Log in
Register
Search
Search titles only
By:
Search titles only
By:
Log in
Register
Search
Search titles only
By:
Search titles only
By:
More options
Toggle width
Share this page
Share this page
Share
Facebook
Twitter
Reddit
Pinterest
Tumblr
WhatsApp
Email
Share
Link
Menu
Install the app
Install
Forums
Law Firm Events
Law Firm Deadlines
TCLA TV
Members
Leaderboards
Premium Database
Premium Chat
Commercial Awareness
Future Trainee Advice
Forums
Aspiring Lawyers - Applications & General Advice
General Discussion
M&A trends
JavaScript is disabled. For a better experience, please enable JavaScript in your browser before proceeding.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an
alternative browser
.
Reply to thread
Message
<blockquote data-quote="Rob93" data-source="post: 102614" data-attributes="member: 9371"><p>All of the points mentioned are good ones, I think it's also helpful to think in terms of macro trends which are kind of incidental to covid. Focusing mostly on PE but some of this is relevant to strategic M&A as well. </p><p></p><p>One is that the amount of available cash in private markets is astronomical, >$1tn globally, might be closer to $2tn now - for the types of investors PE firms draw capital from, private market returns are likely to become even more attractive if public equities continue to become more volatile. </p><p></p><p>Flipside to this is that rising interest rates will put strain on highly-leveraged PE portfolio companies and eat into returns, cutting in the opposite direction - also higher interest rates mean debt, which is safer than equity, has a relatively more attractive return. </p><p></p><p>Imho PE acquisition valuations are often unsustainably high right now, and given that the PE business model hinges on flipping companies within 3-7 years at a ~40%-100% profit things could become a little shaky if confidence dips. </p><p></p><p>With debt getting more expensive, I'd expect strategic M&A by public corporates to become increasingly sensitive to their public equity valuations - if I'm a plc buying a company, paying for it using my own shares as consideration can be very attractive. If my share price is in the doldrums, though, it's much LESS attractive because it's more dilutive to existing shareholders. With high interest rates, taking debt to make acquisitions might become increasingly hard to justify for plcs. If public markets are under strain, the field will be more open for PE buyers. </p><p></p><p>Also in public markets, lots of corporates are mulling over streamlining their businesses and disposing of underperforming business lines. This will produce abundant opportunities for PE houses and other corporates for whom another man's trash is their treasure. </p><p></p><p>SPACs, though public in their own right, are an important emerging feature of private M&A - lots of litigation and regulatory attention in the US is damping that market, which really got far too big far too fast, but I'm a firm believer that SPACs are here to stay and serve a valuable role in the ECM and M&A environments. FCA recently softened the listing rules to attract SPACs to London and the UAE is launching the first Arabian Peninsula regulatory framework for SPACs. More SPACs means more competition for an already limited pool of assets, but potentially very attractive exit opportunities for private investors</p></blockquote><p></p>
[QUOTE="Rob93, post: 102614, member: 9371"] All of the points mentioned are good ones, I think it's also helpful to think in terms of macro trends which are kind of incidental to covid. Focusing mostly on PE but some of this is relevant to strategic M&A as well. One is that the amount of available cash in private markets is astronomical, >$1tn globally, might be closer to $2tn now - for the types of investors PE firms draw capital from, private market returns are likely to become even more attractive if public equities continue to become more volatile. Flipside to this is that rising interest rates will put strain on highly-leveraged PE portfolio companies and eat into returns, cutting in the opposite direction - also higher interest rates mean debt, which is safer than equity, has a relatively more attractive return. Imho PE acquisition valuations are often unsustainably high right now, and given that the PE business model hinges on flipping companies within 3-7 years at a ~40%-100% profit things could become a little shaky if confidence dips. With debt getting more expensive, I'd expect strategic M&A by public corporates to become increasingly sensitive to their public equity valuations - if I'm a plc buying a company, paying for it using my own shares as consideration can be very attractive. If my share price is in the doldrums, though, it's much LESS attractive because it's more dilutive to existing shareholders. With high interest rates, taking debt to make acquisitions might become increasingly hard to justify for plcs. If public markets are under strain, the field will be more open for PE buyers. Also in public markets, lots of corporates are mulling over streamlining their businesses and disposing of underperforming business lines. This will produce abundant opportunities for PE houses and other corporates for whom another man's trash is their treasure. SPACs, though public in their own right, are an important emerging feature of private M&A - lots of litigation and regulatory attention in the US is damping that market, which really got far too big far too fast, but I'm a firm believer that SPACs are here to stay and serve a valuable role in the ECM and M&A environments. FCA recently softened the listing rules to attract SPACs to London and the UAE is launching the first Arabian Peninsula regulatory framework for SPACs. More SPACs means more competition for an already limited pool of assets, but potentially very attractive exit opportunities for private investors [/QUOTE]
Insert quotes…
Verification
Our company is called, "The Corporate ___ Academy". What is the missing word here?
Post reply
Forums
Aspiring Lawyers - Applications & General Advice
General Discussion
M&A trends
Top
Bottom
This site uses cookies to help personalise content, tailor your experience and to keep you logged in if you register.
By continuing to use this site, you are consenting to our use of cookies.
Accept
Learn more…