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On March 7, 2018, ACG Boston hosted its annual M&A Outlook Conference at The UMASS Club in Boston. The keynote speech was conducted by Stephen Kolano, CFA, Director of Quantitative Research and Analytics at BNY Mellon Wealth Management.
Mr. Kolano discussed a number of critical and timely subject matters including, a summary of 2017, consumer and business confidence, the housing market, earnings and global markets that he believes are appealing from an investment standpoint. Mr. Kolano went on to note, "We don’t see any near term turbulence from an M&A standpoint."
Please see below for a brief Q&A segment with Mr. Kolano.
ACG: From a macro standpoint, do you believe there are more M&A opportunities within the private or public markets right now?
SK: From a pure available universe there are more opportunities in the private sector whereby there are roughly 3500 publicly listed companies compared with roughly 5 million private companies.
ACG: If the past year has taught us anything, it is that EBITDA multiples continue to skyrocket. With average multiples exceeding double digits, do you believe this is trend is here to stay and will continue to increase, or have we reached a “peak”?
SK: The trend in multiples tends to follow a cyclical pattern that is in part driven by expectations for future growth, confidence, and the availability of capital (i.e. credit).
ACG: Tax reform is perhaps one of, if not the, hottest topics in the financial industry right now. In your view, what is the biggest impact that this will have on the M&A market going forward?
SK: The deductibility of interest may impact the ability of companies to lever in order to perform M&A as it will alter the cash flow calculations traditionally used to evaluate deals.