A deal ode to Christmas

Christmas is coming, the goose is getting fat
Please put your deal fees in your advisor's hat.
Deal levels are much lower than in previous years,
M&A Advisors are hitting city streets shedding many tears.

This will be my last blog before Christmas and I sincerely hope that when I return in the New Year that the end of year flurry of deals that has traditionally happened is forthcoming this year as well. At the moment global deal levels are looking like they will definitely not surpass last year in terms of announced deal value. Announced deals currently stand at around US$2.9 trillion, which is comparable with figures last seen towards the end of 2005.

I have just spent an hour enjoying a glass of mulled wine (or two) and the company of a friend who is an SME corporate finance specialist, and the outlook wasn’t very festive. He maintains that for smaller companies deals are still hard to come by and financing them is still incredibly difficult, most of his work this last year has been dealing with distressed sales. To quote him, “all the banks are interested in doing is using funds to try and buy back their own shares and get out from under the control of the government”.

This sentiment does tie in with the fact that not only are total deal values lower but deal numbers have been very low, suggesting that the deals that are getting done are those of higher value rather than many low value deals.

Anyway, I will read the FT with interest over the next couple of weeks looking for the end of year flurry of deal announcements in the hope that my first blog in 2011 will be to report that 2010 didn’t end as badly as we thought it might.

A Merry Christmas and a Happy New Year to you all.

Filed under: lending, M&A, SME, advisors