By coinnews 
00:00 Alison Morrow
Several merger and acquisition deals announced recently, including Salesforce reaching an $8 billion deal for Informatica, Dicks Sporting Goods to buy Foot Locker for $2.4 billion, and Elf Beauty acquiring Haley Bieber’s Rhode for up to a billion dollars. So, could this be the start of a new renewed wave of M&A activity? Our next guest says that there are reasons to be cautiously optimistic that the trend could continue joining us now. We’ve got Mark Cooper, Solomon Partners CEO. Mark, it’s always great to speak with you. Thank you for making time for Yahoo Finance this morning. Talk to me about what you’re seeing and how that’s informing your outlook for M&A over the next couple of quarters here.
00:56 Mark Cooper
Well, Madison, thanks for having me on. Uh, it’s been a pretty good M&A market, as you’ve just noted, on the on the corporate side, where the the challenges have been is on the on the private equity side. So I think the corporations who are looking to solidify market share or looking to gain critical mass, uh see this as a really nice opportunity to acquire at reasonable prices without uh the competition from private equity. But the real problem and what’s holding the breadth of the market down is the private equity community is not participating.
01:57 Alison Morrow
And what would it take for that participation to come back in, Mark?
02:03 Mark Cooper
Well, I think there are a number of things. Uh, clearly there’s all the issues that we’re dealing with now in tariffs and other effects on uh economic behavior. But I think the the to my mind, if you take one issue and say that’s the one that’s going to drive it, it’s going to be interest rates. It’s about it’s about price. And the challenge for PE is they made a number of acquisitions, a lot of acquisitions back in the 2021 era, post uh post-pandemic zero interest rates, and they made them at, you know, pretty reasonable prices. Uh and it’s hard to get back there. And as you know, uh prices go up with interest rates going down.
03:52 Alison Morrow
Yeah, absolutely, Mark. My guest host Paul Gruenwald has a question for you as well.
04:00 Paul Gruenwald
Yeah, hey Mark. I think you partially answered it, but yeah, I was going to ask the uh drivers. It looks like the Fed is on hold for a while, right? They’re going to be uh looking at the impact of the the tariffs, and the labor market still looks reasonably strong. We don’t have any cuts uh till later in the year. So if that’s the scenario, um you announced a couple of, you know, we announced a couple of deals a minute or two ago. Is that just a bump or are we going to trend higher, or are we just going to be wait and see and uh uh watch the rate market and watch tariffs?
04:59 Mark Cooper
You’re going to continue to see strategic transactions. Uh and there’s plenty going on. Last year, we had uh the best year in Solomon Partners history, and it was largely driven by our strategic activity with a fairly modest PE market. Uh where the breadth of the market is, as we know, is driven by private equity with a lot of the deal flow, maybe not the volume, but the deal flow. Uh and when you have 29,000 portfolio companies uh that are owned in the private equity community that have, I don’t know, on average six or seven year average life, which is far more far longer than normal, they got to move them out. They got to trade. That’s where you’re going to see uh a real surge in the market. Meanwhile, the markets are open. And if I tell you we look at our business, we look at uh how much active pitching activity, how much preparation uh with our sell-side activity with private equity, it’s a lot. The question is, are those deals going to get out there? Are they going to get done?
07:02 Alison Morrow
Well, talk to me, Mark, about one thing that is a potential headwind we haven’t spoken about, which is regulatory pushback here. Uh noting that Synopsis did get FTC approval for that $34 billion deal to acquire Ansys, does that give you hope that the regulatory potential headwind is somewhat removed under this administration? How are you thinking about that?
07:35 Mark Cooper
Oh, it’s going to be far better than what we’ve dealt with. Uh they’ve already uh they’ve already reinstated early termination, which was something that the prior administration had taken out. So transactions can come out of review before 30 days. Uh and uh I believe there will be a far more uh accommodative uh uh regulatory process. And I think, by the way, in general, if we think about the drivers of long-term uh activity, uh deregulation is a big issue, both deregulation in the FTC, as well as deregulation across uh many of the industries uh that are subject to engaging in M&A.