Houston Partner Joe Perillo, Co-Chair of the Firm's Corporate and Transactional Department and Chair of the Firm's Mergers & Acquisitions Section, was quoted in an article discussing M&A trends in 2019 and 2020. Perillo said midstream and infrastructure-related deals were plentiful in 2019. However, he noted, “Oilfield services deals suffered a bit more and were not nearly as attractive unless they had a technology component.”
Perillo also discussed the uncertain climate in 2020 due to the effects of the spread of coronavirus and the upcoming presidential election. He predicted companies might sell their businesses if capital gains rates are expected to go up based on who takes office.
“We have favorable capital gains rates right now, so people would have to figure out whether they want to sell or not,” he said.
“It’s a perfect storm in the energy sector, with lower oil prices, the conflict between Russia and Saudi Arabia, the coronavirus, the lack of capital access and redeterminations coming up,” he said. “Once the coronavirus clears up and we see where oil prices go from there, we might see activity in the third and fourth quarter if people have the opportunity to sell their businesses and the delta between buyer and seller narrows.”
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