December 1, 2017

The Deal quotes Chuck Morton in article about M&A trends in Q3

2 min

Chuck Morton was quoted in an article in The Deal on December 1, 2017, about the M&A trends in Q3 after a result of lower acquisition activity. Morton cites, "Data bears out the apparent scarcity of targets," as an indicator for record lows in acquisitions last quarter. He also added, "There's some empirical evidence indicating that the number of startup companies has slowed, which means that the number of middle-market companies that are primed for a healthy exit is shrinking. There is a risk that the pool of targets is not keeping up with the pool of private equity money. That could certainly lead to a dynamic where valuations continue to be high. Further fueling that dynamic is low cost of capital, particularly debt."

Morton also commented on tax reform impacting M&A for Q4 saying, "If it begins to appear as if there's not going to be any tax relief, I fear that that could cause a potential pullback" in middle-market M&A. There's also "very worrying sign[s] that "really highly skilled foreign workers" are choosing not to move to the United States. There's just so many aspects of the economy that rely on those really talented international workers...[Demographics] create such fundamental pressure across so many sectors. There's so much noise in the public sector that the underlying uncertainty and the way that causes rational business folks to pause is not being told. I had a deal where sellers decided to wait in part because they were concerned about capital gains taxes," which go unmentioned in the 9-page outline of the tax plan that congressional Republicans recently released."