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Financial Executives: Recession Provides Opportunity to Gain Market Share

Posted on: Thursday, 11 June 2009, 09:38 CDT

- 87% Considering M&A Activity As Means to Grow -

- 89% Believe Company Will Grow As Fast As Competitors -

FLORHAM PARK, N.J., June 11 /PRNewswire/ -- Financial executives appear cautiously optimistic about the future, and have identified opportunities to gain market share amidst the recession, according to a new study of financial executives released today. The report, entitled "M&A Plans and Other Strategic Growth Initiatives," was conducted by Financial Executives Research Foundation (FERF), the research affiliate of Financial Executives International (FEI), and commissioned by Merrill DataSite. Included in the report are findings from an online survey which polled a diverse range of nearly 300 senior financial executives in order to gauge how they are responding to the current economic crisis, and how they plan to execute their strategic objectives, specifically with regard to mergers and acquisitions (M&A).

Executives responding to the survey demonstrated confidence in their companies' resilience and capacity for positive future performance. A total of 87 percent of survey respondents believe that the current recession provides an opportunity to gain market share, with the same percentage considering M&A activity as a means to grow. While revenue growth is a major challenge during this recession, 89 percent are confident that their company will grow at least as fast as their industry competitors, with 68 percent predicting that their company's industry will grow at least as fast as the U.S. gross domestic product.

"Our survey reveals cautious optimism among many senior financial executives, and agreement that this could be a fertile period for deals that reinforce companies and their market position," said FEI CEO and President Marie Hollein. "We are seeing that executives of companies who entered the recession with a strong management team and a good business model are not necessarily changing their corporate strategy significantly."

Increased Interest in M&A Activity

The study also revealed that many respondents are looking to ramp up M&A activity. Key findings include the following:

• Only 10 percent of respondents are not considering a transaction at this time.
• Among anticipated deal types over next two years, M&A deals are clearly preferred (71%).
• To pay for transactions, more than half of respondents (54%) expect to use some combination of stock, debt and cash.
• The most desirable acquisition structure is almost evenly split between a private company acquisition (49%) and a selected asset purchase (42%).

"This report, the first of its kind, provides in-depth insight that is indispensable to anyone who is serious about deal making and making the best strategic choices for their company," said Richard A. Martin, Jr., Senior Director, Merrill DataSite. "Merrill's philosophy is to provide insightful and useful information on M&A trends, technology and best deal-making practices and we are very excited to have partnered with FERF."

"In today's rapidly-changing environment, it is crucial to understand how CFOs and other senior-level financial executives are coping with the crisis and what market opportunities are available to them," said Dr. Mark Walker, Associate Professor of Finance at the University Mississippi, and one of the co-authors. "Managing a corporation in today's global marketplace requires extensive quantitative and qualitative understanding, and through this study, we aimed to gather unique perspective on the status of what strategic growth initiatives companies are currently employing."

In addition to the online survey, a series of follow-up telephone interviews was conducted among a select group of respondents in order to obtain an overview of the firms' specific corporate strategies and plans for M&A activity. Collectively, the interviews revealed that many of the actions taken by these CFOs include hiring and retaining excellent employees, contracting with vendors in ways that encourage product innovation, and investing in technology to improve the firm's operating activities or product development. Detailed results of all responses are available to members at no cost through the FEI website www.financialexecutives.org; non-members can purchase the survey results for $49.95, by visiting the FERF bookstore online at www.ferf.org/bookstore; research available to media upon request.

About FEI and FERF

Financial Executives International is the leading advocate for the views of corporate financial management. Its 15,000 members hold policy-making positions as chief financial officers, treasurers and controllers. FEI enhances member professional development through peer networking, career management services, conferences, teleconferences and publications. Members participate in the activities of 85 chapters, 74 in the U.S. and 11 in Canada. Visit www.financialexecutives.org for more information.

Financial Executives Research Foundation (FERF) is the non-profit 501 (c)(3) research affiliate of FEI. FERF researchers identify key financial issues and develop impartial, timely research reports to FEI members and non-members alike, in a variety of publication formats.

About Merrill DataSite

Merrill DataSite(TM) is a comprehensive virtual data room (VDR) solution that accelerates the due diligence process by providing a secure online document repository for confidential time sensitive documents. Merrill DataSite overcomes the many limitations of a traditional paper data room by enabling companies to maintain and share critical business information in a secure online environment, streamlining all stages of the document and communications process. Accessible via the Internet, Merrill DataSite dramatically reduces transaction time and expense by allowing prospective buyers to participate concurrently in the due diligence process. Merrill DataSite is designed for rapid deployment and can be up and running in two hours or less. Our team can scan, upload and organize thousands of pages of content from any source in 24 hours or less. Every aspect of the process, from document scanning to VDR hosting and project management is delivered by Merrill's multilingual team, available around the clock worldwide. Currently, Merrill DataSite is the industry's only ISO 27001-certified VDR solution, providing assurance that the most stringent security standards for business transactions are followed. As a leading provider of VDR solutions worldwide, Merrill DataSite has empowered more than 500,000 unique visitors to perform electronic due diligence on thousands of transactions totaling trillions of dollars in asset value.

About Merrill Corporation

Founded in 1968 and headquartered in St. Paul, Minn., Merrill Corporation is a leading provider of outsourcing solutions for complex business communication and information management. Merrill's services include document and data management, litigation support, branded communication programs, fulfillment, imaging and printing. Merrill's target markets include the legal, financial services, insurance and real estate industries. With more than 5,900 people in over 70 domestic and 15 international locations, Merrill empowers the communications of the world's leading companies

SOURCE Financial Executives International

Source: PR Newswire

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