Market Perspective
Sep 2024
Lincoln International’s global professionals offer insights into the private capital markets, covering M&A deal process dynamics, industry trends and more.
Summary
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Lincoln International's global professionals provide private capital market perspectives.
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What are the key factors to consider to ensure a successful process? What has the potential to adversely affect a deal?
CONSUMER
Volatile current trading: Consumers are still cautious and input price shocks and supply issues are still occurring. Set realistic / cautious near-term budgets that can be met or exceeded through a process. Buying commodities forward and hedging out currency risks to reduce input volatility. Alex Masters |
INDUSTRIALS
Significant deviations from near-term projected performance tend to be a major factor in derailing sales processes as it impacts buyers’ ability to underwrite medium-term business plans. We encourage management teams to spend significant effort in accurately building current year forecasts and reduce the element of surprise as we move along the sale process. Preet Singh |
HEALTHCARE
The number one factor if strategic buyers are involved, is allowing sufficient time to educate and warm up these organizations. Secondly, having data to support the cycle from pipeline to backlog to revenue is critically important to show the ability to convert prospects into revenue. James West |
BUILDING PRODUCTS
Poor preparation that requires company management to spend more time supporting the process than running the business, which can result in financial performance below expectations represented to buyers. Scott Molinaro |
FINANCIAL SPONSORS GROUP
Communication failures can easily derail a process. A good advisor will ensure timely, transparent and clear communication between parties from start to finish. Allison Marvel |
TECHNOLOGY, MEDIA & TELECOM
Company performance relative to expectations during a process is key, along with the ability to demonstrate positive retention trends and sales velocity in the process. Michael Fineman |
How do you foresee your sector evolving over the next five years?
BUILDING PRODUCTS
The significant underbuilding of new residential construction will act as a floor-to-construction activity and will eventually be a significant catalyst to housing starts and repair and remodel momentum. The result will be significant growth for building products manufacturers, distributors and installers over the medium to long term. Scott Molinaro |
FINANCIAL SPONSORS GROUP
Private equity may be approaching an inflection point. With competition increasing, successful investors will need to maintain price discipline while thinking creatively and aggressively about shareholder value creation. Allison Marvel |
HEALTHCARE
There are signs that unsolicited offers will be increasing in Japan. Shareholders are becoming more open to them, and the Japanese government and the Tokyo Stock Exchange are promoting it by implementing a series of regulation and framework reforms. The rapid growth of activist shareholders is accelerating this trend. Kensuke Nakatsuka |
TECHNOLOGY, MEDIA & TELECOM
We anticipate a continued shift to hyper-targeted marketing and an enhanced personalization of content across all marketing channels (traditional and digital), supported by the use of artificial intelligence and machine learning solutions. Michael Fineman |
HEALTHCARE
New outsourcing verticals and a shift from full-service providers to deep experts, where pharma is contracting ‘best of breed’ specialists, are disrupting the pharma sector. Marketing approvals for cell and gene therapies and the often highly complex supply chain requirements to bring these treatments to patients will also evolve the sector. Additionally, the higher levels of automation in consulting (including med comms, market access, regulatory, etc.) are improving efficiency. James West |
CONSUMER
We are seeing a gradual return to normal following multiple shocks for European consumers: 1) COVID-19: lockdowns, travel restrictions and supply chain shocks; 2) Ukraine: energy and broader inflation shocks and 3) cost of living crisis: decrease in consumers’ real spending power. As wages catch up with inflation, there has been an increase in discretionary spending. Companies need to design pricing, products and services to meet consumers’ needs as they spend these new marginal dollars, Euros and pounds. Alex Masters |
Meet Our Senior Team
I am a rigorous advocate for my clients with a hands-on, communicative approach, focused on delivering intense advocacy and outlier results.
Sean Bennis
Managing Director & Co-head of Industrials
ChicagoI am enthusiastic about creating sustainable growth and the highest value for our clients and strive to leave a positive footprint beyond any successful M&A transaction.
Friedrich Bieselt
Managing Director & Head of Business Services, Europe
FrankfurtI enjoy leading clients and realizing their objectives, while structuring solutions to issues that are both intriguing and challenging.
Øyvind Bjordal
Managing Director | Head of Switzerland
Zurich