ASSOCIATION FOR CORPORATE GROWTH
HERE’S THE DEAL While the COVID-19 pandemic impacted M&A activity, dealmakers are looking for bright days ahead By MICHAEL GOSSIE
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very business felt the impact of COVID-19. Whether the pandemic hurt or helped a business, the entire economic ecosystem felt a seismic shift. And the mergers and acquisitions space was not spared. “There are predominantly two different groups of buyers,” says Paul Valentine, a partner at Quarles & Brady. “You have your strategic buyers — other companies in the same industry looking to acquire other companies and grow — and then you have the private equity funds. The private equity funds really stopped M&A activity when the pandemic started. The reason for that is lenders became understandably nervous and so funding dried up.” Because banks weren’t making loans for acquisitions, Valentine says there was a period of time after the pandemic hit when it was really difficult to get a deal done. “But as we’ve gone on, Valentine says, “those lending restrictions have eased substantially and right now, we are right back where we were before the pandemic and interest rates are still really low.”
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AB | May - June 2021
One of the organizations that helps keep M&A activity of track in Arizona is the Association for Corporate Growth (ACG). Founded in 1954, ACG is the premier M&A dealmaking community with 59 chapters worldwide, including Arizona. ACG’s global network comprises more than 100,000 middle market professionals who invest, own and advise growing companies. ACG helps its members overcome obstacles, many of which presented themselves during the pandemic. “Simply meeting in person was one of the biggest initial challenges,” says Tyler Lounsbery, a principal at CliftonLarsonAllen. “It’s hard for investors to get comfortable spending millions of dollars without the opportunity to physically visit a location and look management in the eye. Many areas of due diligence were somewhat easily transitioned to be completed 100 percent remote, but most buyers still want to develop a level of relationship and comfort that can’t be replicated through Zoom calls.” John Farr, managing director of Columbia West Capital,