What’s Fueling M&A Fever?

Large, public companies tend to have large revenue bases, often upwards of $10 billion. An acquisition that provides 10 percent organic growth would need to deliver around $1 billion in new annual sales, limiting the transaction to a complex, multiple-acquisition deal.

Plus, any transaction with the majors must be accretive; it’s not just about adding to the revenue base, it’s about delivering new opportunity. And you must be willing to relinquish control. Before considering this option, look at the company’s trading price, and understand it will pay you at a multiple less than its own.