As we had long forecast, the higher central banks raise interest rates, the lower the Merger and Acquisition trend… which hit record highs at the height of the COVID War in 2021 when interest rates sank and governments pumped in countless trillions to artificially prop up sinking economies.
As we have continued to detail, it is important to understand that while M&A activity will continue to slow down as interest rates remain high, the worsening economic conditions will bring revenues of struggling companies down, making it cheaper for the “Bigs” to buy out those in economic distress. This in turn will continue to shrink the competitive landscape in many business sectors.
KKR SET TO PAY $1.3 BILLION FOR SPECIALTY CHEMICALS FIRM
KKR, one of the world’s largest buyout specialists, has agreed to buy Chase Corp., which owns more than 20 brands of sealants, adhesives, coatings, and other chemicals for a spectrum of industries.
KKR will buy all shares of Chase for $127.50 each, a 3.6-percent premium to the closing price on 9 June, the date The Wall Street Journal broke news of the companies’ negotiations.
Chase has predicted an increase in business due to the boom in U.S. infrastructure spending, improvements due to be made to electricity grids, and growing sales of solar panels and wind turbines.
KKR has been especially acquisitive recently. It paid $1.8 billion last month for Circor, a maker of pumps and valves.
Both the Chase and Circor deals involve debt, which has been harder to find since banks have tightened lending standards and are trying to sell troubled loans they made while interest rates were cheap and markets were strong.