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See list of top M&A deals of 2009
Though there were more than 1,000 deals in New England last year, both M&A and IPOs were down from 2008 as a result of the recession, according to Mirus Capital Advisors partner Peter Alternative. In 2009, investors had less access to credit, which they typically use as leverage in deals, Alternative said. He said the M&A community is cautiously optimistic about 2010.
“Hopefully, ’09 will be the bottom,” he said.
One encouraging sign is copycat deals. After computer hardware giant Hewlett Packard Co. bought IT outsourcing and backup provider EDS Corp. in 2008, computer-maker Dell Inc. bought IT services company Perot Systems Inc. in September 2009. Also in September, Norwalk, Conn.-based Xerox Corp. bought IT outsourcing company Affiliated Computer Services Inc. Such herd-mentality deals are often a sign of improving M&A markets, Alternative said.
Among the deals that did go down in 2009, companies that have been around the M&A block a few times turned up more frequently than first-time buyers.
“While an M&A deal is always a risk, if you’re a seasoned deal machine like an EMC or a Nuance you’re going to have a thicker skin when it comes to doing deals,” Alternative said.
Cross-border deals are also prevalent on the list, and it worked both ways. Twelve New England companies were acquired by foreign buyers, while 18 foreign companies were bought by New England companies. The weak dollar made some U.S. companies attractive for international buyers, and some U.S. companies eyed acquisitions in emerging markets as a way to grow in a down economy, Alternative said.
“At the end of the day, public companies have to produce growth,” he said.
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