Good morning, Dealmakers. MK Flynn here in New York with the US edition of the Wire.
Private equity folks are increasingly predicting that 2025 will be a great year for dealmaking.
Some of the optimism stems from pent-up demand after the transaction slump in 2024. As Thoma Bravo’s Orlando Bravo told me recently: “The cash that is sitting in private equity will have to be put to work, and time is ticking. And that cash is not there indefinitely. Capital needs to be returned to LPs.”
The latest potential boost to M&A can be found in the election outcome. Dealmakers are telling us they expect more favorable tax policies and less regulation from the incoming administration to accelerate M&A.
Today, we’ve got some comments about the election impact on rollups from Houlihan Lokey, below.
If you’d care to weigh in with your outlook for PE deals in 2025, I’d love to hear from you at mk.flynn@pei.group
In the meantime, my inbox is filling up with interest in PE Hub’s Deals of the Year Awards. We opened up the nomination process at the end of last month, and submissions are due Friday, January 10, 2025. I’ll recap some of the details below.
And finally, Obey Martin Manayiti has been looking into private equity investments leveraging the modernization of the US Department of Defense, which seems like an appropriate topic to mention as the nation observes Veterans Day.
Election impact
Last week, PE Hub shared insights from Carlyle CEO Harvey Schwartzand others about the potential impact of the election outcome on dealmaking.
Obey reached out to Justin Abelow, managing director in Houlihan Lokey’s financial sponsors group, for his reaction.
Upgrade to the premium version to read his insights.
Deals of the year
PE Hub is now accepting nominations for the 35th annual Deal of the Year Awards, which honor exceptional buyouts that were fully or mostly realized in 2024.
The deadline for submission is Friday, January 10, 2025. Winners will be selected in six categories, plus an overall winner, and the results will be published on pehub.com in March.
Click here to submit your nomination.
In the past, the awards selection process was led by the Buyouts team, with participation from the PE Hub team. To reflect PE Hub’s focus on deals and dealmakers, PE Hub is now leading the project. If you have any questions, please send an e-mail to me at mk.flynn@pei.group.
Selection of the winners is at the sole discretion of the PE Hub editorial team and will include input from PEI Group’s awards judging panel, which includes Craig McGlashan, Chris Witkowsky, Adam Le and me. Bios for all the PEI Group awards judges can be found here.
Here are the categories, which have been revamped this year:
- Large-Cap North America – recognizing the sale of a company with an enterprise value at the time of the exit of $1 billion or more
- Large-Cap Europe – recognizing the sale of a company with an enterprise value at the time of the exit of $1 billion or more
- Mid-Cap North America – recognizing the sale of a company with an enterprise value at the time of the exit of $200 million to $1 billion
- Mid-Cap Europe – recognizing the sale of a company with an enterprise value at the time of the exit of $200 million to $1 billion
- Small-Cap North America – recognizing the sale of a company with an enterprise value at the time of the exit of $100 million to $200 million
- Small-Cap Europe – recognizing the sale of a company with an enterprise value at the time of the exit of $100 million to $200 million
- Deal of the Year – recognizing one of the category winners as the best LBO exit of 2024. This will be given to the single deal that stands out for its innovation and execution. There is no separate nomination for this category.
Location, location, location
One question some of you have asked is about is what counts as a deal for the North America categories and what counts as a deal for the Europe categories. The answer lies in the headquarters of the company being sold. If the company is located in North America, then submit a nomination for the appropriate North America category. If the company is located in Europe, submit a nomination for the appropriate Europe category. (The private equity firm can be located anywhere.)
Modern military
As we observe Veterans Day today, I want to call your attention to Obey Martin Manayiti’s story from last week about Sagewind Capital’s acquisition of Sabel Systems, a provider of digital engineering research and development services for the defense industry.
The deal is an example of private equity firms leveraging opportunities stemming from the US Department of Defense’s 2023 strategy to “integrate and modernize operations in the information environment.”
Tomorrow, Obey will have an interview with OceanSound Partners about its acquisition of Antenna Research Associates, a provider of integrated radio frequency and advanced communications products to the aerospace and defense markets.
Nina Lindholm will write the Europe Wire on Tuesday, and Obey will bring you the US Wire.
All the best,
MK
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