An M & A Season

James R. Thompson, Executive Editor

If current calls from investment bankers are any indication, many companies in our industry may have new owners soon. I can not recall a time in the last few years where I have heard from so many Wall Street types seeking information.

This makes sense-—the PM 40 is near an all time high. M & A activity is greatest at the minimum and maximum of a stock group such as this, not on the way up or down. At the bottom there is capitulation-—existing owners giving up and wanting out at any costs. On the way up, there is hope. On the way down, there is denial.

At the top (and I am not predicting we are at a top, it is just that values in aggregate are very high) the true investor tries to sell out with the philosophy that the business is never going to be worth more than it is today.

Of course, each company faces its own valuation curve. Some are doing very well and some just so-so. But if the big picture is correct, expect many new owners over the next 12–18 months.