Buying earnings hasn't gone out of style. Look for a wave of EPS-driven deals that promise quick results and a positive impact on earnings. As the economy slows, look for companies in affected industries to attempt to boost earnings and market share by acquiring competitors and taking out significant costs. Leveraged buyouts are becoming less leveraged. Rising interest rates and the continued drought in the high yield debt market are prompting LBO firms to cut leverage in their deals and take a more serious look at minority positions in certain companies, with convertible preferred gaining favor as a financial instrument.
Industry consolidation breeds more consolidation.
But overlooked is the impact on the supplier universe in consolidating industries, where demands for lower costs and supply chain efficiencies are creating a ripple effect that will drive increased acquisition activity in the next six months. With these drivers of continued activity in place, the balance of 2000 has the potential to be another breakthrough year in terms of volume, types of deals, level of activity and competition for transactions that allow buyers to redefine their places within their industries. The group operates from 14 U.S. cities and over 90 locations in Latin America, Europe and Asia. Drawing on the knowledge and skills of 150,000 people in 150 countries, we help our clients solve complex business problems and measurably enhance their ability to build value, manage risk and improve performance. PricewaterhouseCoopers refers to the U.S. firm of PricewaterhouseCoopers LLP and other members of the worldwide PricewaterhouseCoopers organization.