Thursday, December 13, 2007

Will Sarbox accelerate M&A?

FirstRain picked up an interesting post on the deal architect blog which I could really relate to: Oracle's M&A trump card: Sarbanes Oxley?. The speculation is whether the tough regulatory environment that public companies find themselves in makes M&A more likely because management teams want relief from Sarbox.

The specific case being discussed is in software – as it relates to Oracle’s acquisition binge, but it could apply to any low capital intensive industry with a set of smaller public companies – and the personal liability risk can show up anywhere. I don’t believe most CEOs would be unduly influenced on whether to sell or not by the relief they’d get because most will do the right thing for their company and their shareholders, but I have to imagine that there is a background nudge to their decision making process – a small voice saying “hey dude, you could relax for a while….”

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