One consultant’s take: ‘I’ve never seen people so positive’

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12/16/2016

I was on the phone this week with a seasoned consultant who advises medical device companies on strategic plans and M&A. He said he’s gearing up for a very busy 2017.

“Since the election, I’ve been working with a number of companies on strategic plans,” he told me. “I though it might take them half way into next year to make moves—that they wanted to see the ‘proof in the pudding’ of a more business-friendly administration—but people are making moves already. They’re looking to hire people; they’re looking to expand their manufacturing.

“I’ve never seen people so positive,” he continued. “One CEO who I always kid as being negative—I’ve never seen him so positive.”

The consultant had a number of anecdotes: Companies looking to add plants or expand existing plants; a company that moved jobs to Mexico—“It drove the CEO crazy to have to do that,” he said—that plans to move them back.

Private equity firms will also be more active in 2017, the consultant, who’s logged up to 100 deals in his career, told me.

“There’s so much private equity money sitting out there,” he said. “PE firms have always been able to buy cheaper because they’re financial buyers. To get deals done now, they’re realizing they need to up their game, because strategic buyers are willing to pay a good price. PE firms have realized they have to sit on the sidelines or pay better valuations, and you can only sit on the sidelines for so long.”

The consultant credits Trump and his emerging cabinet picks as the largest motivating factor for companies lining up an active 2017.

“You don’t become a billionaire by being a lackey,” he said. “He’s getting some strong people in there. When you see successful people in those positions, it drives other people to be positive about their success.”