Industry M&A Activity : Deals Are in Full Bloom

Looking ahead, deal structure is a major variable in the M&A game, with financing a tough nut to crack in dealing with a banking community that does not look upon printing favorably. The road to closing remains a rocky one, according to Cronin.

“Many deals are being done as recapitalizations, earnouts, owner financing or another creative structure,” he says. “For companies with significant banking issues, it is a big unknown as to who controls the sell decision—is it the owner or the bank? Some owners start making calls to competitors and suppliers about selling their company without enough knowledge of the process, destroying their image and value before they even get started. Thus, we have a greater number of issues these days before we reach a closing.”