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At The Deal's M&A Outlook 2009 conference on Wednesday, attendees were very clear in saying there was much work to do in this shaky deal environment, such as creating crafty ways to finance.
David Turner, managing director and head of private equity at Guardian Life Insurance Co. of America, gave his kudos to
the small folks. He said the difference now versus 2001 and 2002 is
that the micro guys are more sophisticated and they will hold off from
dealmaking until things recover. Turner added he's also taking a long-term look of about four to five years on investments.
Tom Callahan of Lincolnshire Management Inc. agreed with Turner's logic. "We've been sitting on the sidelines for 18 months, and we can still wait but there are deals to be done -- we'll do add-ons and grow current businesses." Jonathan Peskoff, managing director of investment banking in the M&A group at FBR Capital Markets Corp., doesn't think the wait is long. He thinks we'll see an economic recovery in late 2009. Turner noted the four to five capital calls a week he's seeing instead of robust numbers he was used to. "That will last through next year," he said. Hamilton Crawford of Houlihan Lokey chimed in: "You also won't see people raising megafunds to retain talent. They will figure out ways to play with the financing -- not evade taxes, but they'll need to get creative." Peskoff said some entrepreneurs want to take advantage of capital gains. They might do deals quicker rather than wait 12 months. Rothman noted that for companies, deleveraging is a focus in addition to creating transparency. As for President-elect Barack Obama, Rothman said we have to look at tax policy. "Until the economy starts to uptick, we won't know how tax and regulation policies will affect things." Turner will stay tuned as well. He said, regulation-wise, you must watch signals -- every move and every comment counts. Turner continued, "For the new administration's role in small business, we heard Obama say he will make money available for green technology. There's probably an opportunity here for strong policy measures for pro-business measures we should and will look out for." - Baz Hiralal Categories Deal Video
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