This podcast discusses the impact of antitrust scrutiny on M&A deals in the technology sector, the challenges faced by private companies in raising money, the relationship between private equity and antitrust regulations, and the effects of Russia's invasion of Ukraine on energy policy and ESG considerations.
Increased antitrust scrutiny is leading to longer M&A deal timelines and emphasizing the importance of closure certainty.
Private equity firms must navigate both Washington's increased scrutiny and activism, while expanding their shareholder bases.
Deep dives
Increased scrutiny on technology mergers
The podcast discusses how regulatory agencies like the FTC and DOJ are applying increased scrutiny to technology mergers, especially involving large players like Facebook and Meta. The government is evaluating transactions, even smaller ones, to manage the control stakes of these companies. The current administration's antitrust policies are being closely observed, along with the regulation of transactions involving overseas entities through CFIUS. The advice given to clients is to extend the timeline for deal closings and be aware of the transactions that will receive incremental scrutiny.
Challenges of valuing private assets
The podcast explores the challenges of valuing private assets, particularly in relation to public market volatility and fluctuations in valuations. Private companies facing reduced access to venture capital and less attractive valuations in the IPO market are considering M&A as a means to monetize their investments or take their businesses to the next level. Private equity buyers are presented as potential acquirers, given their financial standalone nature and domain specializations. However, valuations for private assets may not adjust as quickly as public market valuations, requiring careful consideration of strategic fit and the impact of not making the acquisition.
Private equity, Washington scrutiny, and activism
The podcast discusses the relationship between private equity firms, Washington's increased scrutiny, and activism. Private equity firms are recognizing the need to expand their shareholder bases, while also navigating public perception and government regulations related to ESG considerations. There is an awareness of private equity's role in market concentration, leading to a cautious approach in Washington to strike a balance between preventing excessive consolidation and ensuring economic growth. Activism in the market is expected to increase, with both private equity players and institutional investors pushing for higher stock prices. Companies are advised to be prepared for potential activist campaigns by educating their board and stakeholders.