This is a guest blog post by Jason Cassidy, Asset International’s Senior Vice President of Strategy and Development.
By Jason Cassidy
In the past few weeks we have seen the busiest IPO market all year with IPOs from high-growth companies like A123 Systems in the alternative energy sector and Shanda Games in the Chinese gaming sector. More recently, Blackstone Group announced it would take some of its investments public. Private equity and venture capital firms finally have a public exit alternative again. At the same time, we have also seen some large strategic deals like Xerox and Abbott Laboratories acquiring large companies, and even in an out-of-favor sector like newspapers Gannett was able to take on debt in its recent bond deal. Thus, the M&A market for large corporations with access to cash seems to be open again.
At first glance, the availability of exits and acquisition demand from large strategics may mean that higher valuations will follow. Add to these new demands the pent-up supply of companies looking for an exit, one might expect a flood of deals to hit the market. In addition to providing current exit potential, the IPO market opening gives venture investors in high-growth sectors and private equity investors with a focus on larger companies a reason to invest again. Add to that strategics with cash and a need to acquire to boost growth, and the world seems right again for deals.
The one area we may still have to wait to return is private equity deals for smaller, lower growth companies without the prospect of an IPO exit. With the debt markets still somewhat expensive and less generous, PE investors may not be able to see their way to strong returns yet. However, this too will open up soon and we will be back to strong deal flow across the board (with perhaps a bit more conservative leverage for a little while at least).
About Jason Cassidy, Asset International’s Senior Vice President of Strategy and Development.
Prior to joining Asset International, Mr. Cassidy was Vice President of website solutions for Register.com, where he oversaw sales, operations, customer service, marketing and product management with the primary focus on small business customers. Previously, as Vice President of Reed Business Information, he was actively involved in global strategy and development, including M&A initiatives and international development, and managed a portfolio of websites. Mr. Cassidy earned an M.B.A. from Duke Fuqua School of Business (2007) and an A.B. from Harvard University (1998). Originally from Boston, he and his family reside in Staten Island, New York.