Watch: A conversation on today's M&A market

On Wednesday, September 28, Axios business editor Dan Primack and technology and business reporter Kia Kokalitcheva led conversations looking at what’s in the pipeline for the M&A market heading into next year. Guests included Forerunner Ventures founder and managing partner Kirsten Green and Citi Global M&A vice chair Christina Mohr.

Kirsten Green discussed how today’s market uncertainty can be an opportunity for strategic dealmaking and how companies and investors are responding to decreased valuations.

• On the current state of M&A: “I think that this year this is kind of in some ways, it is a really good environment for M&A. It’s an environment where people are coming out of the pandemic with strong balance sheets and valuations are in flux, and in the most part, particularly in the public markets, they’re obviously down and depressed. And so I think that it’s a time where strategics are thinking about is it [an] opportunistic time for us to go in and access new channels of business, form new partnerships.”
• On if founders stepping back from their companies signals a willingness to be sold: “Absolutely not. I actually think it’s really good hygiene that it’s becoming more kind of acceptable practice for leadership transitions to happen. The person that starts a company versus the person that takes the company public, the skill sets that are needed in those two different ends of the spectrum are really, really different.” 

Christina Mohr highlighted some of the factors that have contributed to a slowdown in deals and what she expects for dealmaking activity once volatility begins to subside. 

• On what’s driving the decrease in dealmaking: “I think that there is obviously uncertainty with respect to both the progress of the stock market, the progress of interest rates and certainly some of the geopolitical triggers have slowed dealmaking somewhat. I think that that’s temporary, however, and that when you actually start to look at the prospects for abnormal or extraordinary values in this market, that I think that we will begin to see at least the level of conversation increase.”
• On continued dealmaking despite economic slowdown: “Looking forward, I think that what we’ll see is that if volatility begins to subside, what you’ll see is that corporate acquirers have historically used these types of recessionary periods to build their business. And if you look at this from the perspective of a corporate acquirer, it’s really about building their business worldwide, adding to their capabilities and indeed continuing to grow their corporation to the benefit of their investors, employees and stakeholders. So M&A continues to be an important part of every corporate toolkit through recession.”

In the View from the Top segment, Cooley partner and M&A co-chair Jamie Kathleen Leigh explained how recent market volatility has impacted dealmaking strategies for both companies and potential buyers.  

• “Today’s buyers are looking for bargains, immediate accretion or bolt-on products, and there’s way less competition for assets in the marketplace today. So this is an opportunistic window for savvy, confident buyers. Now, on the sell side for strategics, well-funded companies are not in the market to sell. Most are hunkering down with adequate cash on hand to focus on core competencies until better valuations return.”

Thank you Cooley for sponsoring this event.