What's fueling the buyout boom?

Mergers are being announced in droves, and more people expect the frenzy to continue. But there are some key differences between the current boom and the one in 1999 and 2000. The previous boom was driven by really overheated stock prices that gave corporate buyers a special kind of currency. This time around, the key factors are a gushing fount of easy credit, relatively on target stock prices and a lot of very aggressive private equity firms. BusinessWeek notes that 60 percent of this year's deals have been paid for in cash, compared with 29 percent in 2000. The prognosis by most experts is for more deals in the near term. There is a perfect storm of reasons: Low rates, Sarbanes-Oxley and private equity acumen. One estimate holds that buyout firms have $2 trillion in purchasing power.  

For more:
- Here's the BusinessWeek article