In a special report on large-cap dealflow, Chaitan Fahnestock of Riveron Consulting is quoted as an expert. Following is an excerpt from the story with Chaitan’s comments:
Most executives agree that valuations, while still tricky to negotiate in a choppy market, have come down since the highs of the merger boom three years ago. Chaitan Fahnestock, managing director at Riveron Consulting, says that based on the deals he sees, multiples are down today from their 2007 and 2008 peaks because less leverage is available from lenders.
“The hardest thing to determine is ‘What is the multiple of cash flow that we’re willing to pay?’” Fahnestock says. “Strategic buyers may be willing to pay more for a specific asset because it has strategic value to them, while a private equity buyer is going to be thinking how can they grow the business and have it become worth more when they sell it.”