M&A Environment in 2012

Private equity funds will continue to make strategic acquisitions, expanding the platforms they have been building over the last several years in a down economy. Matt Zakaras, COO and general counsel at Chicago-based Echelon Capital, a boutique private equity firm with a focus on distressed manufacturing stated, "We, like everyone else, are continuing to pursue undervalued businesses with proprietary products and strong brands. Our focus is on manufacturing businesses and we anticipate opportunities in the distressed space, especially if there are large swings in commodities prices. We are also finding distress with businesses that sell into the European market where the unresolved debt crisis has created paralysis. With respect to U.S. manufacturing opportunities, we are seeing a trend away from outsourcing to Asia as the increased labor costs in some circumstances have decreased Asia's competitive advantage."