BY KEVIN MANAHAN

The turnout was small at Intel Capital’s Jones Farm campus in Hillsboro, but the topic at hand was a massive one. Sixteen people sat in on a panel discussion this week called “Mergers and Acquisitions: Navigating the M&A Landscape,” helmed by three professionals well traveled in M&A territory.

The discussion was part of this year’s Silicon Forest Technology and Financial Forum (formerly two separate events), and as the panelists shared their unique perspectives on M&A today, there was no denying that technology transactions have hit rough waters in this economy. Is there an end in sight to the bleak picture? It’s hard to tell.

Although Intel is looking at some expansion areas, including graphics and visual computing, its M&A director, John Zdrodowski, said the company’s general financial discipline over the past few years — the belt-tightening and restructuring done in response to the downturn — is here to stay. Budgets at Intel are tight and head counts are flat, so any acquisitions the company makes have to make absolute financial sense. And Intel is also cutting back on divestitures. “That’s mostly behind us,” Zdrodowski said. “There may be some in the future, but fewer than past years.”

For Roy Tucker of Perkins Coie LLP, whose firm has done a number of deals in the tech sector over the past year, deal complexity is among the themes he has been seeing in the M&A world, a trend driven by uncertainty about the economy, markets and valuation. “It’s not news to anyone that there’s a huge amount of fear out in the market,” said Tucker, a partner at the law firm. “On the part of both buyers and sellers, there’s a lot of concern about doing the wrong deal because things have moved so quickly in one direction that could move just as quickly in another direction.”

Goldman Sachs VP Lev Finkelstein agreed that confidence levels and market volatility are still the major themes driving tech M&A activity, and he has seen a definite trend in decreasing transactions. “Our expectation is that 2009 is going to be a pretty low year for M&A activity and sort of trailing the recovery in the M&A market, because there’s still a lot of uncertainty and pretty wide value gaps among buyers and sellers,” Finkelstein said. There are other trends to be expected, too. The volume of announced hostile transactions has increased, for instance, and it is expected to stay high because of a change in sentiment on those types of deals, Finkelstein said.

So is there anything good to say about the M&A picture? Perhaps. Finkelstein said confidence in the market is improving, although companies are still cautious about the risks. And despite the gloomy economy, Finkelstein said, “From the buyer standpoint, we think now is one of the best [times] for buyers to look at opportunities to consolidate.” And per certain studies, he added that deals made at the bottom of an economic cycle often perform much better than those done at the top, and transactions made now can be cheaper and provide greater returns on your investment than waiting it out. So think about that when you’re on the fence about that next acquisition.

Kevin Manahan is the online editor for Oregon Business.