Finding the hidden gems: the pulse on deal-making in Colorado.

• Author: Caley, Nora
• Position: ACG [R] Denver

CAPITAL MARKETS EXPERTS preparing for the Association for Corporate Growth's DealMaker's Forum in October say investors are seeking opportunities to help companies grow, even if certain investment gems are indeed hidden.

"There is a tremendous supply of capital out there looking to be deployed," says David Mead, president of The Mead Consulting Group, Inc. "Frankly there is a shortage of places that the capital providers can find to adequately deploy the capital."

Mead says about a third of the economy is still doing well. For capital markets, certain types of businesses involved in energy, health care, and information technology are attractive now. In energy, Mead points to service companies working with new energy, such as companies that install and maintain wind and solar farms.

In old energy, natural gas is generating interest, and even controversial areas such as hydraulic fracturing (fracking) are seeing investment activity. In health care, investors like anything to do with cost containment, such as companies that develop paperless billing or disease state management. The latter refers to managing the entire disease rather than managing by categories such as pharmaceuticals, a hospital stay, and every procedure for, say, a diabetic patient. In information technology, cloud computing is hot now.

Warren Henson, president and senior managing director of investment banking firm Green Manning & Bunch Ltd., says it's a good time to sell a business.

"Even for companies that are not performing really well financially, we're still seeing some really attractive offers for businesses," he says. Henson says the hidden gems in energy include wellhead services, or companies that provide equipment and high-pressure pumps for fracking. Greg Anderson, director in the health-care industry practice at GMB, says the American Recovery and Reinvestment Act of 2009 gave health-care providers incentive to upgrade their information technology systems. That's why health-care IT companies are attractive now, as are companies that train employees on how to create and use electronic patient records.

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Sean Odendahl, a partner at the law firm Holme Roberts & Owen LLP, says many of the deals he has seen lately have been healthcare related. Many were physicians selling their practices to other physicians, but some were technology related.

"Health care is an industry primed for innovation," he says. The firm has also worked with mining and other...