U.S. Dealmakers See Opportunity in New Administration

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Jacob Wolinsky
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New Report from Pillsbury and Mergermarket Finds U.S. Dealmakers See Opportunity in New Administration, Are Ready to Capitalize

Driven by Digital Transformation, 92% of Respondents Plan to Execute Deals in 2021

Q1 2021 hedge fund letters, conferences and more

New York, NY (June 22, 2021) —According to a new M&A report from Pillsbury, not only has the United States deal market stabilized, but investors overwhelmingly believe M&A activity is primed for significantly more growth in the near-term. The firm found that a whopping 92% of industry participants they surveyed expect to undertake M&A transactions this year, with fully half planning even larger deals.

Published in conjunction with Mergermarket, Pillsbury’s US M&A: State of Affairs and Outlook Under the Biden-Harris Administration report reflects Q1 surveys of one hundred-fifty U.S.-based corporate and private equity executives. Respondents were asked to share their insights into how the new U.S. presidential administration might impact M&A in the United States.

M&A activity

M&A activity

Overall, the results point towards a significant increase in deal volume in 2021. 59% of corporate respondents anticipate closing between 1-3 M&A deals over the next 12 months, and 25% expect to complete four or more. Just 7% reported undertaking that many deals in 2020. Those on the PE side are even more bullish. While one-quarter of private equity-focused respondents say they completed four or more deals in 2020, 56% expect to meet or exceed that threshold in the next 12 months.

Other Key findings from the report include:

  • Respondents largely agree the Biden-Harris administration will have a positive impact on M&A: 64% of corporates and 60% of PE firms surveyed say the administration will be either conducive or very conducive for their dealmaking in the US.
  • The key driver of M&A activity over the next 12 months will be pursuing digital transformation: 24% (the largest such share) of respondents identify this as the most significant factor, and a further 19% cite it as their number-two concern.
  • Rising regulatory scrutiny is by far the most significant risk to respondents’ dealmaking over the next 12 months. 45% identified it as their primary concern, followed—at some distance—by geopolitical concerns/US trade policy (16%) and higher corporate tax rates (13%).
  • Both corporate and PE respondents expect most of their deals over the next 12 months will be domestic. Corporates are far more likely to consider cross-border transactions however, with one-third of those respondents suggesting interest in international deals (as opposed to only 27% for PE respondents).

M&A activity

“Clearly, executives expect US M&A dealmaking to continue to grow in the near term, with significant tailwinds from stimulus measures, the low cost of capital and a strong US vaccine rollout,” noted Pillsbury M&A co-leader Jon Russo.

Pillsbury advises market-leaders, innovators and financial sponsors on M&A and Private Equity transactions in the Technology, Life Sciences, Energy and Financial industries. With more than 650 lawyers located in key deal markets across the U.S., Europe, and Asia, Pillsbury is consistently ranked by Bloomberg, Factset, Refinitiv and others as one of the Top 20 most active law firms for M&A, and our lawyers have been cited by Chambers and The Legal 500 as preeminent advisers in the field.

M&A activity

About Pillsbury

Pillsbury Winthrop Shaw Pittman LLP is an international law firm with a particular focus on the technology & life sciences, energy, financial, and real estate & construction sectors. Recognized as one of the most innovative law firms by Financial Times and one of the top firms for client service by BTI Consulting, Pillsbury and its lawyers are highly regarded for their forward-thinking approach, their enthusiasm for collaborating across disciplines and their authoritative commercial awareness. To learn more, visit www.pillsburylaw.com

About Mergermarket

Mergermarket is a business development and market intelligence tool designed specifically for the M&A sector and provides proprietary intelligence and analysis on corporate strategy across the world. With around 200 M&A journalists talking directly to senior executives, dealmakers and other key players in over 60 locations globally, Mergermarket reports on the whole deal life cycle, from mapping out companies’ early stage strategic intentions to tracking deals before they develop and providing real-time news on live events, thereby creating a large window of opportunity. Subscribers can also mine for trends, patterns and deal ideas using Mergermarket’s comprehensive deals database and regular data-driven editorial analysis and commentary. Visit www.mergermarket.com to learn more.

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Jacob Wolinsky is the founder of HedgeFundAlpha (formerly ValueWalk Premium), a popular value investing and hedge fund focused intelligence service. Prior to founding the company, Jacob worked as an equity analyst focused on small caps. Jacob lives with his wife and five kids in Passaic NJ. - Email: jacob(at)hedgefundalpha.com FD: I do not purchase any equities to avoid conflict of interest and any insider information. I only purchase broad-based ETFs and mutual funds.