M&A REPORT -- New Era of Consolidation

"When we evaluate a company, we're not only going to look at if it's accretive to earnings, but will use a more stringent filter—'Will we return an acceptable level of return on the investment?'—which will be 12 percent after-tax return. It's a much tighter filter than being accretive to earnings."

Unlike the previous generation of M&A activity, Reilly expects to see "a higher level of integration involved, with more emphasis on the operating and customer benefits of the acquisition versus, in the past, they tended to be more financial. Secondly, the prices that people will be paying will be lower."