Financing M&A

Merger-and-acquisition (M&A) activity in any industry segment usually reflects the overall health of its economic conditions. In good times, companies have cash and confidence to pursue expansion activities and new growth markets—many times, via the M&A route. In not-so-good times, the activity slows, as companies look inward toward strengthening their existing businesses through cost reductions and efficiency improvements. During a presentation at the Flexible Packaging Association (FPA) annual meeting held in March 2008, Doug Lawson, managing director and packaging group sector head for BMO Capital Markets (www.bmocm.com), noted a change in economic conditions that would be reflected in M&A activity. At the time, he predicted that M&A activity in the packaging industry would slow in 2008 (albeit, from record levels in 2007) due to a slowdown in the overall economy and a tightening of credit markets.