Key Takeaways

CATCH UP QUICK: From a data-driven case for in-person meetings, to an update on middle-market fundraising, here are a few of the highlights from this edition of DealMaker.

1THE DEAL RUSH The prospect of increased capital gains tax rates has accelerated M&A activity in 2021, 4 and with high investor demand, it’s been a seller’s market. But industry-watchers predict that the balance could tip back toward buyers soon, increasing the pressure on sellers to close deals as soon as possible. “The Great Compression,” p. 48.

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END OF THE ZOOM BOOM?

Although videoconferencing kept M&A alive during the lockdowns, data from Monomoy Capital Partners reveals the value of faceto-face interaction. The private equity firm’s analysis found that a deal sourced during an in-office meeting on the road is nearly 5x more likely to result in a management presentation than a deal sourced over the phone or Zoom. “In-Person Is the Essential Currency of Business Development,” p. 12.

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3WINDY CITY WINDFALL Private equity fundraising remains strong in the U.S., where 42 mid-market private equity funds were raised in 2021 through mid-July, 6 according to Preqin. Of the largest middle-market funds raised, three are household names in Chicago—thought by many to be the heartland of middle-market investing. “Chicago’s Middle-Market Veterans Haul in Billions in Banner Year for PE Fundraising,” p. 20.

PAY ON DELAY

“Buy now, pay later” providers—whose services let shoppers pay for big-ticket items in interest-free installments—may not yet be primed for private equity investment, but they’re proving their worth to businesses. A Florida-based dental group credits a buy now, pay later solution with more than $1 million in new revenue from patients who otherwise would not have been able to finance their care. “Payment Innovations Drive Investor Interest in Fintech,” p. 36.

LESS IS MORE

More sponsors are adding minority investments to their strategies as competition for deals continues to rise and founders exert more power in negotiations. Yet seasoned investors caution against using a minority position as a gateway to control and stress that aligning personalities and motives is as important as ever. “Big Little Deals,” p. 54.

NATURAL PROGRESSION

Grata, a B2B search engine for discovering small and midsize businesses, has noted a rise in search queries related to environmental, social and governance (ESG) factors. Meanwhile, inbound support requests to Grata have substantially increased in the past year, suggesting that investors are pursuing ESGfriendly targets, despite a lack of empirical evidence about these strategies. “Why ESG Is Here to Stay,” p. 40.