Consolidation--The Juggernaut Hits the Wall

If that arbitrage dis-appears, consolidation stops."

But while the trouble may be most visible on Wall Street, Carl Norton, chairman and CEO at Houston-based Nationwide Graphics, thinks much of the blame belongs in the industry's own back yard.

"Too many companies were getting funding in order to make acquisitions," he explains. "Many were making acquisitions without an adequate amount of due diligence and, along the way, acquisition prices were being pushed up past reasonable levels, requiring significant capital investment. Some companies were more intent on the number of companies that they had acquired, rather than integrating the acquired companies into the acquiring company. Others were acquiring companies without any apparent thought as to where they were located. Companies not located near any other company that has been acquired still have to be managed."