The financing environment has improved, providing a lift to the mergers and acquisitions market.
That was the conclusion at a private equity panel sponsored by RBC at its Consumer & Retail Conference Thursday in Boston. Panel participants included Jeff Case, managing director at Advent International Corp.; Marni Payne, managing director at Berkshire Partners, and Jeff Swenson, managing director at Thomas H. Lee Partners.
RBC analyst Brian Tunick said the panelists pointed to a strengthening of the equity and debt markets as a positive indicator for deal flow. According to Case, that bodes well for a deal in the $10 billion to $15 billion range provided the debt market continues to hold.
Tunick said that the panelists in general were optimistic about the initial public offering outlook for the second half of the year, particularly in the fourth quarter, given the dearth of IPOs from the back end of 2015 through the first half of 2016.
Payne noted that there’s a rapid need for business models to adapt to the accelerating changes in the consumer environment, and with the rise of direct-to-consumer, the barriers to entry are now lower than before. She said that those businesses with staying power are the ones that build a better experience between the consumer and the brand.
The panel participants all said they are holding their investments for a longer term duration, on average in the four-year to five-year range.