According to a study by The Boston Consulting Group that was done during the last economic slowdown in 2002, companies that avoid mergers and acquisitions in times during economic slumps may be missing a strategic opportunity. The study analyzed 277 public M&A transactions occurring 1985 and 2000 and concluded that mergers taking place during periods of slow economic growth have a higher likelihood of success.

There is no doubt that 2008 was a tough year for doing deals, but it was not as bad as some make it sound.

The combined volume of global mergers and acquisitions announced in 2008 came in at $3.3 trillion. That is down 28% from the all-time high of 2007, but it is still the fourth-highest deal volume in history — not a terrible year in the grand scheme of things.

In today's credit market, if you are trying to raise capital to grow your business you better have a written business plan. A business plan is a document that demonstrates the growth potential and objectives of your company. In addition to serving as a practical road map showing the goal and the path to get there, a business plan should also be viewed as a marketing tool that can successfully sell your business model to capital providers by emphasizing the strengths of your company while still discussing the challenges and obstacles it most overcome.

Stainless Tubular Products (STP), a leading metal service center in the U.S. specializing in welded stainless steel tubing, pipe, fittings and bar, was acquired by TW Metals, Inc.

While some lenders are abandoning the middle market others see the credit crunch as a unique opportunity.  MidCap Financial LLC (no relation to MidCap Advisors, LLC), a new commercial finance company, was recently founded with over $500 million in equity commitments.

Middle market M&A activity slowed slightly in the third quarter of 2008 according to GF Data Resources, a proprietary database that collects detailed data on private-equity transactions valued between $10 million and $250 million.

Just six months ago, most owners of privately held businesses were feeling pretty good about the economy and their prospects. Most had enjoyed a record-breaking year in 2007, and 2008 was shaping up to be another good year despite high gas prices and worries about a potential recession. 

A recent survey of private equity professionals conducted by the Association for Corporate Growth found that most private equity firms believe there will be a significant decrease of M&A activity in 2009.  These professionals believe the greatest obstacle to M&A activity is:

Based on our daily conversations with lenders, private equity groups and mezzanine lenders, there are a number of signs that the tightening credit market is having a negative impact on what acquirers may be willing to pay for middle market companies.

"Begin with the end in mind," says Stephen Covey bestselling author of, "The Seven Habits of Successful Living."

Studies show that 90% of business owners report that their business is their single largest asset.  Yet, according to the Small Business Administration, an estimated 80% of business owners are ultimately unable to sell their businesses when it comes time to retire.

According to various sources private equity fundraising for the first three quarters of 2008 remained strong and has already surpassed 2007's total of $257 billion. Firms have continued to raise larger and larger pools of capital, with funds over $2 billion constituting nearly 20% of funds closed in the first three quarters of 2008, up from 16% for the same period in 2007.