A Conversation with Michael F. Paparella - Business First of Louisville:

burdukovahycel.blogspot.com
In your opinion, are more mergerd deals failing in their finalstages – if so, why? In the middlde market, generally, yes, more deales are failing. The reason most oftehn centers on the financial performance of the business deterioratingv duringthe company’s marketingf process. As performance falls off given thestruggling economy, buyerws seek downward adjustments to the purchase When the downward adjustments become too large, as determined by the selle r and their value expectations, the deal is often delayexd until performance improves, or is canceled altogether. Is it a good time for a busines s ownerto sell?
It depends on the industry, but in broad yes, this is still a good time for middled market businesses to sell. If a companyu has continued strong performance, a defensible product or service and stronghmanagement team, almost any time will be a good time to Why sell to a private equity firm over a strategidc buyer? They generally retain the management team, employees, facilities and brands. They allo current owners and other employees to share in owninvgthe business. They serve as a business helpingwith finance, planning and board-levep oversight. Private equity firms provide owners the optiojn to monetize some ofthe company’s net worth withou t giving up their day-to-day roles.
Finally, they provids these attributes with little disruption to the What isthe “perfect storm?” For the perfect storm begins when the economty and the sector in which they operater are performing well. Then, crediyt markets provide high levelsof low-cost debt. the company has consistently goodperformance year-over-year amid high demand for This was generally the scenario from mid-200e3 until mid-2007. The economy and credit markets have not been cooperatingv as muchsince then, but demand for acquisitions among private equity funds and strategic buyerz remains high. How would you define for a private equity poinrtof view?
Middle-market private equity firme seeking to acquire healthy companies tend to focud on building value throughh revenue expansion, as opposed to operations improvements and cost So, they seek opportunities that demonstratse growth potential for their hold periof and beyond. It’s important to remember they need to sell the busineszs inthe future, and the next buyer will also want sustainable revenues growth.