Many experts thought that M&A in 2022 was going to be just as busy if not busier than 2021, as buyers looked to put near-record cash piles to work. How quickly times change. Uncertain times and signs of inflation are effecting dealflow in more ways than one according to those we spoke to.
One mid-market M&A attorney warned how she expects buyers will proceed with caution in the foreseeable future.
“As middle-market deals move forward, the uncertainty posed by current market conditions will undoubtedly factor into acquisition offers,” writes Ana Calves from Kleinbard, a Philadelphia-based law firm. She mentions that buyers may offer lower prices, alternative payment structures and requests for longer exclusivity periods, contributing to the slowdown.
No one has a crystal ball of what exactly will happen in the future in terms of dealflow as so many factors come into play, but caution is in the air.
“When you look at deals, I think it will slow down a little and people will take a step back,” James Cassel the co-founder of Miami-based investment bank Cassel Salpeter & Co. recently told me.
Let’s all hope conditions change for the better real soon.
– Demitri Diakantonis