Market Volatility, Tariffs & the Future of M&A with Rick Kes of RSM 4-7-25
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How are tariffs and market volatility impacting M&A deal activity?
This is Scott Becker with the Becker Private Equity and Business Podcast. We're thrilled today to visit with Rick Kess of RSM. Rick is one of our most listened to guests. Rick, this is a week where last week President Trump implemented tariffs. This has led to a little bit of a stock market meltdown. Give us a sense. Is this stock market meltdown, the tariffs, is that going to freeze M&A deal activity? What are you hearing? What is your sense of what the atmosphere is going to look like?
Yeah, Scott, I mean, I think, you know, some respects you know not to punt on the question but it's a little early to totally understand you know what the deal environment will look like post you know last week um but i think you know kind of the early chirpings that we're hearing early indications that we're hearing is you know just like anything uncertainty creates a likelihood that um deal activity won't be as you know, robust as we would have thought without uncertainty. So I think it just adds another layer of uncertainty to the other items that we've already had that layered upon layers of more and more uncertainty that I think, you know, it could create a little bit of lag in terms of some of the deals that maybe would have gone into the pipeline, you know, this week, next week, or the week after, you know, you might see some slowing in that just to see kind of what,
not only the public markets, but other private markets, et cetera, would have in terms of reaction to the news and the effects that we're seeing in the public market last week and earlier today.
Yes, but I think your point is so well taken. It is so easy for all of us, I'm included in this, to be nervous Nellies and see the market meltdown Thursday and Friday morning, The media in part loves this because it gives everybody something exciting to talk about. And it's certainly scary for a lot of Americans and others that have money in the stock markets and the equities markets. So it's scary for all of us when they drop 10, 12% over a couple days. But to your point, the market's bouncing back just a little bit today. At least it's not tanking some more. And It takes a few weeks to see how these things play out. Is that a fair sentiment to see where this really goes?
Yeah, I mean, I think you put yourself back to, you know, 2020 and you saw the volatility we saw during the pandemic. Now, this is obviously not a global pandemic. This is something much different than that. You know, there was a ton of volatility then. And then the reaction was probably more positive than anybody would have expected fairly shortly after that. So could there be reaction that would be positive from this? I'm not sure. It's probably... too uncertain to know at this point in time. But, you know, again, I'd say it's more, we're still in the area of uncertainty, not certainty as it relates to what this will do for the rest of 2025 and the deal environment for private equity.
Thank you. And it is fascinating to see some of these major voices in business, Jamie Dimon, Larry Fink, I won't put Rick Kess in that category yet because you've not spoken out about tariffs, but Elon Musk, Jamie Dimon, Bill Ackman have all sort of weighed in a little bit on how tariffs can be challenging, sort of joining that conga line of people that are very concerned about tariffs. But we'll see how it plays out, right?
Yeah, I think that's all we can do at this point. I mean, I think our advice to our clients continues to be, as it has been for a while now, Control what you can control. You know, if you're, you know, most of my clients are service based clients. They're not importing a ton of stuff. They're not buying a lot of supplies. You know, they've got some, but not overly dependent on purchasing goods from overseas entities. And so, you know, if you're a services based company, you know, Labor still looks to be a little bit challenging. You know, we added more jobs last month than we thought we were going to. You know, we're still in that stage.
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