It must be disheartening to put in all that time and then at the last minute find out you can't get the deal financed.
Absolutely. You have to try to get comfort as close to the beginning of the process as possible that the buyer can do the deal. But both sides can spend a lot of time and resources to get the deal done, only to have something crater at the end. That's somewhat common these days.
What do you think the market for M&A will look like going forward?
There's a lot of pent-up money waiting to be utilized. The question is when will people feel like the ground has stopped shaking under them enough to go on a buying spree? I think at some point M&A will come back strong, but when that is remains to be seen. If you had asked me at the beginning of '09, I would have probably said the third or fourth quarter of '09, and I would have been wrong.
Now I would say maybe beginning of 2010. It's hard to know. Perhaps all the chatter and percolation is setting us up for a good 2010, but we're still in an environment where if one big, bad thing happens again, it could crush that chatter quickly. I think I would say I am cautiously optimistic. For 2010. I don't think there's going to be a big uptick in 2009.
There's a lot of uncertainty with health care, a lot of uncertainty with regulation of financial institutions. There's a lot of uncertainty about the economy. People are less likely to do deals in an uncertain environment because they're unsure of whatever they're buying is going to look like tomorrow.
For example, a private-equity firm with a ton of money may want to buy a financial institution. But until the regulators give them some kind of guidance, it's going to be very difficult to do a financial-institution deal, if only because you're not sure what the landscape is going to look like tomorrow.
We have a financial-institution practice and we know a lot of banks that want to be bought by private-equity firms, and we know a lot of private-equity investors wanting to make an investment in banks, but there are very few deals that have been consummated. People are OK doing deals in a bad environment or OK doing deals in a good environment. The one environment that makes it hard for deals to happen is an uncertain environment, and that's where we are right now.
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