What are these rumors about M&A collapsing? Forum

[Perseus_I]

I am curious where, besides word-of-mouth, these rumors are coming from. What is happening, which markets, and where can I go to read up on it?

Thanks!

[FlanSolo]

I am curious where, besides word-of-mouth, these rumors are coming from. What is happening, which markets, and where can I go to read up on it?

Thanks!

Tag.

[rayiner]

http://www.mergermarket.com/pdf/Press-R ... 1-2012.pdf

[top30man]

M&A traffic is down overall, especially in key sectors, eg high tech.
http://m.techcrunch.com/2012/05/16/inte ... ls-q1-2012
I would think "collapse" is going too far.

[BruceWayne]

Not to be an ass, but just using common sense, whenever the economy is going poorly M&A seems like it would be the very first thing to go. It's one of the things that has always made me uncomfortable with it even though I like it as a practice area.

[Perseus_I]

Not to be an ass, but just using common sense, whenever the economy is going poorly M&A seems like it would be the very first thing to go. It's one of the things that has always made me uncomfortable with it even though I like it as a practice area.

Yeah, point taken. We've had sluggish growth since the Obama-Bush recession "ended" in June 2009. I wasn't under the impression that the economy as a whole became significantly weaker this year than it has been for the past 3 years. It's been weak all along. So M&A dropping suddenly would be newsworthy.

EDIT: It looks like energy is still strong. *Fixes bid list to add more Houston firms.*

[Anonymous User]

It's not necessarily the first thing to go. A lot of companies have pretty significant cash reserves/liquidity so they don't need to bother with the lending aspect of M&A for too many deals. They're more insulated from the economy as a result and, moreover, their target acquisition may be weakened by the economy, thus making them ripe for the picking. I know that at my firm, this is exactly the kind of deal we've been seeing a lot of lately.

[nonprofit-prophet]

Not to be an ass, but just using common sense, whenever the economy is going poorly M&A seems like it would be the very first thing to go. It's one of the things that has always made me uncomfortable with it even though I like it as a practice area.

Yeah, point taken. We've had sluggish growth since the Obama-Bush recession "ended" in June 2009. I wasn't under the impression that the economy as a whole became significantly weaker this year than it has been for the past 3 years. It's been weak all along. So M&A dropping suddenly would be newsworthy.

EDIT: It looks like energy is still strong. *Fixes bid list to add more Houston firms.*

I spoke to some guys at VE and they said their energy M&A work is "hot right now." Definitely bid Houston. I'm focusing on Dallas, but the firms I'm looking at still work closely with their Houston offices.

[FlightoftheEarls]

Not to be an ass, but just using common sense, whenever the economy is going poorly M&A seems like it would be the very first thing to go. It's one of the things that has always made me uncomfortable with it even though I like it as a practice area.

Yeah, point taken. We've had sluggish growth since the Obama-Bush recession "ended" in June 2009. I wasn't under the impression that the economy as a whole became significantly weaker this year than it has been for the past 3 years. It's been weak all along. So M&A dropping suddenly would be newsworthy.

Well, M&A came to a grinding halt in Q3 of last year with the debt ceiling debacle and the increasingly teetering European zone. That seems to have persisted from August and it seems to still not have completely settled yet. I would expect that it will increase again, but looking at the league tables it's quite clear how much U.S. M&A has dipped so far this year. The firms that are normally at the top of the table in the U.S. are all still in the top 15 or so, but the frontrunners are largely the enormous multi-national firms that are pulling in M&A from lots of places (some of the big magic circles, Skadden, Jones Day, etc.).

There's hope that M&A will continue to come back over the next few months, but it's just been slow to do so. For a slightly more recent link than Rayiner's, here's the H1 2012 league tables: http://www.mergermarket.com/pdf/mergerm ... H12012.pdf

[sundance95]

Is M&A traffic traditionally a leading indicator for corporate generally? Was it first to go in the lead up to 2008?

[lnoy]

After every valley, hopefully there is a peak.

[Anonymous User]

RESTRUCTURING AND DEBT FINANCE ARE WAY UP RIGHT NOW! BID WEIL AND KIRKLAND. BID! BID! BID!

[shock259]

http://www.mergermarket.com/pdf/Press-R ... 1-2012.pdf

Thanks for this - very helpful.

M&A vs. bankruptcy. Hmmmmmmmmmm

[Perseus_I]

Funny, I was just advised by a bankruptcy judge NOT to do bankruptcy--but to do corporate-- because the market for bankruptcy has been down. Maybe he was going off old news?

The ideal job security would involve becoming an expert in BOTH M&A and bankruptcy.

[Anonymous User]

Funny, I was just advised by a bankruptcy judge NOT to do bankruptcy--but to do corporate-- because the market for bankruptcy has been down. Maybe he was going off old news?

The ideal job security would involve becoming an expert in BOTH M&A and bankruptcy.

Depends where you are. BK workflow is definitely slower right now -- but if you are at Weil or K&E, you just end up sucking up the work that other firms would normally get and also shift part of the practice to creditor work.

[FlightoftheEarls]

http://www.mergermarket.com/pdf/Press-R ... 1-2012.pdf

Thanks for this - very helpful.

M&A vs. bankruptcy. Hmmmmmmmmmm

http://www.mergermarket.com/pdf/mergerm ... H12012.pdf

Seriously, use the legal one. It's more up to date, too.

[piccolittle]

Obama-Bush recession

"ended" in June 2009

Eh?

[rayiner]

Funny, I was just advised by a bankruptcy judge NOT to do bankruptcy--but to do corporate-- because the market for bankruptcy has been down. Maybe he was going off old news?

The ideal job security would involve becoming an expert in BOTH M&A and bankruptcy.

The ideal would be at a firm that has well-diversified, counter-cyclical practices and staffs conservatively so it doesn't have to hire and fire when work shifts around. I'm not sure such a firm exists.

[sunynp]

I know at Weil people from corporate get staffed on restructurings and re-orgs, it isn't just the bankruptcy people.

[Anonymous User]

Is M&A traffic traditionally a leading indicator for corporate generally? Was it first to go in the lead up to 2008?

A lot of areas of corporate work are experiencing a slowdown. FB basically destroyed IPO work for a while at least. Apparently Bay Area firms are anticipating that there will be an increasing number of down rounds in VC financing deals in the next year, which I'd imagine will lead to a slowdown in the flow of those deals.

In short, it doesn't seem dire, at least not yet, but I'd anticipate corporate generally to have a worse year this year than last.

[Anonymous User]

I'm summering at a v15 in NYC and out corporate dept is swamped

[Anonymous User]

I'm summering at a v15 in NYC and out corporate dept is swamped

I'm the poster immediately above this.

Ours has been crazy this summer too, but it was slow earlier in the year and talking to partners they seem to be anticipating more of the same.

[Anonymous User]

I know at Weil people from corporate get staffed on restructurings and re-orgs, it isn't just the bankruptcy people.

Well yes, this is how debtor's-side BK works. They QB the process and pull in corp/tax/ERISA/lit people as needed. But for the OCI goer, you want to express interest in groups that work is originating from. Plus, only Weil and K&E have truly massive Debtor's-side practices.

[itbdvorm]

fwiw, i'm at one of the firms that had a pretty sizable drop in the mergermarket study you sent...and our M&A group is busy as hell

[Anonymous User]

M&A associate at V10 here. On track for 3,000 hours this year. Slowdown is expected, but should still be able to bill 2,400. Either way, it's not unwelcome. I need the rest.