Another day, a new delay in the proposed $1 trillion bipartisan infrastructure bill. But what is at stake for dealmakers? If sector fundraising is a leading indicator, my bet is ‘not much’!
Consider the potential upside to companies outside of the bricks and mortar construction industry. Construction adjacent firms can anticipate a considerable uptick in opportunities as well.
“Even assets entirely owned by governments can rely on private sector expertise: development, design and consulting firms will benefit from infrastructure spending,” said Eric Richards, co-chair of O’Melveny & Myers’ corporate department, in an interview earlier this month before the contours of the pending agreement were firm. “Those companies that support operations of infrastructure will benefit.”
The proposed bipartisan legislation would deploy $1 trillion over five years, of which $579 billion would be allocated to public works projects like roads and bridge maintenance and construction.
“The Biden administration directive to make projects more environmentally friendly creates a need for companies that can facilitate environmental compliance across projects, able to facilitate development and operations,” Elizabeth Dubeck, a Partner in O’Melveny Myer’s Corporate & Transactional Practice, told Mergers & Acquisitions earlier this month. “Even though they’re not core infrastructure companies themselves.”
But the truth is that firms are already girding for investment in infrastructure, whether legislation passes or not. BlackRock’s (NYSE:BLK) $1.67 billion capital raise for its Global Infrastructure Debt Fund was announced last month. The fund aims to offer bespoke financing for sponsors and other borrowers developing assets with sub-investment grade credit quality.
What’s your take? Are you exploring infra deals regardless of the bill’s prospects? Let me know at [email protected].
– Brandon Zero