In the second segment of this podcast, ButcherJoseph & Co. Managing Director Jeff Buettner helps untangle the complicated terrain of the current market shifts and explores how they impact valuations, deal structures, strategic buyers, and private equity firms. Jeff dives into the ripple effects of Federal Reserve interest rate changes, the challenges, and opportunities these shifts bring, and how to expertly maneuver the M&A, private equity, and real estate sectors amidst these changes. Below is a snapshot of the most recent M&A data that is behind our conversation.

Top Three Takeaways

  • Rising interest rates are affecting the M&A and real estate market: Higher rates are leading to a wider bid-ask spread in M&A and potential slowdowns in real estate deals, with implications for private equity firms and founder-led businesses.
  • The increased role of financial instruments such as warrants and ESOPs: Given the rising interest rates and potential tax changes, businesses can potentially leverage these instruments to balance their capital structure and align stakeholders’ interests.
  • The importance of monitoring your regional bank’s health and policies: Understanding your bank’s financial position and establishing secondary relationships can help mitigate the risk of overexposure to a single financial institution.

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