Massive Infrastructure Spending Plan Sparks Conversations, Driving Future Opportunity

The presidential administration created a goal of implementing a $1.5 trillion infrastructure framework. The plan has sparked numerous conversations as has subsequently created significant excitement and optimism throughout the infrastructure services industry. The logistics of the plan haven’t been finalized but many experts in the industry believe that the success of the plan will be dictated by the private sector and the role it will play in funding and executing future projects.

Throughout the last six months, many of the largest publicly traded engineering and construction companies have seen increased expectations in M&A activity because of the recent increased performance of broader equity markets. Meanwhile, the infrastructure services industry has maintained its ability to deliver a strong financial performance, backed by an ideal transportation spending outlook and positive volume trends.

When compared to the positive macroeconomic backdrop, recent trends and fluctuations are fostering evolution and growth amongst infrastructure services as the industry responds to the changing demands and new market pressures. The Public-Private Partnership (P3) Conference & Expo in Dallas educated companies on how they can successfully adapt to the changing environment and new market trends.

The P3 conference featured nearly 65 exhibitors and more than 1,350 attendees. The William Blair team presented at the conference attended several different presentations and were apart of many conversations with executives and key decision-makers at the conference. Together the team examined several of the most pressing opportunities and challenges facing the infrastructure services industry. The team evaluated the impact these trends will have on dealmaking and capital-raising activity in the infrastructure services industry.

Mark Brady on How to Make Deals Close

Mark Brady, investment banker and M&A expert, recently sat down with Alex Verkhivker to share some of the lessons he’s learned from the merger of two iconic consumer brands.

Mark Brady is the proud alumnus of the Chicago Booth School of Business. Mark attributes his longevity in M&A to the economic and financial tools he gained at Booth. Booth provided him with a powerful means of understanding markets, prices, and incentives in the M&A environment. With Verkhivker, Mark outlined lessons learned from a successful acquisition while giving advice for both buyers and sellers on getting deals to close.

In a deal involving William Blair, Mars—the makers of M&M’s—decided to acquire the Wm. Wrigley Jr. Company, the chewing-gum conglomerate, for roughly $23 billion. A merger between two multi generation-family-run businesses would create a union between two of the best-known consumer brands: Mars candy and Wrigley gum.

Like in any M&A deal, there is the potential for one company to suffer a loss of market position in the event the transaction doesn’t close. Mars and Wrigley felt comfortable about the similarities their products and cultures shared. We had the world’s two largest confectioners coming together from a distribution standpoint. We had to really think through, as representatives on the Wrigley side, whether and how Wrigley would be hurt with customers or suppliers if the deal didn’t go through.

Luckily for the William Blair team servicing this deal, the deal was completed in a matter of weeks after it was announced; but for purposes of building protection for Wrigley, the transaction had a built-in $1 billion reverse break fee should Mars have walked away from the deal. Meaning, had Mars breached its agreement to buy Wrigley, it would have had to fork over $1 billion to Wrigley.

The Mars-Wrigley deal offers some important lessons about which deals are likely to succeed and which aren’t. In most successful mergers, the transaction agreement often has termination fees that help align the interests of the target and acquirer. By having a target termination fee built into the contract negotiation, the acquirer is able to rest assured that the fee will deter its target from considering rival bids unless the price is materially higher. A reverse break fee works in a similar vein but protects the seller in case an acquirer decides to opt out. Due to the target termination and reverse break fees, both buyers and sellers are more committed to, and serious about, closing a deal.

Many studies have shown that only about half of all acquisitions are considered successful, and given that many deals actually destroy shareholder value, getting to what I call “deal certainty” involves strategically thinking about various key deal elements.

  • First, consider the right amount of competition among potential buyers if you’re on the sell side.
  • Second, I offer the following advice: if you’re a seller, be realistic about the performance expectations you communicate to your potential acquirer.
  • Third, once a seller determines that his or her prospective buyer is serious and has secured financing, setting the stage with this buyer about strategic alignment is crucial for moving toward deal certainty.

Though failed deals impose a hefty toll on acquirers and targets, thinking through some of the things I and my team at William Blair do on a daily basis can help you edge your way closer to successfully closing a deal.

William Blair’s John Cultra and Tom Wilson Receive More Accolades

William Blair closed the 2017 year on a very high note. Not only did William Blair do over $1 billion in revenue, but the firm and several of its employees received various prestigious awards for their impressive annual output. Most recently, John Cultra and Tom Wilson were named to the 2017 America’s Top 100 Financial Advisors list by Barron’s magazine this week.

John Cultra and his team members offer an impressive average of 22 years of experience in the financial industry, 12 of which have been at William Blair. Tom Wilson and his team boast an average of 26 years of experience in the financial industry with 22 years at William Blair. Both John and Tom’s teams serve high-net-worth individuals and families, foundations and endowments on investing, trust and estate planning, lending and philanthropy.

Barron’s magazine’s annual ranking is based on assets under management, revenue generated for the advisors’ firms, and the quality of advisors’ practices. Notably, Investment performance is not considered a deciding factor because clients have varied goals and risk tolerances.

William Blair’s global head of private wealth management, Ryan DeVore said “This honor recognizes the dedication and financial expertise John, Tom and their teams bring to each client they serve. These professionals truly showcase how William Blair’s independence and size benefits our clients through the collective wisdom of the firm’s research, our customized investment strategies, and our sophisticated financial planning resources. This is especially valued during this recent return of increased market volatility.”

Additionally, Tom and John were among the five William Blair advisors selected by Barron’s for its 2018 top state by state list released in March.

William Blair’s Atlanta Office Celebrates its Second Anniversary

William Blair team celebrated the anniversary of its Atlanta office. The firm celebrated by hosting a client luncheon where technology insights and trends were discussed. The Atlanta office opened in 2016 following two additional private wealth teams that were added in William Blair’s San Francisco, New York and Boston offices in 2015. The Atlanta private wealth management team of Kim Tyson Chenevey, Joel Dobbs, Craig Savage and Andy Thompson serve high-net-worth individuals and their families, business owners, foundations, and endowments.

William Blair’s global head of private wealth management group, Ryan DeVore noted that “This tremendous team has been a welcome addition to William Blair. Their financial expertise and acumen has been vital to serving our clients in Atlanta and the Southeast region. As we continue to selectively expand our private wealth and William Blair coverage across the United States, it is imperative that we continue to find wonderful professionals like the team we have in Atlanta.”

William Blair’s co-head of research group on technology, media, and communications, Bhavan Suri explained to the group that entities tied to robust data like cloud computing and storage, online retailing, and a new age of telecommunications will continue to see significant growth throughout the year. During his discussion, Suri noted that the expansion of software as a service technology and robots with artificial intelligence are two of the most exciting themes within the sector.

Congratulations to the Five William Blair Advisors Named Barron’s 2018 Top State-by-State Advisors

William Blair’s John Cultra, Dan Grant, Louise Lane, Tom Salvino and Tom Wilson were among 60 financial advisors in Illinois recognized by Barron’s Magazine in its annual state rankings of top U.S. advisors. These five advisors compile an average tenure of 30 years in financial services and 26 years at William Blair.

Barron’s top advisor list curates information provided by more than 4,000 of the country’s most productive financial advisors. These rankings are then generated by considering assets under management, regulatory record, and the quality of the advisors’ practices.

For the last 80 years, William Blair has been devoted to serving private wealth clients and providing industry-leading financial expertise to help individuals and families meet their long-term investment goals. The accolades earned by the William Blair team exemplify and represents the firm’s unwavering commitment to serving its clients.

William Blair’s Global Head of M&A, Investment Banker Mark Brady offered congratulations to the five William Blair advisors recognized by Barron’s. Brady said, ”Congratulations to John, Dan, Louise, Tom and Tom. I am proud to see my colleagues and William Blair winning recognition for the quality of our client service,” Brady said. “These accolades are examples of how William Blair has established itself as one of the top investment banks in the world.”