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stories filed under: "m&a"
Deals

Deals

by Joseph Weisenthal


Filed Under:
credit, m&a, private equity



Pockets Of Private Equity Still Very Much Alive

from the dealflow dept

Fears of a credit crunch have put a chill on fresh private equity activity, while several pending deals are thought to be in trouble. But there are still signs of life in some parts of the industry. There continues to be strong interest in medium-sized media deals, as funds that specialize in this area continue to raise money and make moves. Considering the challenges facing many media companies, it makes sense that private equity investors would think there's an opportunity to pick up assets at a bargain, reformulating them into something of more value. Obviously, the private equity industry isn't going to grind to a halt. Deals that are predicated on nothing more than cheap credit will become rare, but investors will always be on the hunt for undervalued companies that can be turned around.

1 Comments | Leave a Comment..

 
Deals

Deals

by Joseph Weisenthal


Filed Under:
m&a, private equity

Companies:
alltel, clear channel



Market Not Buying Recent Buyout Deals

from the about-that-offer... dept

It's easy to forget that just because a buyout has been announced, there's no guarantee that it will actually go through. Pending private equity deals are particularly vulnerable at the moment, because they're all debt financed. One good way to get a sense of whether the market is expecting a given to go through is to look at the current market price of a stock compared to the buyout price. The wider the gap, the less likely it'll actually happen. These gaps are getting pretty wide on a number of deals, including a few discussed here. The purchase of Clear Channel was announced last November, but today the stock trades at 37% below the offering price. Alltel is in a similar boat, trading 22% below the buyout price, which was just announced in May. It's still possible, of course, that both of these deals will get done. But if current conditions persist, we may see them hang around in their current form for a bit longer.

4 Comments | Leave a Comment..

 
Deals

Deals

by Joseph Weisenthal


Filed Under:
m&a



Just In Time For Expected M&A Drought, Here Come The Demergers

from the spinoff dept

The credit crunch may put some M&A activity on ice, but don't expect investment bankers to go hungry anytime soon. According to a recent survey, global executives expect to see plenty of demergers -- the practice of spinning off or selling business units. Of course, these things go in cycles. After any period of consolidations, bankers will encourage companies to "unlock shareholder value", by spinning off all of those units that were acquired during the previous wave. Undoubtedly, the executives predicting more demerger activity have been influenced by what their investment banking partners have advised them. In addition to the cyclicality of this, there's another reason to expect more of this activity. Selling off business lines can serve as a substitute for selling bonds when credit markets aren't being cooperative.

5 Comments | Leave a Comment..

 
The Market

The Market

by Carlo Longino


Filed Under:
ecommerce, m&a

Companies:
ebay, kijiji, skype



eBay's Core Auction Business Is Looking Like A Drag

from the show-me-the-money dept

eBay has reported its latest quarterly earnings, and like Intel's latest results, they offer something of a mixed bag. eBay's revenues and profits are up strongly, but its auction business is stagnating. While it showed revenue growth in the quarter, that's attributed to currency effects and increased commissions for sellers, rather than growth in the number of listings or the value of goods sold. eBay's been able to generate growth by expanding its scope of operations, which is certainly helpful, but the weakness in its core auctions business remains a concern. Questions still remain about some of those expanded operations: for instance, though Skype's earnings grew, usage is flat. But perhaps the bigger problem for eBay is that it's struggling to get the new units to feed off of each other. Buying PayPal was a masterstroke for the company, since a simple and comprehensive payments system delivers benefits to (and derives benefits from) the auctions business. But other new businesses don't integrate so well. Part of the justification for buying Skype was to ease communications between eBay auctions' buyers and sellers, but that hasn't panned out, or turned into a money-spinner. Similarly, some observers say the US launch of its Kijiji classifieds site will drive usage of Skype and PayPal, but judging by the Skype acquisition, that's far from being a sure thing. Clearly eBay's got the ability to get some M&A work done, but its ability to meaningfully integrate its purchases to spur growth among its other businesses still isn't so clear.

23 Comments | Leave a Comment..

 
Predictions

Predictions

by Joseph Weisenthal


Filed Under:
m&a, software

Companies:
ibm



How Strategic Acquisitions Go Awry

from the small-deal dept

The software space has seen quite a bit of consolidation over the last few years, with Oracle's aggressive acquisition spree standing out. Just today it announced the purchase of yet another company, this time in the security space. IBM has made a number of deals as well, as it looks to bolster its high-margin software business, the unit that's largely responsible for its continued profit growth. Yesterday, the company announced the purchase of Data Mirror, which will bolster its business intelligence offerings. The purchase is not so much about growth, but about adding functionality to its existing offerings. But as Rick Sherman points out, there's a downside to these small, "tuck in" acquisitions: they create complexity. It's not so simple to just buy a line of software and meld it into an existing product, as any major enterprise software vendor can attest. Therefore, it's entirely possible that the customers of Data Mirror (or any company in a similar boat), could look for another simple, lightweight solution that isn't tied into some larger, behemoth.

5 Comments | Leave a Comment..

 
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