Audi S6 or even the A1 ordered alongside a Kobe steak. Defined, it's an inability to spend in a way that fits the mores of the new social strata, or as old...

Roundtable - Surviving Auctions: Navigating the auction process has become nearly as important to dealmakers today as negotiating the deal.(Discussion)
July 1, 2008... Proprietary deals do happen, although few buyers today can consistently count on it. As an alternative, the best investors have figured out a strategy to work within the auction process. While price is usually the differentiator that matters...

Out of the Spotlight: Hedge funds were among the primary drivers of the M&A boom. Today, they remain active, but their roles aren't as prominent as they were 18 months ago.
July 1, 2008... The convergence of alternative assets has largely been a boon to M&A in recent years. Hedge funds, in particular, were a key factor fueling the market, using flexible mandates to assume roles as wide ranging as lender, buyer, venture...

A Good Gamble? A few notable bankruptcies in the gaming space have distressed buyers thinking opportunity.
July 1, 2008... Whenever the economy softens, investors seeking refuge will often turn to the sin industries. The thinking, of course, is that smoking, drinking and gambling are recession proof. Recently, however, a chalk outline has been drawn clearly...

Dividend Recaps Seen in Better Light: Martin Fridson unveiled a new study that dispels doubts about potential credit problems associated with dividend-yielding recapitalizations.
July 1, 2008... Dividend-paying recapitalizations have been a sore spot for the private equity industry, as the investment community and marketwatchers at large tend to heap criticism at the very concept of a dividend recap. A new analysis of LBO bond and...

A Ray of Light? LBO finance mart perks up as new deals start to launch, though activity still tends to be focused around the small deals.
July 1, 2008... "LBO speculations are back." So claims a recent "Round Up" report from Citigroup Bond Market. "It strikes us that there is still an appetite for leveraged paper to be sold with respect to some of the larger LBO deals that still have not...

Talking Infrastructure: Robert Aguallo Jr. discussed the trends that brought him to Cardinal America Funds, a vehicle that is focused exclusively on companies that play into the burgeoning infrastructure market.(Cardinal Americas)(Interview)
July 1, 2008... By some estimates, the United States will require roughly $1.6 trillion of investment into its infrastructure over the next five years. Considering the budget quandaries facing many states and even the federal government, the opportunity for...

Scraping By: Private M&A negotiations in recent years have increasingly involved a pro-buyer provision, the "materiality scrape." Lawyers from Goodwin Procter help explain what that means.
July 1, 2008... Long ago, in markets that now seem prehistoric, the back and forth between buyers and sellers concerning representations and warranties in private M&A transactions was relatively simple. Buyers asked for representations, sellers made them,...

More Fallout: Big heads continue to roll thanks to the credit crunch, although recruiters were busy this spring bolstering select areas, such as global offices or restructuring teams.
July 1, 2008... Wall Street continues to deal with fallout from the credit collapse, as Wachovia forced out Ken Thompson from the CEO role at the bank. The move came after the bank lost more than $700 million in the first quarter. Also, Bear Stearns veterans...