As middle-market dealmaking becomes increasingly global, building relationships with transaction professionals outside the U.S. is more important than ever. The Association for Corporate Growth's EuroGrowth 2014 conference October 15-16, held at the Grange St. Paul's Hotel in the heart of London's business district, provides a great opportunity to connect with dealmakers from all over the world.
The inaugural event in 2013 drew nearly 200 private equity and M&A professionals from 10 countries on five continents and featured networking opportunities, executive panels and roundtable discussions. At the 2013 conference, I participated in a roundtable about the challenges of cross-border M&A led by the Jordan Co.'s Andrew Rice, who has conducted dozens of deals in China. The conversation quickly turned to differences in the way private equity investors are perceived in various parts of the world. (For more on M&A overseas, see the feature "Transatlantic Transactions.")
The Europeans who participated in the roundtable pointed out that the private equity industry on the continent boasts a long history, with London-based 3i Group plc tracing its roots back to 1945. Despite the history, however, PE still faces some of the same misconceptions it does in the U.S. Business owners in Italy, Germany and France may prefer selling to a large local company than to an investor that is considered a buyout firm, especially a foreign one. Gradually, the reputation of private equity is improving throughout Europe.
At the 2014 conference, roundtables are scheduled on topics, including: Are There Still Opportunities to Invest in China?; Energy Deal Flow in Europe; Sourcing Health Care Deals in the EU; Cybersecurity Issues in Middle-Market Companies; and European Business Expanding into the U.S.
Another trend that is sure to come up is that the driver for many cross-border deals has shifted from gaining inexpensive manufacturing facilities to acquiring mass markets of customers, as the middle class grows in countries in Asia, Latin America and Africa. Mergers & Acquisitions covered this sea change in our July cover story, "5 Buyers Find New Customers Abroad."
Participating in conferences held outside the U.S. will help dealmakers understand global accounting differences, regulatory requirements, foreign and domestic tax considerations, and the impact acquisitions have on financial reporting. As a recent PwC report on cross-border deals points out: "A lack of knowledge in these areas could cause last-minute surprises that delay a deal's timing and result in a buyer over- or under-valuing the target."