M&A Insights

December 11, 2012

I was forwarded a great article from AxialMarket that includes insights from M&A and private equity professionals on the economy, challenges and opportunities ahead, executing successful deals and other interesting topics.  I’ve included a few of these comments below but you can read the entire article here.

Concerns about Dry Powder:

“In the middle market it’s going to be increasingly difficult [to invest] because of the overhang of capital compared to the number of companies on the market. It’s going to drive up purchase prices and drive down returns. All of the good companies are being held and grown for better times, so there is a lot of capital chasing a relative few good deals.” – Tim MacColl in Make Your Own Luck (February 2012)

Building Relationships with Family Offices Can Be Challenging, but Rewarding: Richard is the author of the recent book on family office investing titled, The Family Office Book: Investing Capital for the Ultra-Affluent.
“We talk with family offices every day and meet with them face-to-face every week, and it still takes a long time to generate solid relationships, raise capital, or organize club deals.” He added, “Many of these family offices are connected with ultra-wealthy family offices and leaders in a variety of businesses.” – Richard C. Wilson in Richard C. Wilson on Connecting with Family Offices (November 2012)

Capital Gains Tax Caused Increased Deal Activity in Q4: This is a topic we covered last month in our Family Office Monthly newsletter.

“The spike [in deal flow] is already happening and [capital gains] is a factor for businesses that are on the market right now. Clients that we are working with today are seeking a close date no later than December 31.” – Darren De Vries in Deal Flow on the Rise: Is Capital Gains Tax the Culprit?(November 2012)

Family Offices Are More Comfortable Acquiring in an Uncertain Economy:
“[Family offices] continue to be comfortable acquiring businesses in this environment, especially because we don’t use any financial leverage. I’m not sure that we’d feel quite as comfortable if we had to do a leveraged acquisition when there’s meaningful risk of a recessionary economic environment.” – Gene Lee in Asset Class Diversification: A Family Office Perspective on Direct Investing (January 2012)

Read the whole article from AxialMarket here.

tags: axialmarket, private equity, private equity insights, private equity commentary, private equity outlook, buyout outlook, buyouts 2013, private equity 2013, private equity future, M&A

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