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Will 2010 be the M&A comeback year?
FMV executive Allan Siposs predicts it could be surprisingly active, and he tells OC METRO why.
By Steve ChurmPublished: January 01, 2010
By almost every account, the worst recession since the end
of World War II is officially over. But has the mergers and
acquisitions drought ended, too? With commercial credit still tight, unemployment stuck in double digits and consumer confidence sorely lagging, doubts about the strength and length of this recovery are everywhere. However, Allan Siposs, managing director and head of Irvine-based FMV Capital Markets, believes a unique set of economic factors will intersect in 2010 that could make the next 12 months surprisingly active for buying and selling companies. A seasoned M&A professional with more than two decades of experience in the industry, Siposs sees potential changes in capital gains taxes and a substantial amount of investment capital that has been building in recent years, which may trigger a rush to buy and sell companies in the months ahead. This is the first in a four-part series advising business owners about everything they need to know – and what to do – if they want to sell in this market.
CHURM: Many economists believe that the recession has ended. What is your perspective?
SIPOSS: Although we are receiving some encouraging news and may theoretically be out of a recession, I remain concerned and do not believe that we are close to being back to “business as usual.” Unemployment remains high, consumer confidence is low, business credit is tight, residential real estate remains weak and commercial real estate remains depressed. I do not think that we can realistically expect a recovery to be quick, or that 2010 will be particularly strong for the broad economy. While there will no doubt be pockets of active recovery, we are likely to see flat to very modest growth in the economy over the next few quarters and, possibly, well into 2011. For most businesses, the current level of activity may be as good as it will be for a while.
C: What is the outlook for business owners who may want to sell or transition their companies during the next 12 to 18 months?
S: M&A activity is down significantly from its most recent peak. However, this does not tell the full story. For companies whose performance remains solid, deals are definitely getting done. Buyers and investors with available cash are looking for opportunities to buy companies, and we have seen increased activity over the last few months.
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of World War II is officially over. But has the mergers and acquisitions drought ended, too? With commercial credit still tight, unemployment stuck in double digits and consumer confidence sorely lagging, doubts about the strength and length of this recovery are everywhere. However, Allan Siposs, managing director and head of Irvine-based FMV Capital Markets, believes a unique set of economic factors will intersect in 2010 that could make the next 12 months surprisingly active for buying and selling companies. A seasoned M&A professional with more than two decades of experience in the industry, Siposs sees potential changes in capital gains taxes and a substantial amount of investment capital that has been building in recent years, which may trigger a rush to buy and sell companies in the months ahead. This is the first in a four-part series advising business owners about everything they need to know – and what to do – if they want to sell in this market. CHURM: Many economists believe that the recession has ended. What is your perspective? SIPOSS: Although we are receiving some encouraging news and may theoretically be out of a recession, I remain concerned and do not believe that we are close to being back to “business as usual.” Unemployment remains high, consumer confidence is low, business credit is tight, residential real estate remains weak and commercial real estate remains depressed. I do not think that we can realistically expect a recovery to be quick, or that 2010 will be particularly strong for the broad economy. While there will no doubt be pockets of active recovery, we are likely to see flat to very modest growth in the economy over the next few quarters and, possibly, well into 2011. For most businesses, the current level of activity may be as good as it will be for a while. C: What is the outlook for business owners who may want to sell or transition their companies during the next 12 to 18 months? S: M&A activity is down significantly from its most recent peak. However, this does not tell the full story. For companies whose performance remains solid, deals are definitely getting done. Buyers and investors with available cash are looking for opportunities to buy companies, and we have seen increased activity over the last few months. |
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