Acquirers May Exhibit Strong Interest in Certain Sectors
What do physics and merger & acquisition deals have in common? Plenty, it turns out. In a college physics class, for example, you might find a class of physicists and engineers learning about electronics and magnetism. The magnetic state of an object refers to how that object reacts (degree of attraction) within a magnetic field. That magnetic field rotates in a certain direction around the flow of an electrical current, and as a result, shows where the magnets would attract one another.
M&A deal flow sometimes has a similar field of attraction, where certain types of acquirers exhibit strong attractions (work with me – almost magnetic) to certain types of companies, from an investment standpoint.
The following sectors seem to be attracting the most interest:
- Healthcare: An aging population, increased spending and a constant need for healthcare-related fields all over the world make this sector a popular one for investors.
- Software: Small software companies have always been a darling of the deal community. In particular, companies with few employees or assets other than intellectual property are always attractive.
- Homeland Security: Any sector where the government is able to throw around mass quantities of money in the name of protecting the homeland draws a lot of attention from potential acquirers.
- Energy Sector Companies: Investors often like energy companies as they understand that conventional energy is derived from dwindling resources, however there is concern at the same time about the cyclical nature of the commodities consumed by conventional energy sector companies, and the wild swings in resource values.
If you have any questions related to M&A opportunities or deal issues, contact Luke Sage at LSage@cbiz.com and 858.795.2088, or you may contact us here.