Magazine article Global Finance

Strategic Buyers Fuel M&A Opportunities

Magazine article Global Finance

Strategic Buyers Fuel M&A Opportunities

Article excerpt

As the year stretches into its final quarter, 2011 is shaping up to be more of a megadeal market than it has been in the last few years. On the energy front and in the healthcare arena, buyers are ponying up billions of dolían for assets. At the same time, though, acquirers are being more cautious than ever with their due diligence and asset selection.

These were the central themes to Global Finance's webcast, Latest Valuation and Transaction-Structuring Trends in Today's M&A Market. Presented on October 18, the webcast can be viewed on the website of the forum's sponsor - Merrill DataSite (datasite.com) - as well as on GFMag.com.

The three experts comprising the webcast panel were Chris Ruggeri, a principal at Deloitte Financial Advisory Services; Carlo Bronzini Vender, senior partner at Sonenshine Partners; and Randal Stephenson, a managing director and head of the energy, mining and metals, and infrastructure investment banking practices at Duff& Phelps.

Ruggeri noted that insight into value and risk are critical. "Our clients are asking us for greater [clarity] into deal decisions and for really doing deeper due diligence."

Ruggeri added: "We recently completed a survey of about 325 corporate executives, and what we found was a return of transfbrmational deals, [companies shifting] a little further from their core businesses." As such, clients want to be "comfortable with what they're paying for these game-changing transactions," she continued.

Stephenson noted that deal negotiations now involve more complicated valuation metrics: "We're really diving into the forecast cash flows, and that's where the pricing of the commodity on the oil-and-gas side can change the model by two times."

Ruggeri added: "Our clients [say] they're spending a lot more time thinking about future business plans and strategy. …

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