A message from TJ Deal: June 2023

In a new recurring segment of The Charles Aris Podcast, Managing Director TJ Deal shares the latest trends in corporate development, M&A and executive search.

Read the full transcript:

Hey, everyone. This is TJ Deal, and I’m a managing director at Charles Aris. As many of you know, we are an executive search firm that specializes in corporate development and strategy recruiting, and really the lens by which our firm is most known is we run the industry’s largest such practice of doing so.

My role here is I lead our corporate development practice, which is a practice I started back when, and over the years, it has grown from myself to now about a team of 15 that focuses exclusively on corporate development roles, largely for private equity portfolio companies, about 90% of what we do, and we’re doing around 70 such searches a year. So, we’re coming up to the midway point of this year. It’s been an interesting 2023, to say the least.

After a record year in 2022 in our practice, Q1 continued that same trend, and we were pleasantly surprised. We’ve been bracing for the slowdown for a while now in this practice, and we had a really good record Q1. In Q2, we definitely saw a bit of a dip, but even with that, the first six months of this year we’re about even with where we were last year. Last year was a record year, so we’ve been cautiously optimistic with the resiliency of M&A hires, even in this interesting market. For those of you who follow our newsletter, our offer report will be coming out in a few weeks, covering the first six months of searches we did and offers that we saw in this practice. Stay tuned for that coming up in a few weeks.

Four takeaways from the first six months of this year:

First, the surprise of the year in a positive way: Tech M&A has stayed very strong. We expected a slowdown in tech given all the news that we’re seeing, the struggles that the public tech companies are having, but we’ve been pleasantly surprised with the resiliency of tech M&A hiring, both in IT services and also software, that stayed really strong.

On the other hand, the surprise of the year in a not-so-positive way is healthcare. It has definitely been down over the last few months. Generally speaking, at least one or two of those industries—payer, provider, life sciences, healthcare technology—will be spiking heavily at any given time, but they have all been slower in the last few months. However, we are now seeing things specifically in the month of June pointing to that changing a bit as more work in the healthcare space is starting to come in. It has been a significant piece for sure.

The not-so-surprising part of the year is that services continue to be consistent. Head of M&A searches for private equity-backed businesses, field services, as well as professional services have remained strong and consistent throughout 2023.

Lastly, an industry to watch in the second half of the year is manufacturing, specifically in two sub-verticals, one being aerospace and defense, we’re seeing a lot of energy in that sub-industry right now, and the other sub-vertical is automation. Big, old, heavy manufacturing: We’re seeing less and less of it, but there’s a big push in automation tech-driven manufacturing corporate development searches.

That’s all I’ve got. Thank you for the time, and we’ll see everyone next quarter.