PFFC - January 2009 - (Page 34)

ECONOMIC OUTLOOK IT ED R C W B hat a year By 2008 turned out to be. A crisis that bethrough 2007 will be viewed as That all changed in 2008 gan in the subprime lending one of the best M&A environ- when the full impact of the marketplace escalated into ments of current times. The credit crisis was felt. Lenders a full-blown credit freeze. economy was strong, interest were forced to deleverage their Governments across the globe rates were low, and capital was balance sheets rapidly, and were forced to inject massive everywhere—both corporate acquirers—especially private amounts of liquidity and capi- capital and private equity capi- equity groups—had to move tal into the banking system to tal. The result was a staggering to the sidelines. prevent a complete collapse. increase in M&A activity that The result was that global The stock market suffered, reshaped numerous indusM&A activity fell by 30% through nine months in 2008. economic uncertainties were tries—banking, pharmaceucreated, and lenders of all sizes ticals, aerospace, autos, and of The decline would have been and stripes became much more course, packaging. more dramatic if not for some conservative. Not exactly a great backFigure 1 drop for merger and acquisition activity! �� by ted rea try ec us u ind val en er ing be g ld a e ho ? ck nc ch pa are ide f e un sh n h r co in t he it c as ill t ns ed r h W itio lc or uis ba ty, q tivi glo ac ial ac nc he t ina ve y wF dri iro nb es ke a ,M e ll sh orn ill H S AO CH of the shotgun marriages caused by the credit crisis: Bank of America/Merrill Lynch, Wells Fargo/Wachovia, and JP Morgan/Washington Mutual, to name a few. The game especially changed for the large private equity groups. Names like Blackstone, KKR, Carlyle, and Bain, which had dominated M&A headlines in 2006 and 2007, watched their traditional sources of leverage dry up. Hedge funds, high yield mutual funds, investment banks, and �� insurance companies, which all had been �� conduits and sources for turbo-charged debt, saw the capital pools evaporate. The result was a �� precipitous drop in large private equity�� WWW.PFFC-ONLINE.COM Global M&A Activity Global merger and acquisition (M&A) activity for the last several years is detailed in Figure 1. This includes a comparison of interim 2007 and 2008 results. Surely the period of time from 2004 34 | JANUARY 2009 �� http://WWW.PFFC-ONLINE.COM

Table of Contents Feed for the Digital Edition of PFFC - January 2009

PFFC - January 2009 Contents First Glance Calendar of Events From the Editor Web Lines Process Management News Clips Narrow Web & Label Reporter Narrow Web & Label What’s New Products In-Mold Labels Cover: Ink Trends Economic Outlook Brand Security Show Preview What’s New Products Services Directory Classified Marketplace Equipment Buyers & Sellers Advertisers Index Experience Speaks

PFFC - January 2009

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