M&A conference draws record turnout

"A year from now, we are going to call 2014 and 2015 the golden age of M&A."

That's the word from Sima Griffith, managing principal for Minneapolis-based ­Aethlon Capital, who has been raising capital and completing mergers and acquisitions for more than 25 years. She made the comment while attending law firm Faegre Baker Daniels' 10th annual mergers and acquisitions conference Wednesday at the Marriott City Center.

The event is one of the premier M&A conferences in the country. This year, the conference drew nearly 450 attendees, its biggest turnout ever, with participants coming from as far away as China, Germany, Canada and London.

Featured were 10 panel discussions ranging from case studies on natural and organics food company acquisitions, including the General Mills/Annie's and Hormel Foods/Applegate deals, to H.B. Fuller's transformational $230 million deal involving China's Tonsan Adhesives. The agenda also included breakout discussions on such topics as current deal activity.

Much of the discussion around the food deals was how much thought the big companies put into preserving the culture of the mission-driven companies they acquired, described by one General Mills executive as bringing "the power of the big to the small."

One takeaway from the H.B. Fuller session was the importance of face-to-face negotiations, especially when the market has dictated that deals get done faster than ever with fewer and fewer in-person meetings.

One topic that arose early and was repeated consistently throughout the day's sessions is that it remains a seller's market in M&A. While it remains prime-time to be a quality seller in this market, the end may be in sight.

The first panel concluded with predictions of what 2016 will bring. How far and how fast M&A activity slides from peak activity will depend in large part on private equity firms and increasingly family offices that have been key contributors to this golden age of M&A activity.

Private equity firms now own about 10,000 companies, and family offices at investment banks have become increasingly aggressive in making deals.

Private equity firms have on average held their companies for five to six years, but those holding periods have been coming down. Some panel members told anecdotes about the firms flipping investments in as little as 18 months.

Meanwhile, family offices have been winning bids by selling themselves as longer-term investors, panelists said.

Patrick Kennedy