From robots that pack up e-commerce purchases to video clips that can viewed on a plethora of smart devices, technological advances will drive dealmaking in the New Year. The boosts from tech will be especially welcome in the slowing middle-market M&A environment. While M&A in the broader middle-market is expected to be down, the lower middle-market will likely host a frenzy of activity.
Low interest rates were a driver of both M&A and high multiples in 2015. As far as lending goes in 2016, look for Business Development Companies to wade into the private markets as they struggle to trade above net asset value. Also keep an eye out for the continued popularity of the unitranche loan.
Globally, as China's economy stagnates, dealmakers will turn to Southeast Asia, which offers low-cost manufacturing facilities and inexpensive labor.
And back in the U.S., the election will remain in the forefront of dealmaking minds, as politicians Donald Trump, Jeb Bush, Hillary Clinton and Bernie Sanders favor cutting the favorable tax treatment of carried interest. And, 2016 is the first full year that the Association for Corporate Growth will be monitoring issues like tax on debt interest payments and the designation of joint employer status from its new Washington, D.C., office.
Here's a preview of the developments we predict will shape the M&A landscape in 2016.