Whats the difference between mergers and acquisitions? How about private equity and venture capital? And what are the prospects of selling your company in the market right now?
All these topics were discussed at a third-morning keynote address at the TransWorld SNOW Industry Summit by Jason Myler, an investment banker for Advest Investment Banking.
Talking to a surprisingly full morning crowd (8:00 a.m. meetings are tough on this crowd), Myler discussed changing industry life cycles and put the snowboard and ski markets in the growth to mature stages, where the markets are still seeing slow growth, but are also beginning to see some considerable consolidation.
He then moved on to definitions of mergers and acquisitions and private equity and venture capital. While the mergers and acquisitions markets were hitting record levels through the 90s to the year 2000, there was a big dip between 2001 and 2003. "Theres lots of money sitting on the sidelines right now," says Myler, predicting that the mergers and acquisitions market will get busier throughout 2004.
After highlighting the differences between buyside and sellside mergers and acquisitions, he then discussed selling to a strategic buyer versus selling to a financial buyer.
Moving on, he addressed the secretive world of private equity firms. "They manage other peoples money and invest in private companies," says Myler. "They usually want to get their investments out in five to seven years and are looking for a twenty to 30 percent return. They can be a source of growth capital, and will bring a new level of professionalism to the company."
Myler says that the private equity market has recently raised 200-billion dollars, but most of that is not invested right now, which should happen in the near future. He then pointed out that the recreational market (including snowboarding and skiing) have shown better results than the overall market, which should create more interest and investment opportunities.
Myler finished his address by discussing the typical merger transaction timeline, which ideally would be a twenty-week process, but could take much longer.
The TransWorld SNOW Industry Summit had gathered more than 300 executives from snowboard and ski manufacturers, retailers, and resorts to discuss issues facing the group. Produced by TransWorld SNOWboarding, with partners Mountain Sports Media and SIA, the SNOW Industry Summit was held April 1 to April 4, 2004 at Copper Mountain, Colorado.