Dealcember

December has long been known as the silly season, but this year it’s got a little more crazy if you are in the world of corporate finance.

It’s been a huge month for deals of all different kinds.

We’ve had more than 40 floats so far this month, as small and mid cap companies rush to cash in on the positive investor sentiment created by the solid performance of the QR National float.

We’ve seen a string of acquisitions from mid and large sized companies, including acquisitions just this week by Navitas, OPSM, Rip Curl and Nestle – all smaller players that in a bid to bulk up ahead of 2011.

And we’ve seen a number of private equity investments, including today’s $5 million investment in Viocorp International by David Kirk’s new fund, two investments by Domenic Carosa and a big investment by US private equity firm WhaleShark Media in Australian web star, RetailMeNot.

So what’s driving all this activity? A sudden need to get loose ends tied up before the Christmas holidays?

Actually, that’s probably not as silly as it sounds. In many of the cases, the deals appear to have been on the drawing board for some months, and the proponents appear to have been convinced to hit the “go” button by the end-of-year improvement in investor sentiment.

And as adviser Reuben Buchanan told us last week, if you don’t get these deals done before Christmas, the break means you will be waiting until February.

But the deal frenzy isn’t all about beating Santa. What we are seeing here are companies trying to beat the market.

They are trying to beat their competitors by grabbing the best bolt-on acquisitions on the market before anyone else, and enjoying an instant boost to market share.

They are also attempting to beat the rise in asset prices which is likely to occur over the next 12 to 18 months as the economy picks up and mergers and acquisitions become even more commonplace. There are still bargains out there, and we’re seeing some astute bargain hunting right now.

For entrepreneurs, there are two messages here – keep your eyes open to a bit of bargain hunting of your own, and don’t forget there may be exit opportunities emerging in the coming months.

This is my final Entrepreneur Watch blog for 2010 as I am off on holidays next week. Thanks to our loyal and ever-growing community for their support and feedback during 2010 and we look forward to an even bigger 2011.

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