Deal Maker’s Almanac

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In The Pulse section, market observers were asked to break out their crystal balls to forecast what they believe the New Year will bring. Jason Apple, director, responded with the following answer: “I believe 2011 will be a good year for M&A activity as the deal world is very much a momentum business. Significant PE fund ‘overhang’ and cash-rich corporate balance sheets will help bring about an uptick in demand for transactions. With deal completion at very low levels for the last 18 months, there is increased pressure on senior lenders, sell-side investment bankers and PE professionals alike to justify their existence. PE funds have a large number of portfolio companies that were purchased from 2005 through 2007. These companies need to be sold in order to support new fundraising efforts.

Furthermore, we have seen the debt markets open up for quality assets with stable earnings and strong year-over-year growth. Consequently, people are in the mood to get deals done. While the pace could be choppy early next year as people recover from a flurry of year-end activities, 2011 should prove to be a strong year for M&A.”

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