Business aviation is doing quite well, unlike the air transport sector which struggles with high fuel prices along with many other industries. These good times are driving a wave of business aviation merger and acquisition (M&A) activity that’s producing prices not seen since the dot-com era.

The economic slowdown continues to provide challenges and opportunities to distributors of all descriptions. While a limited group of distributors have proved to be immune to the current downturn, by and large most participants within the marketplace are affected by an uneasy environment. With no signs of the weakness abating, it is critical to consider all options available to most successfully maintain and/or add value during these turbulent times.

As an investment banker who works with Employee Stock Ownership Plans (ESOPs), I was surprised when The New York Times recently published an article quite critical of ESOPs. The Times seems to suggest that US Sugar workers were “cheated out of money that was rightfully theirs” because of an ESOP.

Businesses and CEOs require tested, reliable input from outside sources to remain at the top of their game. The best performing businesses receive spot-on advice from trusted sources in the form of boards. Creating the right blend of experience and personalities on a board is not easy because boards come in a variety of packages.

There are times in our lives when we look back and speculate “if only I had.” For many of us those regrets seem to focus on timing-related opportunities such as “if only I had invested in Microsoft in 1992” or “if only I had sold my business last year.” While the M&A activity is healthy, in terms of estate planning, owners of privately held companies may have an wealth transfer opportunities at lower values using low interest rates, and avoid looking back and seeing the “if only” moment.

We are apparently heading ‘Back to the Future’ based on the first quarter M&A transaction results of 2008. While merger and acquisition activity is down in both value and volume over the last twelve months, when compared to 2004 the activity remains quite respectable. However, the trend over the last four quarters would indicate that we could see a further drop in M&A activity. The general consensus is that we are either in or headed into a recession (data released this week indicates a modest 0.6% growth rate for 1st quarter 2008). The sub prime mortgage contagion continues to spread; foreclosures are up; banks are scrambling for new capital; access to loans is restricted; all of this is forcing nearly everyone to pause.

Florida is home to the largest number of independent maintenance, repair and overhaul (MRO) companies in the United States. While mega-deals such as Dubai Aerospace Enterprises’ acquisitions of SR Technics, Standard Aero and Landmark Aviation garner press attention, smaller MRO companies are being acquired at record levels with scarce media attention. In this issue we take a closer look at this interesting segment.

During the recent National Association of Wholesale Distributors Annual Executive Summit in Washington, D.C., I was fortunate enough to hear the outlooks given by economists Alan Beaulieu and Steve Moore. Unfortunately, their economic outlooks were not particularly positive in nature. These presentations seemed to set the tone for the rest of the summit. Most conversations I had with distribution business owners surrounded the softening economy and the status of the M&A environment relating to the economic slowdown and stressed capital markets.

Volume and price are inversely related – the flip sides of one coin. Classically, the lower the price, the higher the volume and vice versa. Florida homebuilding turned this relationship on its head with accelerating prices and volumes from 2001-2005 before collapsing volumes and declining prices ever since.

Stock options are a form of compensation often paid to employees of a company to allow those employees participation in increases in the company’s value. Today, stock options are commonplace as part of incentive compensation packages and the Financial Accounting Standards Board (FASB) has issued standards regarding the amount of remuneration that is currently paid and recognized by the granting company, therefore eligible to be booked as an expense of the company.[1]