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Some Light Reading for You to Digest After the Big Thanksgiving Meal

John Kielich, CPA - Managing Director for Kolb+Co. M&A Advisers   email | bio 
LeAnne Foster, CPA - Business Analyst for Kolb+Co. M&A Advisers   email
November 2010

We thought we would have some fun and cover several random topics quickly, while you struggle to stay awake after eating too much turkey. We hope you have a great Thanksgiving -- enjoy!

• Businesses are waiting ... waiting for a wave of optimism and certainty. The electorate spoke loudly on November 2nd and maybe this will bring the optimism and certainty we need.
   
• There is a shortage of good companies for sale as a result of the lack of optimism and certainty. With valuations getting better and hopefully, the new wave of optimism and certainty that could come with the election, good companies will come out of hiding.
   
• A lot of cash is available for transactions. Recent reports show that private equity firms have over $500 billion of funds, and synergistic buyers are even more cash-rich with reported cash on balance sheets approaching two trillion dollars. Private equity firms need to invest their cash, and the synergistic buyers need to find ways to grow.
   
• Banks are looking for businesses who want to borrow money. Okay, now you are definitely awake! I am sure that anyone that has tried to get a loan recently knows how difficult it is to get several banks lined up with money in hand. However, banks need to lend money to make money. JP Morgan Chase recently reported their third-quarter results, which included a $1.5 billion reduction in the loan-loss reserve. This is a positive sign that banks' balance sheets are starting to heal and with that comes an appetite for lending.
   
• Major tax issues will be significantly impacted by the results of the recent election. The "Bush Tax Cuts," estate tax and extender legislation need to be addressed before the end of the year in the "lame duck" sessions. Lower taxes would help that turkey go down even better!
   
• This next thought has nothing to do with business or M&A, but rumor has it once again that this is Brett's last season, at least in Minnesota. Also, the Packers will win the Super Bowl. It is only November - there is still a chance at both!

Have a wonderful Thanksgiving!