M&A Environment in 2012

Sellers

Sellers will be motivated by several key factors when contemplating a sale or strategic alliance in 2012—outside pressures from competitors or creditors, lack of accessible capital, the search for scale in a margin-sensitive industry, or an exit strategy from the business.

Competition is going to increase until the attrition of competitive businesses creates a balance between demand and capacity. Much the same way the over-saturated housing market has kept new housing starts low (or more appropriately, in-line with real demand) excess capacity in the market will keep margins razor thin in all segments, with the exception of products with truly unique or patent-protected qualities.