Conversations with Thought Leaders from the M&A Community
Tom Turner – Deutsche Bank Principal Finance – Credit Market Update
Posted on July 23, 2008
Disclaimer: The opinions or recommendations expressed are those of the author and are not representative of Deutsche Bank AG as a whole.
Tom Turner is a Vice President in the Principal Finance Group of Deutsche Bank, the world’s sixteenth largest bank ranked by shareholder equity. Principal Finance delivers global expertise across a wide range of markets, industries and asset classes. The Principal Finance group provides leveraged financing solutions to middle market and larger borrowers. It can provide liquidity for both performing and non-performing assets in transactions ranging from $20 million to $2 billion. Acting on a principal basis, DB can execute transactions that otherwise may not be possible in traditional capital markets. Investments take the form of senior, subordinated or mezzanine debt, customized credit derivatives and selected equity.
- Focus areas include:
- Illiquid Asset Financing
- Acquisition financing
- Contract monetization
- Project/Infrastructure finance in developed and emerging markets
- Renewable energy financing
In this interview Tom talks about the current state of the credit markets and gives his insight as to the future course of the liquidity crisis currently underway. Prior to joining Deutsche Bank, Tom was employed on the agency side of the street where he was responsible for managing debt financings in aggregate principal amount exceeding $50 billion.
Length: This audio interview is about 23 minutes long.
Categories: Strategic Buyers, Intermediaries, Merger Integration, Industry Sectors, Private Equity, Financial Planning, Business Sale, Business Acquisition, Negotiation, Valuation, Audio
Tags: acquisitions, cross border M&A, M&A, mergers, mergers and acquisitions, multinationals, Private Equity
Andy Greenberg – Valuing Middle Market Companies
Posted on May 9, 2008
Getting real valuation data on lower middle market acquisitions by private buyers has always been one of the most elusive aspects of the M&A business. While there have always been a number of data services available that highlight the valuation of most public company deals, these sources provide only spotty information on private transactions.
Our guest today is Andy Greenberg co-founder and CEO of GF Data Resources of W. Conshohocken, PA. GFDR is a relatively young company which collects, analyzes and reports on private equity-sponsored M&A transactions in the $10 million - $250 million value range. The firm has analyzed more than 500 transactions, reported by about 80 private equity firms, and provides industry drilldown data in more than 100 NAICS categories and sub-categories.
GFDR was launched by two Philadelphia-based deal professionals, Andy Greenberg and Graeme Frazier, who were frustrated by the scarcity of accurate data on middle market transactions. GF Data Resources offers its reports to subscribers on a quarterly basis and soon will make detailed valuation data continuously available through its website, www.gfdataresources.com.
You can access publically available summaries of information provided to the GFDR’s subscribers by clicking here. One of the most interesting data points that the company provided in its 2007 yearend report is the chart below, which confirms everyone’s suspicion that 2007 was a particularly good year for sellers of middle market firms, notwithstanding the market downturn in the second half of the year. Purchase multiples averaged 6.3 times EBITDA in 2007 plus Buyer’s Transaction Expenses (BTE) which added another 4.4% to the purchase price or an additional .3 times EBITDA.
Length: This audio interview is about 17 minutes long.
Categories: Private Equity, Strategic Buyers, Financial Planning, Valuation, Business Sale, Business Acquisition, Audio
Tags: acquisitions, Business Sale, M&A, mergers, mergers and acquisitions, Podcasting, Private Equity
Doug Rodgers - The World Takes Center Stage
Posted on February 4, 2008
Like many of you in our industry, I have spent the last month trying to understand the impact of the credit squeeze and the equity and debt market declines on the M&A market. I don’t purport to have the answer to where the stock market will be next month or even whether we are going to really have a recession (though my personal guess is that we’ve been in a mild contraction over the last ninety days and if we’re lucky we may already be nearing the end of the slide).
What I do see clearly is that the current events are part of a much larger picture in which the U. S. economy has become a major player in a multipolar world and no longer the dominant economic factor in the world scene. For an interesting perspective on this subject, read Parag Khanna’s article in the January 27, 2008 New York Times entitled Waiving Goodbye to Hegemony.
Even more important to our industry is the coming emergence of the transnational corporation as a dominant force in world economics. I purposely use the term transnational rather than multinational, because these future behemoths will no longer be tied through ownership or political control to any specific nation or even any specific regional bloc. Their operations will be spread around the globe reflecting customer markets and the comparative economic advantages of specific regions such as the relative price and availability of various inputs, including labor, capital and raw materials and the relative friendliness of various political regimes. Headquarters can be anywhere or everywhere and the country of incorporation will depend on factors such as local tax policy and the availability of a supportive legal system. What all of this means to our political and social institutions is best left to others to decipher. What it means to us is that over the next fifteen years we will witness a pervasive wave of cross-border M&A. In industry after industry it will no longer be sufficient to be the leader in a local market, country or even region. Success will require global presence and global presence requires consolidation.
At Focus LLC we are witnessing the early stirrings of this trend today in our own practice. Over the past year and a half approximately half of our closed transactions involved a non-U. S. buyer from countries as diverse as
Length: This interview is about 21 minutes.
Categories: Intermediaries, Industry Sectors, Strategic Buyers, Private Equity, Business Sale, Business Acquisition, Audio
Tags: acquisitions, Business Sale, cross border M&A, M&A, mergers, mergers and acquisitions, multinationals, Private Equity, transnational corporations
Phil Leigh - Trends in Online Technology are Shifting Company Values
Posted on December 16, 2007
M&A doesn’t exist in a vacuum. Companies succeed and fail and fortunes are made and lost based on how well their leaders pick the waves. Choose right and you ride the pipeline all the way to the beach; choose wrong and they’re picking up the pieces off the rocks. Acquirers must be aware of the larger trends taking place in the industries in which they invest and elsewhere in the economy that can impact the fortunes of their portfolio companies and equally important the market’s perception of their value.
Phil Leigh is one of the most insightful observers of an industry that is radically transforming the ways we work and play. Phil’s initial training was in electrical engineering at the Florida Institute of Technology and he subsequently received an MBA from the Kellogg School. As a respected securities analyst with First Boston and Raymond James in the 1990’s, Phil was one of the first analysts to focus on the then emerging world of the Internet. He chronicled its growth from an obscure technology to one of the prime drivers of an increasingly globalized economy; he witnessed firsthand the Bubble and the rubble that followed.
In 1998 Phil began to conduct online interviews of industry leaders via the nascent medium of Internet Radio. Over time these efforts migrated into a full time endeavor called Inside Digital Media (www.insidedigitalmedia.com). Several times a week Phil interviews leading companies in and observers of the Digital Media Industry, covering all aspects of Internet based entertainment and communication and the technologies that support them.
The rise of Web 2.0 - the migration of applications, processing and data storage from the desktop and local network to the Internet - has led Phil to conclude that we are now in another period of major realignment within the technology industry. As with the transformations that occurred when computing moved from mainframes to desktop PC’s and when the rise of the Internet connected all of us to the worldwide digital communications web, there will be big winners and big losers this time as well.
Phil has developed a very compelling theory that the winners in this era will center on several emerging Web 2.0 platforms. He focuses on Facebook, SalesForce.com’s Force.com development platform and Webex’s Media Tone network, but is quick to say that the jury is still out - some of these may falter and other platforms will almost certainly be developed, with Google and Microsoft likely candidates to try. All of this is outlined in much more detail in Phil’s article, Gravitation Attraction in the Internet Cloud, which can be downloaded by clicking here.
Length: This interview is about 25 minutes.
