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No money, no acquisitions
September 2, 2008
Global M&A activitiy in the packaging field is down significantly for the first six months of 2008 versus the first half of last year. That should come as no surprise.
Chicago-based Mesirow Financial reports that overall US M&A deal volume dropped 42%. "The days of easy credit that turbo-charged the large private-equity firms last year are certainly gone for now," the firm says in its 2008: Mid-Year Review. Packaging M&As weren't immune, either. That segment saw a 24% decline in deal volume ($15 billion in 2007 compared to $11.4 billion this year). "The drop would have been more dramatic if not for IP's $6-billion acquisition of Weyerhaeuser's containerboard packaging and recycling business," the review says.
Don't look for the second half of 2008 to be much rosier. The credit crunch and its effects on housing, the stock markets, and interest rates will probably mean continued drops in large private-equity deals. Mesirow does forecast, however, better times for strategic and middle-market deals.
It seems to come down to this: When money's tight, it's hard enough to make an acquisition in the first place. So, don't bite off more than you need and make it count stategically.
Posted by Mark Spaulding on September 2, 2008 | Comments (0)