Adrian Johnson
TLDR:
Key Points:
- M&A professionals are predicting an increase in deal volume in the next 6 months
- Despite high interest rates, technology enhancements are fueling some deals
Summary:
According to a new survey from Grant Thornton, M&A professionals are optimistic about an increase in deal volume in the later stages of the year. Despite high interest rates, factors such as a hunger for technology enhancements are driving this predicted surge in activity. The survey found that technology, media, entertainment, and telecommunications are expected to be the top industries for M&A activity in the next six months. Private equity firms are also getting ready to join the action, with many firms holding cash for better deals and others needing to sell their portfolio companies to provide investors a return on their capital.
Financing continues to be a challenge in the M&A environment, with high interest rates impacting the lending environment. M&A professionals are exploring alternative financing options such as preferred equity, debt structures, and investment from specialized private funds. While some respondents expect lending pressures to ease with falling interest rates, others anticipate a more constrained lending environment in the next 12 months.
Despite the optimism for increased deal volume, 40% of M&A professionals are pausing deals until after the U.S. presidential election in November. The election is expected to impact factors such as the overall economy, regulatory policies, tax policies, and trade policies. M&A professionals are cautiously navigating the uncertainty surrounding the election and its potential effects on the M&A environment.
