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The US economy continues it’s slow improvement process. Unfortunately, as part of the global economy, the Dow has had a significant decline in May. Unlike the past, this decline was driven in large part by the declining economic situation in Greece and the pressure on the Euro. It has also caused some American economists to worry about the US deficit and possible future ramifications.
 

For the third consecutive month, the US economy is adding jobs. The new job additions were higher in April than in any month over the past two years.  In many parts of the US, there is ample evidence of economic improvement. However, the West and parts of the South continue to suffer. My home state, Nevada, has an unemployment rate well over 14% and tourism is still suffering. It will take time for a complete recovery!
 

We are beginning to see new activity in the ECM, BPM and BPO sectors. After months of struggling, many clients have seen a resurgence of demand.  In addition, for the first time in many months, hiring is again ramping up at all levels.
 

On the M&A side, there is still very strong activity in all sectors. It is a very interesting time, driven by some new factors:

• Companies that have cash are looking to find acquisitions that are strategic for them and will help revenue growth; in a depressed economy organic growth is not enough.

• The VC’s and Investment Bankers are back in the market! They have cash and are either seeking to build new portfolios or are on the quest for acquisitions to add to their existing portfolios.

• Global companies are seeking a foothold in regions where their revenue growth is slow. They are seeking a variety of companies in an attempt to enhance revenue

• Industry consolidation is still a huge factor.
 

The importance and appeal of the ECM, BPM and BPO sectors was evident this week with the acquisition of Perceptive Software by Lexmark. Perceptive has been a very fast growing ECM company approaching $100M in sales. Lexmark paid a cash sum of $280M for Perceptive - a great valuation in this market.  The key reason cited by Lexmark for making the acquisition of Perceptive is that the ECM software company will enhance their growth around the world.
 

The rest of 2010 will be a very active time for M&A. If you do NOT yet have your M&A strategy in place, give us a call.  Don’t miss out on the great opportunities in this market. Whether buying or selling, we can assist you.