News & Resources

Will Chinese Markets Yield M&A Opportunity in the US?

The worldwide markets are seeing volatility on the heels of China’s financial meltdown, and private equity markets are reacting in a grass roots fashion that may yield opportunities for business operators as well as investors.

Mergers and acquisitions in the small to mid-cap markets have been active over the past three years. If you bought a business in 2014 that you intend to operate on a long-term basis, then the current markets might have little to no impact on your finances or your plans. But if your business acquisition was intended to be more of an investment, or if your private equity group intended to flip the business in 2017, a dramatic downturn in your liquid portfolio might dictate the brick and mortar business you’re now holding be sold quickly to free up vital cash.

C.P. Davis at Cardinal Point Partners discussed this with William Bray recently, and believes that buying opportunities will spring up over the next couple of months as investors seek to liquidate holdings earlier than expected. Granted, this analysis may change if the markets sustain a consistent rebound but the recent volatility in China certainly look a lot like the U.S. markets in 2008 and 2009. If that is indeed the case, and with the global markets being so reliant upon one another, C.P.’s prediction makes sense.

If you are considering taking your business to market, make sure you are organized and understand the process before allowing a third party to conduct due diligence that might reveal fundamental weaknesses in your structure. Because any negative findings will necessarily result in less cash at closing.

For more information on Bray & Long’s M&A practice, contact William Bray at (704) 523-7777.