There are companies available on the cheap right now. For companies that keep a long-term perspective, this slowdown presents real opportunities to buy other companies, said Patrick A. Gaughan, a business professor at Fairleigh Dickinson University who has written books on mergers and acquisitions. Historically, economic slowdowns have been periods of decreased merger activity. Slumps are times when companies seek to retrench, and mergers and acquisitions are ways of growing, Gaughan said. And if the current tough times persist, that trend is likely to hold true, he added.
Some analysts see last week s spurt of deals as an aberration.
Sellers are generally still into denial about their valuations, and buyers are waiting for the full shakeout to occur, he said, adding that uncertainty about how changing accounting rules would treat the amortization of goodwill is slowing some larger deals. But for some buyers, with the value of many technology companies off 90 percent or more from their highs, the bargains are too good to pass up, especially for companies with cash on hand. And many struggling technology firms consider being acquired by a larger or healthier competitor the best remaining exit strategy. The hardest part, say some analysts, may be finding the appropriate currency with which to make deals. When technology stocks were more valuable, companies could readily snap up smaller competitors by issuing more of their stock.