It’s a buyer’s market again. You may be asking yourself, "What planet is this guy from?"
There’s no question deal making has fallen off substantially in 2001. Thomson Financial reports a 62% decline in M&A activity since 1Q 2000. Uncertainty surrounding the two FASB rule changes discussed in this newsletter has contributed to slowing M&A activity. And, yes, the events of September 11 have further depressed a market that was already weak.
But the real drags on M&A activity are weak stock prices and falling profits. And that’s the opportunity. Because with bankruptcy filings on track to surpass 1998’s record-breaking year when 1.44 million new cases were filed, there are opportunities for profitable companies to acquire struggling companies that fit strategically for cents on the dollar. Or for two successful companies to merge and increase market penetration during the downturn.
