The Deal's middle-market editor Nathaniel Baker asked panelists at the M&A Outlook 2009 conference on Wednesday where money is flowing.
Jonathan Peskoff, managing director of investment banking in the M&A group at FBR Capital Markets Corp., said in this market he has been the busiest he's been in the last four years. One obvious reason is the credit meltdown. "Valuations are low," he said, "but to build business, private equity firms or cash-rich strategics are coming in and buying small companies. They are providing much needed cash and offering their deep management expertise to build those small businesses out."
On the topic of management, financial services companies have had conservative management, but people are viewing it otherwise, as in the crunch. Peskoff said private equity is more welcome.
He also noted businesses' valuation expectations are coming down as the lasting effects from the credit crunch outweigh their hopes.
David Turner, a managing director and head of private equity at Guardian Life Insurance Co., noted people are getting into bank investments. He said, "I was approached by a group that would like to put a middle-market bank fund together." Turner didn't elaborate beyond that.
Before moving on to another topic, The Deal's Baker noted that on a bigger scope, American Express Co. and Goldman, Sachs & Co. are now banks and GMAC is trying to be a bank, so that would have to yield consolidation. -
Baz Hiralal
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