“Boards Hungrier For M&A This Year”
In the February 1, 2010 issue of Agenda, Booz & Company Senior Partner Gerald Adolph (North America) said that financial components for mergers and acquisitions (M&A) are healthy and presenting a somewhat improving market for M&As. Many companies have cash reserves, while currency for deals is available, debt capital is affordable, and stock prices are up, said Adolph, “so there’s some firepower you can get your hands on to make acquisitions.” But Adolph doesn’t expect private equity buyers to return to pre-recession numbers because “the financial fuel” such as covenant-free debt—isn’t going to reemerge. Moreover, he said that a slow economic recovery means that boards won’t approve acquisitions they weren’t considering already. So even as the market has improved somewhat, Adolph predicted that M&A volume would not rise significantly from 2009.