Corey Massella
Contributor
Corey Massella is a partner at UHY LLP and is managing director at UHY Advisors. He has more than 25 years of experience as an entrepreneur, tax and business advisor, and as a specialist in SEC accounting and audit services.
Economic uncertainty, market volatility, rising interest rates, inflation and the ongoing Ukraine-Russia conflict affected the M&A market the third quarter of 2022 to the point that deal volumes declined across the globe. Most experts agree that a recession is here or likely imminent, and even if one is not, it still is a scenario that companies must prepare for.
That said, while private equity deal activity declined only by a bit in Q3, when compared to the years prior to COVID, it actually increased slightly. As for Q4, there was already chatter, particularly in the lower U.S. mid-market, that deal volumes might increase due to the rush to close deals before the year ended.
As private equity firms continue to pursue deals, they should look to their due diligence firms and operators to ensure extra steps are taken to accurately assess and vet potential acquisition targets given the economic climate and the possibility of a recession.
Due diligence providers will need to go beyond their standard reporting checklists …
