In This Issue:
- Dealogic’s YTD/Sept. 2102 M&A
- Election Watch: Romney Brings
Attention to Private Equity
- Valuation Accounting & PitchBook
Preparation Just Got a Lot Harder
- Professional Development: Can You
Present to the Board?
- Macro Econ: Chronic Unemployment?
“Just Grow the Economy”
MMIBA Board of Directors:
Dennis Roberts CPA, CVA, ABV, CMAP
Andrew Sherman, ESQ., CMAP
Parnell Black, MBA, CPA, CVA
Richard Jackim, JD, MBA, CEPA
Andy Smith, CPA/ABV, ASA, CVA, CMA
Scott D. Miller,
CPA/ABV, CVA, CMAP
Dealogic’s Global M&A Review
First Nine Months 2012
The Numbers Point in All Directions…
Dealogic has just published its preliminary YTD Sept/2012 M&A Review
and the numbers are all over the map. Literally and figuratively.
Here’s a quick overview of what’s in this highly inconclusive report:
- Global M&A volume reached $1.78T
in first nine months of 2012, down 17% on the $2.14T recorded
during the same period in 2011.
- Global 3Q 2012 volume of $516.2B
was the lowest quarterly total since 3Q 2004 ($467.6B) and
was down 18% on 3Q 2011.
- Cross border volume reached
$611.0B and made up 34% of global M&A volume, the third highest
cross border share on record.
- US targeted M&A totaled
$607.7B in the first nine months of 2012, down 20% on the
same 2011 period ($763.2B), although inbound cross border volume
dropped just 2% to $115.2B.
- Mid-market volume accounted
for 27% of global M&A volume in the first nine months of 2012,
the highest share since the same period in 2004 (29%).
- Oil & Gas led the global sector
ranking with $221.3B and a 12% record market share in the
first nine months of 2012.
You can read the entire 19 page report here.
Dealmakers Have Romney on Their Mind
The Elephant in the Room and Unwelcome Attention
It was ostensibly a forum for private equity execs to mull over
strategies for fundraising and deal making, but no matter where you
turned at last week’s Dow Jones Private Equity Analyst conference in
New York, the elephant in the room was the presidential candidacy of
former Bain Capital head Mitt Romney.
The Republican’s White House bid has made many of his former peers
uneasy about being pushed into the national spotlight, as Democrats
have used the Republican presidential nominee’s private equity past as
a punching bag.
Even former colleagues threw jabs at Romney at the conference, even if
those punches were in a lighthearted manner.
“I’m glad Romney is from Bain Capital and not Goldman Sachs,” joked
Richard Friedman, global head of merchant banking at Goldman Sachs, at
an on-stage interview with Dow Jones’ Shasha Dai.
In many ways, Romney’s candidacy has brought home the increasing need
for transparency in the private equity industry, panelists said.
Steven Klinsky, founder and chief executive of New Mountain Capital,
said firms need to do a better job at airing success stories publicly,
while emphasizing the contribution of private equity-backed companies
to job growth and community development.
“The microscope is on and you can’t just pretend nobody knows this
industry exists,” Mr. Klinsky said.
You can read the entire Wall Street Journal Special Post here.
Valuation Accounting & Deal PitchBook
When is an Asset not an Asset?
“What about the Parking Lot? Seriously.”
If your firm performs valuations and/or M&A deal packaging, you
probably have been following with much interest the new lease
But, do you have any idea how complex they are getting?
For example, when a corporation leases a building, is the adjoining
parking lot automatically included? Or, should the lot be accounted
for separately? Does it make economic sense to count the lot as a
separate asset from the building, since in a typical suburban office
complex one generally doesn’t exist without the other?
Such questions, that would have been considered comical or absurd in
the past, are now critically important, and are getting tougher and
tougher to answer for CFOs and other executives who account for lease
expenses that their companies incur – especially when you consider
that the parties in the debate can’t even agree on such a basic
element as the definition of an “asset.”
In the example above, for instance, is the parking lot an asset owned
by the lessee, or is it simply a piece of rented property? The
confusion stems from...
You can read the entire CFO article here.
Management & Professional Development:
Are You Ready for that Unexpected Pitch to the Board?
Match Your Presentation to Your Audience Attendees
Most of your new client business probably comes from existing
relationships and warm referrals that started with informal and
congenial meetings, and end up with a signed engagement.
But are you prepared for this scenario: An out-of-left-field, last
minute invitation to cold pitch the board and operating executives of
a middle market company? Probably. But admittedly, you and your pitch
team could use some brushing up. If so, here are some quick reminders
from the Harvard Business Review Manage Mentor Program.
Every public speaking expert will tell you to get to know your
audience ahead of time. But what do you do with that information? You
do this: Adjust your presentation to meet their needs in several ways:
- Consider their comprehension.
For example, a presentation to the CFO is going to contain more
quantitative detail than a presentation to the operating managers.
- Include everyone. With a
mixed audience, try to address different perspectives explicitly to
keep everyone interested. For example, "This will affect the
non-equity managers like this... and the shareholders like this..."
- Establish common ground. If
you suspect the audience may be hostile, begin by emphasizing
concerns you share. Turn the negative into a positive, if possible.
Need more help than a few pointers?
The Harvard Manage Mentor offers an online module of its popular
Presentation Skills program.
You can learn about it here.
"There Is No 'Structural' Unemployment Problem."
Or so Says Edward Lazear
Chronic unemployment has been devastating for millions of US families,
the economy, and, consequentially, for those that operate in the M&A
and buyout sector.
The US is suffering through its worst employment rebound in its entire
history. Even the Great Depression labor market rebounded more
If it is not fixed, and fixed quickly, the consequences can be
catastrophic. We only need look at what is happening in Europe where
chronic unemployment is now morphing into civil unrest, the rise of
racist, nationalistic, and fascist political groups, and economies
teetering on the brink of destruction.
And yet, no one – at least according to this editor – has proffered
any realistic solution to the problem the US faces in this regard.
So, when one reads the title of a recent high-level presentation and
academic paper with the headlines "There Is No 'Structural'
Unemployment Problem," it gets your attention.
In his presentation, delivered at the Jackson Hole Economic Policy
Symposium on September 1st, Edward Lazear says to reduce unemployment
"all we need to do is grow the economy.”
Sounds simplistic and trite, but Mr. Lazear may possibly have a point.
Strong emphasis on “possibly.” Here’s why: Most people don’t realize
that 50% of the growth in our current unsustainably high unemployment
came from just three industries.
Mr. Lazear, who was chairman of the president's Council of Economic
Advisers (2006-09), and is a professor at Stanford University's
Graduate School of Business, and a Hoover Institution fellow may be on
to something. At least we hope so.
You can read his provocative findings here.
Attention MMIBA Members:
Share Your News with Your Fellow Members
Share your news in the Middle Market M&A Professional! Please
submit any completed transactions (“Done Deals”), new people added to
your team, office moves, and similar news, to the following email
Important Upcoming MMIBA and CTI Events
Upcoming Live Training
and Acquisition Workshops
San Diego, CA - October 1–6, 2012
Ft. Lauderdale, FL - December 3–6, 2012
Advanced Mergers and Acquisitions Workshop
Atlanta, GA - October 23–25, 2012
Philadelphia, PA - November 13–15, 2012
Las Vegas, NV - December 11–13, 2012
Certified Exit Planning Advisor Program
Chicago, IL - November 5-9, 2012
October 1, 2012
M&A and the Management Buyout
Tuesday, October 2, 2012
The Mystery of Exit Planning
Wednesday, October 3, 2012
Good Business. Good Management. No Buyer. Using an ESOP to Create the
Thursday, October 4, 2012
Using the Exit Planning Process to Create Business Strategy
Friday, October 5, 2012
The Seven Habits of Highly Successful Businesses
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