CONSOLIDATORS - Slowing, but Growing

PI: What were some of the biggest mistakes that have been made by industry consolidators?

Norton: Many industry consolidators bought companies at ever increasing multiples as if there was no tomorrow.

Davis: Any time you're in the acquisition business—growing the company—you have to do it very thoughtfully, very carefully, and you have to structure transactions so that both the seller and the buyer benefit. It can't be one-sided transactions. And it has to be a reasonable price and a reasonable expectation of future earnings. Some of my competitors in the consolidation business didn't have the experience in the industry that we have and, because of that, they made some mistakes.