There’s going to be “a pickup in M&A,” says Jim Freedman, chairman, Intrepid Investment Bankers LLC, reflecting on the Republican party’s winning the White House and both houses of Congress in the U.S. election. Mergers & Acquisitions spoke with Freedman and other transaction professionals at the 2016 ACG LA Business Conference at the Langham Huntington Hotel, Pasadena, California.
“The general consensus is that there will be a reduction in taxes," Freedman continues. "There will be a reduction in regulation. There will be more of a pro-business philosophy. I think those are all good things for the M&A industry. I’m pretty bullish on what this means for the M&A business.” Intrepid provides M&A, capital raising and strategic advisory services to entrepreneurs and middle-market companies.
“If people conclude, in the next several months, that the transition will foster some policies that will cause some economic activity, then we may see more M&A activity,” says Geoffrey Rehnert, co-CEO, Audax Group, a Boston-based investor in middle market companies that manages over $10 billion of assets private equity, mezzanine debt, and private senior debt businesses. Prior to co-founding Audax Group, Rehnert helped launch Bain Capital, where he worked closely with Mitt Romney, the Republican Party's nominee for president in the 2012 election.
“My prediction is that it is going to accelerate M&A activity,” says David Bonrouhi, managing director, Calabasas Capital, referring to the election outcome. “Business owners are going to want to get deals done before any new initiatives get passed and slow things down.” Calabasas is a Los Angeles-based boutique financial advisory firm that provides investment banking services to lower middle-market companies, providing expertise in food and restaurants, consumer products manufacturing and distribution and business services.
Some dealmakers were more circumspect. “We’ve got to see what policies will be implemented,” says Brad Hileman, a managing director in the Los Angeles office of Duff & Phelps, a global valuation and corporate finance adviser with expertise in complex valuation, disputes and investigations, M&A, real estate, restructuring, and compliance and regulatory consulting.
“There’s going to be a temporary slowdown,” warns Jeri Harman, CEO, Avante Mezzanine Partners, which provide mezzanine loans to middle-market companies and co-invests in some transactions.
Visit www.TheMiddleMarket.com/video to watch video interviews from the 2016 ACG LA Business Conference.
Additional reporting by Mary Kathleen Flynn