Ep. 80 — Bill Casey: The 2018 Deal Market Is the Most Exciting He's Seen in 35 Years

5 min read

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Episode Summary

You’ve watched the headlines, you’ve heard tax reform got signed, and you’re sitting there wondering whether the deal market is about to run hot or whether you missed the window. Your CPA is doing your taxes. Your attorney handles your contracts. Nobody is sitting at the table telling you what 4,000 deal professionals across 17 of the top 25 transactions are actually seeing right now. I had Bill Casey from EY’s Transaction Advisory Services on the show to give us the on-the-ground read. Bill has been with EY for 35 years, built out the Latin America practice, and now leads a $2.1B global business. We got into why 75% of $5B+ companies plan on doing deals in the next 12 months, why the divestiture market is hitting record activity (90% of companies considering one), how sector convergence is changing who the buyers actually are, and why getting your financial, tax, and legal house in order before a buyer shows up is the single highest-leverage thing you can do as an owner. We also got into the strategic vs. financial buyer trade-off, how to think about cash vs. stock, and why your management team’s shared vision is what closes deals or kills them.

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## Top 10 Takeaways
  1. Optimism in the deal market is at historic levels: 75% of $5B+ companies plan to do deals in the next 12 months.
  2. Tax reform removed the uncertainty that was holding deals back, and certainty is what frees the deal market.
  3. The divestiture side is just as hot. Close to 90% of companies are considering a divestment in 2018.
  4. Sector convergence is changing who your buyer is. Auto companies now see themselves as tech companies.
  5. Culture beats strategy. Integration fails when the acquirer pushes synergy capture too fast.
  6. Do your own diligence before the buyer does theirs. Surprises in their diligence kill price and momentum.
  7. Your management team’s ability to articulate the value of the business is what holds price when deals get hard.
  8. Strategic vs. financial buyer is not just about price. It’s about your role, your timeline, and your next chapter.
  9. A B-team with an A business plan loses to an A-team with a B plan. Bet on the people every time.
  10. Time is never on your side in a deal. Speed to close eliminates the uncertainty that erodes value.

Sound Bites

“75% of these companies plan on doing deals within the next 12 months. I mean these are historic levels of confidence within this market.” (@TBD) — Bill Casey

“Culture always beats strategy. Getting the culture right is by far the most challenging aspect of integrating two businesses.” (@TBD) — Bill Casey

“The last thing you want to have happen is for a prospective buyer to find problems, challenges, inconsistencies in your financial data, your tax data. You want to do your own internal diligence first.” (@TBD) — Bill Casey

“Do you go with a management team and a B business plan, or do you go with an A business plan and a B management team? The answer is you need the A team if you want to be successful.” (@TBD) — Bill Casey

About This Episode

Bill Casey is a 35-year veteran of EY and a senior leader in the firm’s Transaction Advisory Services practice, a $2.1B global business with 4,000 professionals that has worked on 17 of the top 25 deals in the US. Bill started his career in audit, moved into transaction diligence early on, and built out EY’s transaction practice in Latin America from São Paulo before returning to the States. He brings a rare cross-section of perspective: large-cap and middle-market, strategic and private equity, US and cross-border. This episode was recorded right after EY released its semi-annual Capital Confidence Barometer, giving owners a direct read on the 2018 deal market from one of the people sitting closest to the data.

Resources Mentioned

  • EY Capital Confidence Barometer — EY’s semi-annual survey of corporate and private equity deal professionals on M&A confidence and trends.
  • EY Transaction Advisory Services — The 4,000-person, $2.1B practice Bill helps lead.
  • Bill Casey on LinkedIn — Best way to reach Bill directly.

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