NEW YORK, Dec. 11, 2017 /PRNewswire/ -- Participants at The
Deal's 15th annual Deal Economy Conference on
Thursday, Nov. 30 heard dealmaking
professionals express concern about uncertainty and high market
valuations along with optimism that policy changes would address
that concern, creating new opportunities and as well as challenges
in the year ahead.
The audience at the day-long, forward-looking event also heard
Jim Cramer, founder of The Deal's
parent, TheStreet Inc. (NASDAQ: TST) and host of CNBC's Mad Money
with Jim Cramer, unveil 12 specific
deal predictions for the year ahead.
Kicking off the conference at the JW Marriott Essex House in
New York City, a panel on the
absence of megadeals so far in 2017 was encapsulated by Latham
& Watkins LLP partner Adel Alsani-Far, who noted that
"boards have been reluctant in an uncertain environment to engage
in mega transformative type transactions." But Alsani-Far also
noted that he expected that "that's going to change," thanks in
part to corporate tax changes that Congress is poised to enact.
In a subsequent panel on private equity, Craig Bondy, a managing director at GTCR LLC,
worried that Ebitda multiples were too high in many recent
transactions because buyers were assuming too much in the way of
cost reductions and revenue growth, respectively, from facilities
closings and deals that had yet to be completed. Bondy also noted
that due diligence that normally required months to complete was
now being done in a few days.
"You're seeing at this point in the cycle far less due diligence
getting done," Bondy said.
The panelists also commented that the many if not all the
benefits from corporate tax cuts were baked into current market
prices, meaning that expectations for further advances from the
legislation were getting ahead of themselves.
But a panel later in the day devoted to the winning strategies
of corporate dealmakers heard various members express optimism that
their companies could sustain value through their dealmaking
efforts. They contended that they were moving faster on deals with
no sacrifice of analytical acumen, thanks to the application of new
technology, including artificial intelligence. And the panelists
were confident their deals would add value as a result, though they
conceded that the challenges of achieving success grew more
daunting as the deals helped the companies grow larger.
"When you do that, you take on more risk, and you run into a
level of competition you may have not before," conceded
Brian Buchert, vice president of
corporate development and M&A at consumer products company
Church & Dwight Co. (CHD).
In the conference's keynote, TheStreet's Jim Cramer said that he expects M&A in 2018
to remain strong for competitive reasons, and he predicted that the
Walt Disney Co. (DIS) and General Electric Co. (GE) would join
Broadcom Ltd. (AVGO) in the action. "There are too many companies
vying for the same stream of revenue in the same sector," Cramer
said. In addition, he noted that dealmaking would be spurred by the
relentless disruption of industries at the hands of tech giants
Facebook Inc. (FB), Alphabet Inc. (GOOGL), Netflix Inc. (NFLX) and
Amazon.
A panel on corporate activism heard Delaware Chief Justice Leo Strine criticize annual say-on-pay
shareholder votes. "Nobody from the investment community wants
managers paid on one-year contracts," Strine said.
Finally, a panel on cyber risk stressed that the issue had
graduated from an IT job to a board level concern. "Clearly the
board is responsible" for managing the growing risk posed by cyber
risk, said Patricia Lizarraga, managing director of Hypathia
Capital Group (LLC).
Supporting underwriters for The Deal Economy Conference included
EY, Bain & Company, Ansarada, Latham & Watkins LLP,
Morrison & Foerster LLP, Pepper Hamilton LLP, Venue by
Donnelley Financial Solutions, Okapi Partners, ACA Aponix,
Workshare and Nelson Mullins Riley
& Scarborough LLP.
In 2018, The Deal will host a series of three Deal Economy
Conferences. On March 26th
at the Institute of Directors in London, Deal Economy London will explore the
shifting European dealmaking environment. The Deal will be in
Chicago on September 24th to discuss middle
market dealmaking. And the annual New York Deal Economy Conference
will next take place on November 29,
2018 in New York City.
Contact: Jonathan McReynolds,
212-321-5259, jmcreynolds at thedeal.com for sponsorship and
speaking inquiries about next year's event.
Contact: Nicole Harris,
212.321.5567, nharris at thesdeal.com for more information
about The Deal Economy Conference.
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