Scott Sperling comments on whether it will impact deal pace and pricing (probably). Dana Cimilluca notes the particular problems Citibank is having as a result of "having been involved in a lot of the buyout loans that have soured lately." Serena Ng reports that the investment banks are going to have to eat about $12 billion of debt that they couldn't sell in the Chrysler buyout. A correction or a major downturn?
Dana Cimilluca suggests one result may be that cash flush and/or high stock valued operating companies may now be better positioned to do deals than private equity firms, poising to Siemens acquisition of "U.S. medical-diagnostic firm Dade Behring." She goes on:
That is why the credit-market headaches the private-equity firms are suffering ? and their diminished ability to pay for more deals ? is music to the ears of such companies as Siemens. The German company has an investment-grade credit rating, a market cap of more than $100 billion and more than $10 billion in cash, so it can fairly well pay whatever it wants for a company like Dade.
As one investment banker recently said about the woes private-equity firms are currently experiencing: ?Strategics are thrilled.?
