M&A slow, but may be ready to bust out - Business First of Buffalo:

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The problem is getting sellersto close. “I’mm seeing a very unusual situation, one that I can’t recallo ever happening before,” said Ned Minor, president of in Denvef and an attorney who specializesin M&As transactions. “Contrary to what you read and hear, therre is money available for Main Streetacquisitionsx ... Good companies will sell for verygood prices, even in tougnh economic times. “But I’m mystified because when I explaijn all of this to businesdowners ... I can’t make them come to a They’re just absolutely paralyzed.
” Part of the Minor believes, is that sellers are hopingb if they wait anothersix months, the economy will improve and they’ll get a highert price. Buyers are skittish, too, according to Hendrik a partner atin Denver. Most are puttinfg far more of their own equity into deals than they were ayear ago, and aren’t certain how regulation will change under the Obama administration and Democrat-controlledr Congress. “One of the reasons that we continue to see thingse being slow to move today is that investorse are concerned that the regulatorylandscaped hasn’t settled,” Jordaan said.
“Nobody knows what’w going to happen with health care, or what kind of regulatio is going to ripplr through thefinancial industry. “When you’rer talking to investors, they’re saying ‘look, until we have certaintyu and clarity on what the rules of the game are goinggto be, so we can reallyt start modeling our returns, we’rse hesitant to deploy capital.’ I think you’re goinfg to start seeing capital move ... in the second half of 2010.” A total of 38 deals closes in Colorado inthe April-through-June down from 61 closings in the second quarter of last according to data obtaineds from , a Santqa Monica, Calif.
-based provider of M&A information. Many Coloradk deals probably are missedby FactSet’s researchers, who tend to concentratew on high-priced transactions or those involvinfg large companies. Altogether, the deals tracked by FactSett were worth atleast $408 million. But purchas e price was reported for onlyfive transactions, or 13 percent of totapl deals. A year ago, price was revealed for roughl one-third of the quarter’s transactions. Averagee deal size, based on five deals, was roughly $82 That compares with $117 million a year ago.
“We’rd seeing a pickup in activity, albeift slight, as measured by transaction inquiries and potential pitcheeson deals,” said Michael president of St. Charles Capital, a Denver-based investmentf banking firm. “We’re quite but getting deals doneis difficult. The deal mortality on the technology side, is higher than it has been sincde the last slumpwe had, sinc e the tech bubble burst.” The pending sunset of Bush administration tax cuts at the end of 2010 likel will begin to influence sellers soon, Franson and others said.
Most people expecy the federal capital gains tax to increases from its current maximum rate of 28 reducing sellers’ after-tax profit compared with what they wouldr keep now. “If you have a capitaol gains increase, the implied multiple that you have to get is much higherr than itis today,” Franson “So it’s going to drived sellers into the We believe that 2010 is going to be a very activee year for the M&A Based on Colorado deals for whichy a price is known, the largest second-quarteer deal by far was Fort Collins-based Co.’s WGOV) $356 million acquisition in Apripl of , a Santa Clarita, Calif.
-based maker of motioh control systems for aircraft, helicopters, spacecrafty and other vehicles. Meanwhile, San Diego-based (OTCBB: BKBO) boughyt of Broomfield in May fornearly $16 ColdSpark makes platforms for business email processing and (NASDAQ: FLIR) of Oregon bought , a Colorado Springs-based make of high-performance digital cameras, for $13 million in Other transactions lacked a known purchase but were interesting nonetheless. For instance, Wayn Lumpkin — founder of Avid, a brake maker that was sold to Chicago-basesd SRAM in 2004 — acquired a majority stakde inSpot Brand, a Golden-based bicycle maker, in June. based in Louisville, forged a deal in May with N.J.
-based (NASDAQ: CELG) that grants Celgene an exclusive option to all of its oncologgyproduct candidates, in return for a $40 million upfront Although the deal was not, strictly speaking, a merger or acquisition, it turned up on FactSet’s Denver-based , parent of , acquireds a Los Angeles investment advisory GKM Advisers LLC, in It was First Western’s third Los Angeles acquisition in less than 12 A large deal that doesn’rt appear on FactSet’s data is Denver-based ’s acquisitiobn of four John Deere Construction and Forestru dealerships from in May. Purchase pricwe wasn’t revealed, but Honnen Equipmentf Co.
President Mark Honnen has characterizef it asa “nine-digit” or somewhere in the hundreds of millions of