Firms Find Corporate Wallets Growing Fatter

Having so much money you just don’t know what to do with it might not be your problem. But happy days seem to be here again for some businesses.

“Companies have returned to profitability, have built cash resources, so successful companies are looking to expand and double-down their bets on business they are in,” said Dave Snyder, a partner in Pillsbury Winthrop Shaw Pittman’s San Diego office, and head of its corporate and securities practice group nationwide.

In Pillsbury’s case, nationally, the firm reported merger and acquisition and security transactions valued at more than $54 billion in 2004, including major deals in energy, financial services, technology, telecom and health care , this compared with more than $8 billion the previous year. The San Diego office has seen a lot of activity this year, having represented Xcel Pharmaceuticals in its sale to the Costa Mesa-based Valeant Pharmaceuticals International, a six-figure deal; and the Hamilton Group, a San Diego-based owner and operator of more than 100 funeral homes and cemeteries across the country, in its acquisition by Keystone North America, a high eight-figure deal, according to Snyder.

“This illustrates that we are in a time where there is a lot of capital out there,” he said. “Investors are looking for a return, plus additional gain. The public offerings markets are not robust, but they are available, and the acquisition market is another alternative for investors to gain liquidity in their investments.”

It’s a trend that began last year and continued through the first quarter, Snyder said.

“2004 is a much more robust year than 2003, and is continuing in 2005,” he added. “There is a lot of money in private equity firms. I think they are looking for places to put their money, and there are more and more financial transactions , transactions where professional investors look at the business, analyze the cash flow, and buy it because it’s an attractive business to be in.



“That comes from the massive size of hedge funds and money out there chasing financial deals. The rich get richer, and successful companies are looking to expand. It’s a great time to be an M