Track 2 - Embracing Value, Innovation and Change
Wednesday, 11/11, 10:30 a.m. - What's Happening in the Transaction Market?
Moderator:
- Joanne Dunbar, Northeast Sub-Area Transaction Advisory Services Leader,
Ernst & Young
Panelists:
- Bart van Rhijn, Senior Director Corporate Mergers and Acquisitions, Philips
- Paul Weiskopf, Senior Vice President, Corporate Development, Adobe Systems, Inc.
- Ivan Brockman, Senior Managing Director, The Blackstone Group
- Robert Reardon, Director, Mergers & Acquisitions, DuPont
“A lot of companies were sharpening pencils on strategy instead of doing deals,” said Bart van Rhijn, Senior Director, Corporate Mergers and Acquisitions, Philips. “Things are starting to move again. This is the time to make a real difference….to leave behind the competition. We're really focused on deals that will move the needle.”
Robert Reardon, Director, Mergers and Acquisitions, DuPont Co., said his company is both a buyer and seller. “We're out scouring the countryside for platforms that will add to growth.” His board is laser focused on whether transactions will make a difference to shareholders. “The board is asking us a lot more questions about growth.”
Paul Weiskopf, SVP, Corporate Development, Adobe Systems, Inc., said that from his vantage point the transaction market has materially improved – though it's still slower than it has historically been. “We're seeing activity across the board,” he said. And Adobe is being aggressive in this environment: “We're actively looking to extend the portfolio.”
Ivan Brockman, Senior Managing Director, The Blackstone Group, noted that while the financing market is absolutely better than where it was, it's only been in the last few months that deal financing has opened up (it was mainly refinancing prior to that). “Terms are very different than they were in 2006 and 2007,” he said.
The panelists also spelled out specific recommendations for companies interested in pursuing transactions.
DuPont's Reardon recommended that companies invest the time now to get advisors – to ensure that they get to know these people and whether their advice is pragmatic or motivated by self-interest.
Adobe's Weiskopf says he sees a lot of inefficiency in the way transactions are executed and urges that participants focus on three questions: Is a transaction fit the company's long-term strategy? Is the technology (people, IT architecture) a good fit? And, is the valuation logical?
Brockman advised companies not to consider joint ventures. “I have a long-held view that joint ventures don't work. They won't work. The never will work. A joint venture is a detailed agreement of how a divorce will work before you ever get engaged.”
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