“Social media is going to play an increasing role in private equity,” predicts Watermill Group’s Ben Procter when asked to forecast the developments that will shape middle-market dealmaking over the next year in this quartet of video interviews with Mergers & Acquisitions editor-in-chief Mary Kathleen Flynn. “The industry has been very slow to pick up on social media, but it’s a trend that I think is really going to take root over the next year or so.” (Watch the video below.)
Another development Procter points to is 3-D printing and other manufacturing innovations, which, he says, will lead to “a lot more excitement in the manufacturing sector.”
Over the next year, there will continue to be a significant supply of capital from non-regulated lenders, particularly as Basel III requirements and other bank regulations come into effect, predicts Cheryl Carner of Crystal Financial, a middle-market lender. “It will be more challenging for banks to do the transactions that they have historically done, so private equity firms and other middle market companies are going to have to continue to explore alternative lenders, whether that be credit opportunity funds, business development companies (BDCs), or other entities that are non-regulated, as those lenders will have more flexibility to provide the capital solutions they’re looking for.”
Bill Roman of Harris Williams is keeping a close eye on the Federal Reserve and the “process of deleveraging its balance sheet and pulling back on all the quantitative easing that has taken place.” Roman predicts the impact will be negative on lending markets and on corporate growth.
Health care will still be a big focus of middle-market private equity, says Claudine Cohen, who leads Grant Thornton’s health care industry group. A year from now, “a lot of the ObamaCare uncertainty may have worked itself out of the system, and people will know more about what’s happening, and that will lead to more deal flow in health care.”
Procter, Carner, Roman and Cohen spoke with Mergers & Acquisitions at ACG Boston, a conference hosted by the Boston chapter of the Association for Corporate Growth that brought together 600 middle-market dealmakers recently for the biggest M&A event in New England. For more video interviews from the event, including our conversation with former Sen. Scott Brown (R-Mass.) on concerns that a new excise tax on medical device makers will drive manufacturers out of the U.S., visit http://www.themiddlemarket.com/video/