Over and over on this blog, I have strongly advocated external growth to complement organic growth. Today the largest 500 non-financial American firms have nearly $1 Trillion in cash and short-term investments on their balance sheets. That’s Trillion with a ‘T’! This represents roughly 9.8% of their assets. What does that tell me? Companies are continuing to hoard cash.
I believe this accumulation of cash will continue for some time because credit still remains scarce, CEOs are anxious about economic pressures and companies are unsure where government regulations are headed. Given all of this, strategic buyers have a unique window of opportunity for the next 12-16 months to make bold moves. My philosophy remains “If Not Now, When?”. You’ve seen us say it before. I’m convinced that sound companies with strong balance sheets, capable management, and a solid plan for growth have an unprecedented opportunity to make strategic acquisitions.