00:00Ethan, just want to keep an eye on that regulatory antitrust, conservative uncertainty.
00:04Are you getting the sense that's top of mind and just thinking ahead towards midterms later
00:08this year? We're not too far from 2028 when another U.S. presidential election will take
00:12place. No, regulatory is certainly top of mind. You know, in the boardroom,
00:17when you're thinking about M&A, it's not high frequency trading. You have to sit there,
00:22let the bread leaven, right? It's got to really get everything in order. And regulatory is top
00:28of mind, just like financing. Regulatory, you know, last time I was on, I talked about the
00:33horseshoe, how the progressives and the populists coming in with Trump have a lot in common. They
00:37kept the merger guidelines. But then there's been some changes. Gail Slater left. There's been a lot
00:44more politics. But one of the things that my clients are thinking about is we don't only want
00:50to play politics. Sometimes we want to just keep politics out and we want to do things the right
00:55way technically. But sometimes you have to involve some people and actually hire them and put them
01:01on the sideline, right? Because you don't want your deal always to be a topic on truth social
01:06or something like that. So you have to have a White House strategy. You also have to have a strategy
01:10for dealing with the agencies and get your technical chops down. There's another big wild card that's
01:17emerged recently, and that is state attorney generals. So even if you have your White House strategy
01:22and everything's in order, even if you're able to convince DOJ or FTC that you're okay,
01:28the state attorney generals are another force and they will act in a bipartisan way and they will
01:34sue. If you look at Live Nation, Ticketmaster, that's settled with the feds. They're still going
01:39in trial with the state AGs. Next Star Tegna, again, a bipartisan group of state AGs are challenging
01:47that. So you have to really play all the different dimensions. But how do you navigate that or how do
01:52you suggest C-suites navigate that just given how deals like these can be delayed, they can take much
01:58longer, and obviously you can have kind of a shuffling of seats at the government level.
02:03Yeah, you really have to. Now there's a view among many that this is a great time to act. So
02:08we're seeing
02:09transformative M&A. I think we're going to see even more transformative M&A in the next few months.
02:13But there will be some folks who trip because there will be, if there's a change in Washington,
02:20in one of the houses, we'll have hearings, a lot more information will come out. There'll be more
02:24pressure on these state AGs to act. There may be more pressure on some of the people who
02:29traditionally have worked for a long time at the agencies. So you really have to have your chops
02:34and you have to have your advisors on multiple levels in order. You have to have multiple narratives
02:38in order. And then there's also multi jurisdictions. We're talking also about outside the US where
02:44there's review that's pretty significant. Yeah, certainly. Well, at least when it comes
02:48to the midterms, we're getting closer and closer. So it'll be interesting to see if that affects the
02:53M&A landscape at all and how advisors are sort of handling the political environment. But I want to
02:59go to this section in your notes because you break out the different types of M&A as you see
03:04them
03:04into buckets. And, you know, you list trophy M&A, growth, fear, synergy. The list goes on. And I'm
03:10curious. I mean, the M&A that we've seen year to date, as we were just talking about with Ryan,
03:15really a record breaking first quarter. What is sort of the defining feature of the types of deals
03:20that we've seen thus far? Well, I think we've seen some trophy M&A. I think you could put paramount
03:26in that category. Very political. Yeah, political. But also it's there's excess wealth. People are
03:31investing that money. They want to go for these big targets. I think, you know, we're going to see
03:37there's still a lot of money coming from the Middle East going for high profile consumer targets.
03:42I think we're going to start seeing what I call fear M&A, where there's companies that either have
03:47been riding the wave of the data centers, but they know it won't last forever, or they're a loser.
03:53And maybe some software companies. And now is a time for both those companies to consolidate,
03:58get some synergies, be stronger for what comes next. I also think, notwithstanding what Ryan
04:03was saying about how software M&A is not necessarily happening, you know, a lot of founders who have
04:09their companies public are not happy with the stock price, not happy with the scrutiny, think the
04:13company's undervalued. I could see them partnering with sponsors. I could also and taking companies
04:19private. I could also see activists supporting that really strongly because they're they could say
04:24now's the time to exit. So let's do those deals. But how do those conversations play out? Because
04:28if I come to my management committee or my board and say, hey, I want to acquire this company.
04:33And the concern is, well, five years from now, will their software really exist? How does that play out?
04:39Well, if so, a lot of it has to do with price. But I think there will be pressure for
04:43sure on these
04:44companies. Also, if we start having any IPOs of some of the major AI players, we're going to have more
04:50visibility into their finances. There's going to be more pressure on them. So then they're going to
04:54have more pressure to eat the lunch of some of these software companies. But nonetheless, there's
05:00there are synergies to bring in certain types of cyber security into some of the big tech players.
05:08There's lots of advantages to putting these guys together. And I also think the sponsors, when the
05:13price is right, will do the math and they'll see that some of these take private still make sense in
05:18the
05:19software space. Some potential big AI IPOs, perhaps in open AI, perhaps in Anthropic. That's the world
05:26that Bailey lives in. But I just want to crystallize that point. So you're saying, you know,
05:31if you did see some of these, you know, really big titans come in, become public companies that
05:37that might sort of encourage some of the little guys to maybe combine together and sort of that
05:42fear based M&A. Yeah, I think there's going to be pressure on them because there's going to be
05:46pressure on the big AI guys to go in and do what they're doing because they're going to be have
05:50to
05:51report every quarter. It's not going to be it's, you know, the a lot of the glamour that exists now
05:55and not and not in the lack of transparency is going to be over.
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