Fear and Greed in
Silicon Valley"> Louv allowed that much of the activity is coming from European companies, who can more easily afford acquisitions in the U.S. because the euro is stronger than the dollar. The business culture in Europe is also changing, and companies are more comfortable with taking on debt than in the past. "Thats allowing them to buy growth," he said. "And theyre desperate for growth." Its not just European companies who are slaking their thirst for acquisitions.Is EMCs buying spree over? Click here to read more. Carter also said banks are still lending readily for these kinds of transactions, but that was a few weeks ago. Today, said Louv, deals worth over $500 million are getting harder to make because "you cant get the financing." Louv expects M&A activity to taper off in the second half of 2008; he also admitted that if banks tighten their lending further, and the stock market keeps making like an airplane in choppy weather, activity could level off sooner than he expects. But even if the U.S. economy slows considerably, companies will need technology as much, if not more, in order to compete more effectively. New applications make companies more efficient and help them make better use of resources. "Those are the kinds of things companies cant afford not to be doing," Carter said. Check out eWEEK.coms for the latest news, views and analysis on financial applications and services for the enterprise and small businesses.
Ward Carter, president of the Corum Group, another M&A shop, said that U.S. companies are in much better financial shape than they were during economic downturn in 2002. The U.S. economy has enjoyed 4 to 5 years of substantial growth and "corporate coffers are flush with cash," he said.