By Brad Kerkhof & Arjaan De Visser, Stillwater Capital Corporation
Risk, real and perceived, is a critical factor in M&A. Risk informs valuation and drives deal structure. The market today is full of risk. Factors such as the Covid-19 pandemic, increasing interest rates, inflation, and global supply chain issues have created an unpredictable economic environment. Risk, left unattended, can expand from reality into fantasy and can quickly erode confidence. Determining what is real and what is not is critical to completing a successful transaction.
By Hayden Boles, Hyde Park Capital Advisors, LLC
Recent market volatility coupled with tightening monetary policy and higher interest rates caused overall M&A market activity to decrease in 2022 compared to the prior year of 2021. Private equity and strategic investors are taking a step back to re-evaluate their allocations and exposure to certain industries that could be most impacted by a negative economic cycle in 2023. Healthcare M&A interest has remained strong despite the pullback, as investors see the US healthcare industry, which is benefitting from the aging population, as a hedge against a potential economic downturn.
By Christopher Esterhuysen, Nolands Capital
Business owners and investors are understandably concerned about rapidly rising inflation levels, but what does this mean for someone wishing to sell their business? Put simply, the effects of inflation on a company’s value come down to how inflation impacts a company’s current and future cash flows. Three key levers drive this process:
By Philipp Weber, FPS
The importance of environmental, social and governance principles (ESG) for companies has significantly increased in recent decades. This is due to the growing awareness of society and stakeholders regarding sustainability issues, driven mainly by the noticeable negative effects of climate change. Voluntary initiatives, such as the United Nations Global Compact and the Sustainable Development Goals, and regulatory approaches, like the European Green Deal and the German Supply Chain Act, are setting up new principles, standards, and rules.
By Simon Jeffery and Nick Mina, Theta Insights + Modelling
Big data is no longer only whispered about in the hallways of the big tech giants. It is now something that every business has, and every business must deal with. Yet the majority of deal advisors have yet to deploy analytics within their M&A activities. This article will explore how data analytics can be used to enhance deal value;
By Thomas Parry, Regent Assay
During the Covid-19 pandemic, supermarket shelves gathered cobwebs, cars motionlessly filled driveways, and gym memberships were unceremoniously cancelled. In an attempt to navigate a world devoid of human contact, people turned to technology to maintain a semblance of normality, and the value of technology companies, both public and private, skyrocketed. Fast forward two and a half years, and Apple’s value stands at USD 2.51 trillion (capIQ, July 2022), down from the heady heights of USD 3 trillion that it achieved earlier in 2022. The NASDAQ is down almost a quarter on the year, and private investors are daring to use the “P” word – profitability – having been content to burn through capital for the past two years or so.
By Stephen Grant, Wright, Johnston & Mackenzie LLP
Following Russia’s invasion of Ukraine in February 2022, the Economic Crime (Transparency and Enforcement) Act 2022 (the “Act”) was fast-tracked through the UK Parliament and came into force on 15 March 2022, despite it progressing at a lackluster pace for some years prior.
By Anthony J. Soukenik, Sandberg Phoenix & von Gontard
At GGI’s North American Conference in Washington DC earlier this year, I had the good fortune of presenting on working together with a single purpose when clients are selling a commercial enterprise. Highlights of my presentation were as follows:
By Edward Hendrickx & Roel Jansen, EJP Financial Astronauts
If a company acquires the shares of another company, it is important to consider the tax consequences. For example, borrowing money (for the purpose of the acquisition) may lead to interest deduction limitations. It is also possible that the acquisition costs are not deductible. We will elaborate on these rules on a high level basis below. In this article, we assume that a Dutch tax resident company is the acquiring party. Also, we assume that the financing takes place with arms-length conditions.
By Prof Sergio Guerrero Rosas, Guerrero y Santana, S.C.
The extraordinary industrial and commercial development of the last century is based on the extent of economies, the integration of production processes, and the business interaction of related companies. The conjunction of these factors gives rise to an economic phenomenon that could be summed up as: the greater the accumulation of resources, the greater the profits; and the greater the profits, the greater the accumulation of resources. Consequently, it is not surprising that modern business people increasingly pursue the integration and concentration of their companies.