Brendan J. Rich Quoted in Rochester Business Journal Article "What’s Ahead for Mergers and Acquisitions in 2024?"
November 22, 2023 | In The news
Breandan J. Rich, Partner and Leader of the Corporate and Mergers & Acquisitions Teams, was mentioned and quoted in Rochester Business Journal.
Brendan says the higher interest rate environment in 2023 has made the structuring of M&A transactions more challenging, forcing buyers and sellers to get more creative in structuring transactions.
Looking ahead to 2024 he expects the first and second quarter of 2024 to be largely a continuation of 2023.
“The M&A outlook for the second half of 2024 will largely depend on the interest rate environment and if the Fed stays true to the pledge of ‘higher for longer’ or if instead they will start to cut interest rates as inflation and the economy cools,” Rich said.
He explained that if interest rates come down and the economy averts a hard landing, heightened activity in the M&A market toward the back half of 2024 is anticipated. However, if interest rates remain elevated or if the Fed cuts rates due to stronger economic headwinds than are currently anticipated buyers and sellers will have to continue to be creative to get deals done.
“As a buyer in 2024 the cost of capital will remain a very important factor in structuring any deal,” Rich said. “Unless the debt markets ease up due to lower interest rates buyers will need to continue to look to more nontraditional financing sources.”
As a seller in 2024, Rich says a key factor to consider will be the valuation your business can obtain in the current interest rate and economic environment. Valuations have come down in 2023 and whether this continues in 2024 will in large part depend on the macro-economic environment.
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MERGERS AND ACQUISITIONS
CORPORATE MERGERS AND ACQUISITIONS