M&A Comeback Hinges on Private Equity, Goldman’s Feldgoise Says

A comeback in private equity activity is the key to ending an 18-month slump in dealmaking — and there are signs that’s starting to happen, according to one of Goldman Sachs Group Inc.’s top M&A bankers.

Get the week’s top news delivered directly to your inbox – Sign up for our newsletter

Sign up

“The number of take-privates has actually been at record levels,” Stephan Feldgoise, global co-head of mergers and acquisitions, said in an interview on Bloomberg TV on Thursday. “It’s been very active in terms of LBOs.”

Private equity firms — which are in the business of buying and selling companies — have driven about 35% to 38% of overall M&A activity in the past five years, he said. That volume has fallen in the past year and a half as potential sellers shied away from coming to market as valuations slumped amid rising interest rates and an uncertain economic outlook. That seems to be changing.

“You see private equity under more pressure to realize returns,” Feldgoise said. “I’m optimistic. I can’t tell you if it’s this quarter, second quarter or third quarter, but I’m optimistic that that private equity meeting of the minds between sellers and buyers is getting closer.”

The firm also expects energy, health-care and technology sectors to drive deals in 2024, he said.

“The pipeline of dialogue is as robust as we have seen,” Feldgoise said. “What the challenge has been is getting the fingers to meet on transactions.”

Goldman Sachs was the No. 1 provider of merger advice for the seventh year running in 2023, advising on 235 deals worth more than $671 billion, according to data compiled by Bloomberg.

 

Source: YahooFinance

Can’t stop reading? Read more