M&A Environment in 2012

While some liquidity is re-entering the market, it will most likely be redirected at those that are less needing and better collateralized. The tightness in the lending market will cut both ways, as buyers will also have less access to acquisition funds. Those that have stockpiles of cash will continue to deploy capital, with continued care. This will create the necessity for more creative, structured deals, as acquirers either are not able or willing to finance large up-front costs. Instead, acquirers will require future operations to finance the transaction, with the previous owners tied to operational performance well after the close of the transaction.