Compass Report--The State of M&A

The consolidators who numbered about 15 on January 1, 1999, amounted to no more than five or six at year-end. Some of those consolidators that remain active can be characterized as passively interested or highly selective. Only three buyers can be characterized as aggressive.

Some of the consolidators have developed integration indigestion. One consolidator told us, "We are suffering from a sophomore slump: We have not been able to improve our earnings and we haven't learned how to manage former owners who are now our plant presidents."