Return to 'near normalcy': local dealmakers say M&A market has recovered - almost.

• Author: Lewis, David
• Position: M&A [activity] - Mergers and acquisitions - Statistical data

Merger and acquisition deals, like the time and tides, have their own texture and schedule, sense and scent, ebb and flow, except when they don't.

Just a couple of years ago time stopped, and there was no tide. The economy had suffered a coronary, and nobody knew what anything was worth.

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Autumn 2008. Remember?

Selective memory is a wonderful thing.

Now near-normalcy is the new normalcy. Mergers and acquisitions are going on again in an almost normal fashion. Companies can be valued. Industry sectors have settled into categories including the good, the really great, the bad and the really ugly.

Even the Homebuilding business has helped add to M&A activity, with its near-collapse and inevitable consolidation sparking combinations of Toll Brothers Inc. with Coleman Homes Inc., Centex Homes with Wayne Homes; and Lennar Corp. with Winnerest Homes.

Let us drill down.

A look at Colorado merger-and-acquisition statistics reveals ... practically nothing.

Fifty-nine Colorado companies closed deals in third-quarter 2010, according to Norwalk, Conn.-based FactSet Research Systems Inc., compared to 58 in the second quarter of 2010 and 60 in the third quarter of 2009.

Ho-hum.

A second glance, however, reveals the shocking and incredible fact that the Colorado M&A tracked by Mergerstat fell more than half, to $500 million from $1.1 billion in the third quarter of 2009. These numbers, however, reflect about one-quarter of all Colorado M&A tallied by the company, and in the somewhat murky world of privately held businesses coming to terms these are indicators more than solid statistics.

Still, they tell a story.

It's just as well to rely on the anecdotal evidence from local deal professionals. They say that the statistical indications of flatness and falling-ness are utterly misleading: The M&A market has recovered, just about.

Depending, that is, on a mid-sized list of variables, qualifiers and conditions.

Still, the experts say the basic conditions on the ground are: The economy is rising, albeit more slowly and uncertainly than people might like; post-election, there is less anxiety arising out of Washington; both strategic buyers and private equity groups have lots of capital to deploy (some estimate as much as $1 trillion), and good purchases are available, while many entrepreneurs are happy to sell at this juncture.

"The market is improving; it is not back to where it was, but it is improving," says Wes...