ACG National Capital
Next week, the National Capital Chapter of ACG will be sponsoring their annual Mid-Atlantic Growth Conference, bringing together C-level executives and other senior business leaders from across the east coast to network, discuss business best practices, and share lessons learned about how to improve and grow their organizations.
In anticipation of this exciting annual event, Corporate Growth, Capital Style has published a series of interviews with the speakers, attendees, and organizers of the conference. In our last interview, we sat down with Chuck Carr, an audit partner and the Washington Metro technology and life sciences industry practices leader at RSM US LLP (RSM). Chuck is a second-year veteran as co-chair for the Mid-Atlantic Growth Conference and shared his thoughts with us on how corporate growth has changed over the past year.
In today’s interview, we sat down with Shawn Hoyer, Senior Vice President, Bank of America Merrill Lynch Global Middle Market Banking who shared his insights into corporate growth trends impacting the nation as well as locally within the National Capital region. Here’s what he had to say:
Corporate Growth Capital Style (CGCS): You’ll be moderating a session titled “Lessons from the M&A Playbook” at next week’s Mid-Atlantic Growth Conference. Can you give us a preview on the session? At a high level what do you plan on covering?
Shawn Hoyer: We’re very fortunate to have two area CEOs, Michele Kang of Cognosante, and Rick Calder of GTT, joining us to share their perspectives on M&A, as both executives completed material acquisitions in 2016.
Statistical data is stacked against the acquirer with 70-90% of acquisitions failing to live up to expectations, so we’ll look to Michele and Rick on how they think about M&A, their personal, and professional process. They’ll provide their thoughts on identifying assets, rationalizing synergies, the execution team and cultural integration.
CGCS: Can you talk about M&A trends this year? What industries or sectors do you think will be most impacted by M&A activity this year?
Shawn Hoyer: It’s a good time to be a seller – across the board from traditional metal-benders to software companies, multiples are up. Too many dollars chasing too few growth assets. Strategic buyers and financial sponsors continue to create competitive tension to the benefit of sellers.
Given current administration expectations, industries that will see increased activity will include healthcare and government services. The continued desire for growth assets and lack of public issuance, software continues to see strong demand and climbing valuations as a multiple of revenue.
CGCS: How do you anticipate M&A activity changing in 2017? Will activity increase, decrease or stay consistent? Why?
Shawn Hoyer: In addition to secular trends in healthcare, tax reform, and potential repatriation of overseas cash could have a material impact in 2017. During the Homeland Investment Act of 2005, over $300 billion was repatriated.
Today, it’s estimated over $3.5 trillion in undistributed foreign earnings ($2 trillion in cash) would qualify for repatriation. The expected impact would be a portion of this cash being put to work in M&A, again, having a positive impact on valuation multiples.
CGCS: What predictions or expectations do you have for businesses within the National Capital region in 2017 and beyond?
For additional information about this year’s Mid-Atlantic Growth Conference, click the photo above.
Shawn Hoyer: The National Capital region continues to see diversification of business sectors with robust growth in consumer and retail, software, healthcare IT and cybersecurity companies, all attracting capital from top venture and private equity firms. Strategic buyers continue to look to this region for growth assets, cutting-edge technology and talent.
With continued market receptivity, it’s likely we’ll see a few technology IPOs in ’17, locally, with several more companies having visibility to liquidity events in ’18. In sectors such as cybersecurity that have become highly-fragmented, it’s likely consolidation will begin to accelerate with companies seeking to gain size and scale by combining efforts.
CGCS: We’re rapidly approaching the annual Mid-Atlantic Growth Conference. In your experience, what are the biggest benefits to attendance at the MAGC? Who should try to attend the MAGC, and what will they get out of attendance?
Shawn Hoyer: I’m very excited about this year’s conference. We’re fortunate to have some amazing keynote speakers like David Trone who has built one of the nation’s largest retailers from its headquarters in Bethesda to one of the most committed investors to the region, Revolution Growth, sharing their thoughts on venture capital investing and of course, Rudy Giuliani.
Our panelists are top-shelf executives leading some of the region’s most dynamic companies and attendees will have the opportunity to hear first-hand how they think about strategic business decisions.
Additionally, this event draws some of the nation’s top financial sponsors eager to invest capital. It’s a one-day event that promotes an ecosystem of executives, financial sponsors, and service providers all with the desire to create more valuable companies and further the Mid-Atlantic region as an ideal landscape for innovation.