The Perfect Storm
We are busy – and the abundance of activity is a result of essentially “the perfect storm,” due to not one, not two, but three fundamental drivers. The recipe for this storm situation is as follows:
Taxes (or the avoidance thereof)
Buying and selling + lots of dry powder
Litigation and Shareholder Disputes
#1 THE RAIN:
As we all know, there’s rain coming on the estate tax horizon, and given the anticipated tax changes, our phones are ringing. Previous plans that may have been put on hold are now front and center given the discussions on Capitol Hill. Our view of the potential changes and effects are: If you don’t affect the wealth transaction this year, Congress could claw back to January 1, 2022, and any transaction that occurred would be affected. They’re also talking about transactions for this year (April 2021). That is the language in the bill, but most likely that will change. You can expect some sort of retroactive date when that will change.
#2 THE THUNDER:
Boom, boom, boomers – there’s an abundance of capital in the system, with dynamic M&A activity, companies actively looking for buyers, and a general competitiveness in the market as corporate, PE, and SPAC buyers are rumbling around, seeking technology, capabilities, and other sources of advantage. Billions of dollars are moving in the economy, looking for better returns. Add in the boomers exiting businesses, fueling even more activity, and you’ve got quite the volume.
#3 THE LIGHTNING:
Fiery conflict is not going out of style. People still disagree, and now that video testimony is the norm, litigation is on the rise. In addition, shareholder buyouts are increasing, and as sellers are overestimating value, we’re seeing many disputes among parties. Our team anticipates this activity to continue throughout 2022.
To handle this perfect storm, we are, as always, very process oriented here at Quist. We provide a disciplined, consistent approach to your valuation engagement, to ensure you get the quality you expect in the time frame that is required.
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