Adapting M&A to 21st Century Disruption 2016
September 15, 2016 | University Club of Chicago
Corporate buyers and sellers have certainly faced a challenging 2016. United Kingdom secession from the European Union, rule changes to tax inversions, a slowdown in China’s economy, a fickle Federal Reserve, and an increasing number of public companies using customized accounting methods, which can inflate income by 44%.
Most alarming, recent empirical evidence indicates that recessions follow within 12 months of record breaking M&A activity, such as seen in Q3 2007 and Q1 2000. If a recession lurks within the trough that is following the 2015 $3.305 trillion crest, corporate defaults and over-leveraged assets will line the shore as the water recedes.
While uncertainty and doubt swirl around the world, opportunities can still be found. M&A activity in the renewable energy sector continues to grow. Commodity prices will continue to put pressure on oil and gas while it is expected the high yield default rate will rise from 5% to 6.5% by the end of 2016, beginning of 2017 – a seven-year high.
Adapting M&A to 21st Century Disruption
- Examining the impact of a possible recession in the next 12 months.
- How will European Union instability impact global M&A dealmaking?
- Exploring the impact surging Chinese buyers will continue to have in the M&A market.
- Assessing opportunities in the renewable and fossil fuel energy sectors.
- Will high yield debt market volatility continue and present challenges to financing deals?
- Preparing your M&A team in becoming a “preferred acquirer” for “innovation”.
- Parsing through customized accounting methods to arrive at accurate valuations.