8 M&A advisors urge closing deals now, while economy stays strong
The year may have gotten off to a bit of a slow start compared with a record-breaking 2018, but investment bankers and other advisors interviewed by Mergers & Acquisitions say they are very busy, and their forecasts for M&A in 2019 remain bullish.
They point to a lot of cash that must be deployed by strategic buyers and private equity firms alike; a healthy U.S. economy; and low interest rates. Competition for high-quality targets has never been more intense, especially for technology providers, they report, which means sellers are commanding high prices. It all adds up to a seller’s market.
A certain mood of urgency prevails, as dealmakers seek to close deals quickly, while conditions remain favorable. The advisors interviewed for this story say they don’t see signs of an impending recession; however they are closely monitoring bellwethers, including corporate earnings, wage pressure, global supply chains and slowdowns abroad. They are recommending that clients be prepared for an economic slowdown in the next two years.
Specialization is the name of the game, and investment bankers advise clients to seek targets with business-model stability, limited cyclical exposure and a recurring revenue business model. Technology, business services, healthcare, consumer and manufacturing are among the most promising sectors.
Here are Q&As with 8 prominent bankers and advisors.
Paul Aversano, Alvarez & Marsal
Cole Bader, Stifel
Karen Davies, Huntington National Bank
J.R. Doolos, KeyBanc Capital Markets
Andrew Jessen, William Blair
Derek Lewis, Harris Williams
Peter Lombard, Piper Jaffray & Co.
Christopher Stradling, Lincoln International