RA Capital

Q4 2024 M&A activity demonstrated a strong close to the calendar year with a number of notable mega-deals announced during the quarter. Notably, many of these deals highlight the latest trends permeating throughout the broader market. As public markets continued to rally towards the end of the year, take-private transactions which were prevalent during 2023 and the beginning of 2024 have taken a back seat and have been replaced with large, strategic acquisitions from corporate acquirers. Further, many private equity firms are turning to these strategic buyers to support exit activity as highlighted by GTCR selling AssuredPartners to Arthur J. Gallagher for $13.5B, reflecting a broader shift from exits via IPO or to other private equity sponsors. Stay up to date on our insights surrounding capital markets by following us on LinkedIn and visiting our News & Insights page for webinar recaps and more at https://hubs.li/Q03dlXKr0.

Over the past two years, there has been a noticeable shift from the broadly syndicated loan (“BSL”) market to private credit. As private credit funds have raised more capital, they are able to provide the debt needed to fund larger leveraged buyouts that were traditionally served by the BSL market. Offering more flexible terms, quicker execution, and greater closing certainty than a BSL lender, private credit has firmly established itself as a preferred financing partner. However, this is beginning to shift back following a recovery in the BSL market, enabling these lenders to offer more competitive rates than private credit lenders in some circumstances. Stay up to date on our insights surrounding capital markets by following us on LinkedIn and visiting our News & Insights page for webinar recaps and more at https://hubs.li/Q03ckFv40.

While early signs pointed to a potential rebound, deal activity slowed in late 2024 as the Fed signaled a pause on rate cuts and as exit conditions continue to be unfavorable. While there was notable activity within certain areas, the transaction momentum that was observed earlier in 2024 has largely tapered across capital markets. Yet, investor pressure and a backlog of exit-ready deals may still prompt some movement in the market, raising the question of whether 2025 will bring the market reopening that many previously predicted. Please join the first installment of our quarterly Private Capital Markets Update, where our hosts, Eliot Peters and Joel Weinstein, dive into the latest M&A and capital market trends. Our latest update is available on-demand for your viewing convenience at the link below: https://hubs.li/Q039tM3P0 #mergersandacquisitions #ipo #privateequity #privatedebt

RA Capital is pleased to announce the sale of Crown Technical Systems to Flex (NASDAQ: FLEX) in a transaction valued at $325 million. The RA team served as exclusive financial advisor to Crown Technical Systems. Crown is a leading manufacturer of integrated power distribution and protection systems, including electrical enclosures, medium voltage (MV) switchgear, and control & relay panels. Congratulations to all involved! Eliot Peters, Jeff Dittmer, Nick W. Marcu, Ethan Koo To learn more about the deal, visit: Transaction Announcement: https://hubs.ly/Q02YXlGh0 Closing Announcement: https://hubs.ly/Q02YXn2K0 #powergrid #utilities #ai #datacenter #renewableenergy #engineering #substation #gridmodernization

Throughout 2024, market participants have been anticipating a return to more dealmaking as macroeconomic conditions have improved. However, M&A and IPO activity have remained lethargic as would-be targets hold out for a more friendly exit environment. As a result, we are faced with questions such as “What will be the catalyst that reinvigorates investment activity?” and “How long will it take for capital market activity to substantially rebound?” Please join our panelists, Eliot Peters and Joel Weinstein, for our webinar on Wednesday, November 20th - "Are We There Yet?" We will dive into the latest M&A and capital markets trends and discuss how investors are currently approaching the market as they navigate the evolving macroeconomic environment. Link to Register: https://hubs.li/Q02W-VYj0 #mergersandacquisitions #ipo #privateequity #privatedebt

During our webinar earlier this quarter, we highlighted accounting firms in the Institutionalization of Everything?. Like many other industries that were traditionally privately held, institutional money has found these businesses and has made a quick mark on the industry. The recurring nature of the revenue and the race to become more efficient with technology have attracted large private equity firms to buy firms of all sizes, including two of the top ten firms in the United States. From what we have heard, there is more consolidation to come in this industry and private equity firms are looking to put their dry powder to work. Stay up to date on our insights surrounding capital markets by following us on LinkedIn and visiting our News & Insights page for webinar recaps and more at https://hubs.li/Q02TsyNj0.

We frequently hear from business owners who are approached with an unsolicited “offer” to acquire their company and are looking for advice on how to proceed with the offer. While these unsolicited “approaches” may present an opportunity to explore an exit to a seemingly enthusiastic counterparty, they often favor the prospective buyer and cause chips to be left on the table for the seller. How you engage with these unsolicited parties can be critical in determining the ultimate value a business obtains in a transaction process. To learn more about how RA Capital’s expertise can help you evaluate an offer, read our latest piece, “There is No Such Thing as an Unsolicited Offer for a Private Company.” #mergersandacquisitions #privateequity #investmentbanking https://hubs.li/Q02SDLYR0

In the current market environment, many are inquiring how prospective sellers are approaching the market amid an M&A backdrop characterized by compressed valuations and elevated interest rates. While dealmaking has remained stubbornly low since the current rate-tightening cycle, one group in particular stands out as continuing this trend. Private equity firms have been very reluctant sellers, especially with recent vintage funds. While this speaks to private equity’s perception that market conditions have been less than ideal for a sale, it also suggests much fewer early winners in recent funds. In fact, funds dating back as far as 2018 and beyond still have a significant amount of exits to complete. Stay up to date on our insights surrounding capital markets by following us on LinkedIn and visiting our News & Insights page for webinar recaps and more at https://hubs.li/Q02PmtXK0.

Thank you to everyone who attended our recent webinar, in which Eliot Peters and Joel Weinstein held an insightful discussion about the status of capital markets and how dealmakers are navigating the current economic environment. The theme “thawing ice” applied to several areas of the capital markets. In the VC world: despite terms remaining extremely investor-friendly, there has been a plateau of just how investor-friendly terms have gotten and the beginning of a retreat back to the norm. A further opening of the IPO market could be one of the catalysts to see this trend normalize. Stay up to date on our insights surrounding capital markets by following us on LinkedIn and visiting our News & Insights page for webinar recaps and more at https://hubs.li/Q02MVV4Y0.

Last quarter, we shared our views on how persistent interest rates are tempering investment activity across capital markets. While overall activity is still below recent record-breaking highs, deal volume is beginning to heat up as prospective investors gain greater confidence that conditions for dealmaking are improving. It remains to be seen how this will impact activity in the immediate future, however we anticipate broader deal activity will begin to rebound over the course of the second half of 2024 and into 2025. Please join our panelists, Eliot Peters and Joel Weinstein, for our webinar on Wednesday, August 21st - "Thawing Ice." We will dive into the latest M&A and capital markets trends and discuss how investors are currently approaching the market as they navigate the evolving macroeconomic environment. Link to Register: https://hubs.li/Q02KggDp0 #mergersandacquisitions #ipo #privateequity #privatedebt