Middle Market Deals and how to buy, sell and raise capital from $5 to $500 million

The New York Times Deal Book blog includes a note about Patrick Byrne's relationship with his father, John "Jack" Byrne, including their disagreement over Patrick's efforts to encourage reform in the stock market over short selling.  As you know, Patrick is the CEO of Overstock.com Inc.(Nasdaq: OSTK) and his father sits as the Chairman.  The senior Byrne is a billionaire who made his name by turning around Geico in the 1970s.

Patrick himself describes his efforts as a "jihad" to reform Wall Street, which he calls a "cesspool of greed and corruption."  His focus is on the practice of short-selling, which he points out is inadequately regulated.  He's even sued some hedge funds.

During 2005 and leading into this year, we've seen valuation multiples in M&A transactions increase, especially in transactions by financial sponsors like private equity groups. 

Hedge funds have increasingly become involved in making full on acquisitions, especially in the large cap end of the market.  This may be having an impact on valuations as this brings billions of dollars into the buyout market.

Over time, this is likely to have an impact on valuations down market from the large cap arena.  This will be especially true of hedge funds begin to allocate funds to transactions in the upper end of the middle market.

Watch and see!