May 2008 Blog Posts (8)

Roger's Corner: If You Got the Cash, Now's the Time

With oil at $135 a barrel and climbing, a stalled Fed and continuing credit market woes, the knee jerk reaction would naturally be that this is a bad market for any sort of M&A deals. Recently, however, the Boston Consulting Group (BCG) concluded an analysis of 408,076 transactions. The report found that buyers perform best in downturns. The report also found that downturn divestitures help sellers as well; with returns increasing to 13% on average.



Corporate deal teams, such as… Continue

Added by Roger Aguinaldo on May 22, 2008 at 10:30pm — No Comments

Roger's Corner: Big Deals can Say A Lot



I don’t typically comment on big deals. I do consider HP’s purchase of EDS, however, a bell-weather for many middle-market M&A Deals. The $13.9 billion transaction, at $25 a share, is anticipated to close by year’s end. This deal will more than double HP's services revenue, which was $16.6 billion for 2007. The two companies' collective services businesses, at the end 2007 fiscal year, saw annual revenues topping $38 billion. The revenue… Continue

Added by The M&A Advisor on May 16, 2008 at 3:05pm — No Comments

HP-EDS: The Strategic Acquisition is Back!

Today, HP announced a friendly $13.9 billion acquisition of information technology software and services company, EDS. This marks the official return of the strategic acquirers coming back into the M&A market.



Certain factors are contributing to making the environment for strategic acquirers prime:

-- Low relative valuations

-- Private equity/financial buyers absent from the market

-- Credit crunch limits wherewithal of highly-leveraged transactions and growth of… Continue

Added by Roger Aguinaldo on May 13, 2008 at 8:02pm — 1 Comment

XM-Sirius: A Combination that would Create a Monopoly

XM- Sirius: Why the FCC is taking its time



A combined XM/Sirius would constitute a satellite radio monopoly, prohibited by the FCC's original 1997 Order establishing the Satellite Digital Audio Radio Service (SDARS).



The FCC has been waiting for the Department of Justice (DoJ) to potentially prevent the deal on antitrust concerns so it would not have to go against its original order. Although I don’t necessarily agree with the DoJ’s decision to approve the deal, the… Continue

Added by Roger Aguinaldo on May 13, 2008 at 12:10am — No Comments

Roger's Corner: What M&A Deals?

Despite cheap money the US economy continues to wobble as we enter the second half of 2008, impacting middle-market M&A deals directly.



In March non-farm payrolls fell for a third straight month and the unemployment rate rose. US construction and manufacturing also took big hits, accounting for March decline in payrolls. Business activity has also slowed but personal spending continues a steady, if lesser, pace. On the plus side, the housing market, which accounted for a 1% loss… Continue

Added by The M&A Advisor on May 9, 2008 at 8:00am — No Comments

Roger's Corner - May 2, 2008: Is 2% a Saving Deal?





How many rate cuts does it take to stimulate growth? The answer to that question remains to be seen. Yet this Wednesday the Fed cut rates again for the seventh time. The overnight lending rate is now at 2%. So, is two percent low enough to revise or save pending middle market M&A deals? The markets answered this week with no reaction.



While some on Wall Street argue that the credit crisis is easing up, in a still tight credit market and a declining housing… Continue

Added by The M&A Advisor on May 4, 2008 at 11:30pm — No Comments

Even With Liquidity Crunch, Pharma Sector Keeps Dealing

I was quoted in Investor's Business Daily regarding M&A in the Pharma Sector. Here's the relevant info:



Health care companies are always looking to add to their product lists through acquisition. But after spearheading a slew of deals thanks to an abundance of cheap credit, private equity buyers are now nearly non-existent due to a lack of capital.

Many of the health care industry's biggest players have looked at the landscape, realized that opportunity, and…
Continue

Added by Roger Aguinaldo on May 4, 2008 at 10:04pm — No Comments

USA Today: Wrigley deal shows it's a great time to buy



By Matt Krantz, USA TODAY



Monday's $23 billion buyout of chewing gum maker Wm. Wrigley Jr. (WWY) by Mars and Warren Buffett's Berkshire Hathaway (BRKA) is giving investors something to chew on.



The credit crisis and worries about the economy may be cooling merger-and-acquisition activity this year, causing the dollar volume of U.S. deals to fall 32%, Dealogic says. But as Wrigley — the third-largest deal of the year… Continue

Added by M&A Advisor Info on May 1, 2008 at 10:00am — No Comments

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