"Theodore B. Polk is managing Director at Citigroup Capital Strategies, and he was kind enough to share his thoughts [with PLI's In Brief] in Acquiring or Selling the Privately Held Company — 2009. The article is a great retrospective on where we were prior to the slowdown and how deals are moving forward. Though written in February, things haven't progressed so much that the value isn't still as good as then, particularly in its generalized description of how markets change when an economy slows. Whereas in flush time, sellers care primarily about the price they will receive for their businesses, when times are tough, they look at price combined with whether the purchaser can actually follow through with the deal. Thus deals that have been getting done do so "because the buyers took advantage of their superior access to capital and welcomed the opportunity to buy well-run operations at a time when others were struggling to do so." Anyway, Polk offers some pointers on the kinds of businesses that look to sell in the current environment and how to get these deals done, regardless of the market conditions. He also looks at what factors will drive a market turnaround. (Hint, higher future tax rates make doing deals now more attractive.) And turnaround will come."
Tuesday, September 22, 2009
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