STATE OF THE INDUSTRY - Far from Dead

We believe that the consolidators' troubles have not been caused by fundamental problems in the industry, but by issues connected with integrating acquired businesses.

These are management issues, however, and similar to those in any consolidation play where large public company cultures are attempting to assimilate small, privately held, entrepreneurial cultures. There is almost always a performance lapse among the acquired companies while managers learn that public markets are now measuring them. This change in management philosophy never takes among some independent thinkers who now have fat bank accounts from the sale of their companies. In these cases, defections occur and even more time is required to bring the target company up to the buyer's expectation for performance.