Lead Left Interview – Marc Daniel

This week we chat with Marc Daniel, managing director, mergers and acquisitions, SunTrust Robinson Humphrey. STRH is recognized as a top provider of M&A services for deals under $500 million and has executed hundreds of transactions for private and public companies, as well as financial sponsor firms, across a wide variety of industries and market capitalizations.

The Lead Left: Marc, we served as panelists at the Middle Market Symposium in May. I thought it would be helpful for you to reprise for our readers some of your views on the state of M&A today.

Marc Daniel: Thanks, Randy. Well, between May and now there’s been no material change in general trends. M&A markets are good, not great. There are headwinds and tailwinds. Generally, Strategic M&A activity has been supported by the need to show top-line growth in an otherwise low organic growth environment, supportive debt markets, and cash sitting on a balance sheet. Separately, PE firms continue to be active acquirers not only because of availability of debt at attractive pricing but also because of an abundance of dry powder. LPs are committing new money to PE funds at the fastest pace since 2008, potentially as a result of their strong performance relative to other alternative asset classes.

Across sectors, for both buy and sell-sides, and for entrepreneurs, there’s not been much change in the toggles that move the pipeline. What drives volume is everything.

On the plus side for sellers, multiples are high, in some sectors more than others. Valuation is not thwarting buyers who are interested in deals. If they want to acquire an asset, you don’t hear “it’s too rich or pricey.”