Sponsors sit out M&A recovery in Q3 results

The M&A recovery continues to gather pace, but not to the benefit of private markets.

Speaking on the Goldman Sachs earnings call, CEO David Solomon said that “Year to date, sponsor share of announced M&A remains below historical averages.” Goldman Sachs reported a record $1.65bn in advisory fees for its Q3 results, up 18 per cent YoY.

“It’s very clear to all of us that it’s the strategic real corporate universe that’s leading the [corporate finance] life cycle,” said Morgan Stanley CEO Ted Pick on an earnings call. The bank reported $887m in advisory revenue for the quarter, up 30 per cent YoY. READ MORE

Aligning M&A And Transformation After A Private Equity Deal

For businesses undergoing private equity investment, the period immediately after an acquisition is often one of intense change. In a carve-out, a new standalone business may need to be built quickly. In an integration, two organizations, systems and operating models must come together.

At the same time, another major program may already be underway. A turnaround, cost reduction or transformation program can be essential to delivering the investment case. The pressure to grow or return to profitability quickly can be considerable. READ MORE

Balancing caution, AI acceleration and liquidity in M&A

Middle-market M&A and venture capital are operating in a market defined by selective deployment and heightened discipline. While capital reserves remain substantial, buyers and investors are deeply scrutinizing seller fundamentals to prioritize the best companies and the best fit. Also a major factor is artificial intelligence, which has emerged as both a complex source of diligence friction and a powerful valuation catalyst, one that’s reshaping how deals are priced, built and won.

According to Brian Zuercher, a partner with The Northbound Group, today’s M&A market can be defined as a simultaneous mix of caution and rapid deal-making. READ MORE

SPAC Mergers are Facing Uphill Battles

Today M3-Brigade Acquisition II Corp. (MBAC) became the latest SPAC to call off a merger when it cancelled its planned combination with Syniverse, marking the 9th deal to be called off since December. The company noted that due to the amount of redemption requests it received that they wouldn't be able to meet the minimum cash requirements for the deal. 

Given that Syniverse is backed by Carlyle and counts other major players as investors, it was slightly surprising that more wasn't done to get this deal over the finish line, particularly as they were seemingly close with a shareholder vote scheduled for today.  READ MORE