In a cash-strapped M&A market without deals or prospects, Doru Lionachescu, partner at independent investment bank Capital Partners, sees a sharp deterioration of valuation multiples of assets by a staggering 50% in view of financial crisis. “M&A market is now at the mercy of the buyers”, appears to be the characteristic of the industry in 2009, as Doru Lionachescu said.

Deterioration of the valuation multiples goes up to 50%

The changes in the business landscape across the world, shook up by the economic crisis have changed the view of players in merger and acquisition arena.

If until last year the entrepreneurs were reluctant in selling their business at good prices, in hope of further increase, the adjustment of valuation multiples, especially in cyclical sectors can reach even 50%.

Doru Lionachescu, one of the local market’s heavyweights, explained that the adjustment of valuation multiples in Romania was evident, estimating it in reasonable 25-30% deals, and sometimes even going to 50% from 2007 peaks.

“Before blaming the bears, we should ask ourselves whether the last year valuation of Romanian assets were realistic and sustainable or not”, Lionachescu told Wall-Street.

Even if certain sectors are tagged as “defensive”, they were not fully immune to crisis and booked even two-digit decline.

“I think that one of the lessons we should learn from this crisis is that, in the context of globalization and ever-growing news pile, there are no such thing as defensive assets or sectors”, said the investment banker.

After a first quarter with few deals, he continued, the M&A marketplace dropped a revival sign at the end of March that whipped into shape when the International Monetary Fund arrangement was concluded.

“Normally, we should be having deals completed by summer”, Lionachescu said.

The agreement has only c