Our contacts at Nixon Peabody LLP alerted us to a Mergermarket Group survey they commissioned, "
M&A Executive Insights 2008," which showed the split between private equity execs and strategic dealmakers on the impact of the credit crunch. As you know, midmarket deals will be a driving force in 2008 -- survey says the technology and financial services sectors will be the ones to watch.
While corporates and PE dealmakers generally agreed on overall market conditions, the question of exceptions to a material adverse change clause, or
MAC clause, drew a significant difference of opinion. According to the survey, PE respondents were relatively bullish compared to their
corporate counterparts, with 71% considering that exceptions
(e.g., for sellers failing to meet revenue or earnings projections) would rise. Only 43% of strategic respondents echoed that sentiment. One respondent said that he thought exceptions
would decrease because "there would be more guarantees in
place [during dealmaking] as the U.S. economy heads into a
recession."
- Baz HiralalGet a copy of the credit crunch M&A survey
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Juergen Lasowski
And the winners are...
