Toolbox often accompanies friend and this newsletter's über production editor to Costco (she's got the membership card). As Costco shoppers know, the range and size of available products there is quite amazing. (And the samples on Saturday are pretty good, too. Why buy when you can eat for free?) Costco's ability to sell large items at decent prices got Toolbox to thinking. Given that dealmaking (with a few notable exceptions, like the Cubs, who really needed to be sold) is kind of bouncing off a low ebb these days, Costco ought to have an aisle devoted to companies that want to sell themselves. You know, cut out some of the middlemen. That way, interested buyers could simply browse the businesses aisle, maybe get a sample or two, read the label for diligence issues and then bring the business to checkout. Yeah, it'll never happen, but if anyone's got any better ideas...Actually, Toolbox has found someone who's got a lot of better ideas and observations to make about the M&A market as it stands.

Theodore B. Polk is managing Director at Citigroup Capital Strategies, and he was kind enough to share his thoughts in Acquiring or Selling the Privately Held Company — 2009. The article is a great retrospective on where we were prior to the slowdown and how deals are moving forward. Though written in February, things haven't progressed so much that the value isn't still as good as then, particularly in its generalized description of how markets change when an economy slows. Whereas in flush time, sellers care primarily about the price they will receive for their businesses, when times are tough, they look at price combined with whether the purchaser can actually follow through with the deal. Thus deals that have been getting done do so "because the buyers took advantage of their superior access to capital and welcomed the opportunity to buy well-run operations at a time when others were struggling to do so." Anyway, Polk offers some pointers on the kinds of businesses that look to sell in the current environment and how to get these deals done, regardless of the market conditions. He also looks at what factors will drive a market turnaround. (Hint, higher future tax rates make doing deals now more attractive.) And turnaround will come. This is great work, although Toolbox really thinks Polk should have mentioned something about the Costco option.