Consolidation--The Juggernaut Hits the Wall

Graham McLean, CEO of Lincolnshire, IL-based Global DocuGraphiX, points out that competition for acquisitions "drove acquisition prices up and many sellers saw this as a good opportunity to sell." And lenders saw consolidators as "very secure because you could always liquidate the company at fairly high multiples, even if they ran into cash flow problems. So the lenders were willing to give additional capital to both public and private companies to acquire more companies."