A good start to the deal year?

January 20, 2010 | By Jim Kim

Bloomberg quotes one analysts as saying Kraft's $19.7 billion deal for Cadbury represents "the lowest multiple in the industry over the last decade. A year from now, Kraft will be singing the praises of what a great deal they got." This in itself is good news.

One-long running criticism of the investment banking industry is that most deals do not work out, in part because the price tags historically reflected way too much optimism. So if bankers and sellers can adjust their expectations a bit across the board, the likelihood of more deals that actually work would go up.

In any case, you get the feeling that more strategic deals are in the works. Cadbury was advised by Goldman Sachs (GS), Morgan Stanley (MS) and UBS. Kraft was advised by Lazard, Centerview Partners, Citigroup (C) and Deutsche Bank. Some say the deal is the crowning achievement of the late Bruce Wasserstein, the iconic investment banker who was CEO at Lazard when the deal was initiated.

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