There have certainly been better days – and even better years – for the nation’s construction industry. But extended periods of strong growth have turned sluggish making a once vibrant industry fall back to levels not witnessed in nearly a decade. As economic conditions improve, construction is sure to take off again but how soon that will happen is the question on everyone’s mind.

Over the past twelve to eighteen months, we have heard considerable discussion about how the economic downturn has affected valuations of private companies. All of us who have 401ks understand the volatility of public company valuations. Private company values have been affected similarly. However, some valuation professionals have instituted the “smoothing” method to lessen the market volatility on business valuations.

Healthcare remains one of the nation’s most vibrant and vigorous sectors, creating some excellent opportunities for mergers and acquisition (M&A) activities.

I recently wrote about one of the most dramatic changes since the inception of the fair value concept for financial reporting imposed by Statement of Financial Accounting Standards No. 157 (“FAS 157”). Nearly a year since the Financial Accounting Standards Board (“FASB”) issued Statement No. 157, accounting standards have been codified and the nomenclature used when referring to FASB statements has changed. FASB Statement No. 157 is now encompassed in Accounting Standards Codification (“ASC”) 820.

What a difference a year makes. Flashback to the ACG Intergrowth convention in May 2009, when the mood of the Private Equity (PE) community seemed as somber as a mortician’s convention. Fast forward one-year later to this year’s event and the PE world is abuzz again with bullish sentiment and overall feelings of optimism and hope.

Part of the answer is the banking issue of “Too large to fail” changing to “Too many to fail.” Community banks are still struggling with the effects of the Great Recession. The large loan charge-offs and substantial additions to loan reserves are depleting their capital reserves. In most areas, community banks represent approximately 50% of bank deposits and loans. Therefore, their health has a direct impact on the ability of local businesses to obtain business credit.

Multiple market indicators are sending signals that make this a good time to consider selling a business. Some of those sound, fundamental reasons are outlined below:

Nearly every industry feels stressed from current economic conditions but none has suffered more than construction. The federal stimulus plan was expected to offset declines in new construction but the projects funded have been slow to come to fruition. As a result, construction and construction related companies that enjoyed an extended period of significant capital expenditures now struggle with high debt payments while revenues, profits and cash flow continue to decrease. Compared to 2008, bankruptcy filings for construction companies increased by over 100%.

This year is expected to be full of opportunity for many privately held companies, including those owned by Employee Stock Ownership Plans (ESOPs). An essential component for companies to take advantage of these opportunities is a proper capital structure.

After a challenging start, 2009 ended with some positive momentum. Expectations going into the year were low due to the severe economic downturn experienced at the end of 2008. As the year progressed the M&A markets became more comfortable with the state of the economy and the initial stages of the recovery. During 2009, activity improved leading many to believe that 2010 has the potential to be a better year for M&A transactions. Additionally, a new report from Towers Watson and Cass Business School determined that publicly traded companies which undertook acquisitions in 2009 outperformed the market, providing evidence of the value acquisitions offer.