I asked Taylor Devine, Principal from Washington DC and a fellow of the M&A Source, on his insights about the US M&A market. We talked about the leading indicators of where the US market is headed. Watch the full video below.

 

What is going on in the US M&A Market?

AMAA Mid-Market Report published 3 July 2020 states that out of the 2,274 deals being worked on in Feb 2020, by mid-June 2020:

  • 46% had successful closed or were still active
  • 54% were on-hold, suspended, terminated

Successful closed or were still active vs on-hold, suspended, terminated, varied greatly by industry:

  • Some industry groupings:
    • 70% had successful closed or were still active
    • 30% were on-hold, suspended, terminated
  • Other industry groupings:
    • 20% had successful closed or were still active
    • 80% were on-hold, suspended, terminated
  •  New Deals being work on since COVID-19:
    • 42% are in 3 industries: Manufacturing, HC, Medical

 

是什么推动了美国并购市场?

There is good news and bad news driving the US M&A market. First, the negative impacts:

  • Fear of the rising COVID-19 cases in the US
  • Fear of unemployment in the US last week (2.8 mil, 11%)
  • The growing political ideology differences between the role of government in our personal lives, in our business lives and the economy.
  • The stock market is volatile
  • The supply and demand of attractive and doable deals impacted by uncertainty and risk assessment. Some sectors very positive, some sectors not so much.

Now the good news:

  • The structural economics of our economy are very good.
  • The banking system is strong (big difference compared to 2008).
  • For may industries, M&A supply and demand is very good.
  • There is increasing and pent-up demand for goods and services
  • PE has lots of capital it wants to and needs to deploy and will over a period of time in M&A as it feels more confident in doing so.
  • The “new normal” will be stronger than the pre-pandemic normal.
  • Again, to understand what is driving US M&A, the needs to ask a different, more precise question is segment the industry and roles people play will provide the person with a more useful answer to what is driving M&A in the US.

 

What are the leading indicators that will give an insight as to where the US M&A Market is going?

The Federal Government Budget reflects the priorities and the balance of power of the President, the Senate, the House, and the balance within those 3 entities. There are three (3) kinds of budget $ that have an impact on M&A and IB:

  1. Mandatory Spending = Spending required by law. Example: Social Security, Medicare, Medicaid. Remember that Laws can and are changed.
  2. Discretionary Spending = Authorized by the House and Senate
  3. Appropriated Spending = Actual $ put in place to fund Authorized by the House and Senate

What we are looking out for:

  • The impact on M&A of any changes in Federal Govt Mandatory and Discretionary Funding
  • Impact on M&A in Industries where technology = disruption = game changers
  • The impact on M&A in Industries where political pressures will drive economic &/or ways of doing business = disruption = game changers
  • How the mood of the country is impacting legislation the availability of capital to fund M&A
  • The impact of our Nov 2020 elections impact on M&A sectors
  • Understand 5 M&A Metrics in the industry you are interested in
    • # of deals trend
    • $ size of deals trend
    • Valuation trends
    • Actual capital committed to do deals trend
    • Any metric that is uniquely important to the industry sub-segment you are working

If you are a business owner and would like to discuss your plans, we are offering a one-hour complimentary call with any of our experts. 您可以在这里预订电话.

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里斯 · 亚当斯

全球董事长兼首席执行官

里斯·阿德南斯(Reece Adnams)是伊顿广场(Eaton Square)的首席执行官兼全球董事总经理,他是成立于2008年的技术,服务和其他成长型公司的并购与资本服务顾问。

[email protected] +61 03 8199 7911 eatonsq.com