What are your expectations for M&A in the year ahead?
I think that we generally have a positive outlook for dealmaking, especially for the second half of 2023. We have been talking about a recession for 15 months now, which is longer than the recession itself would even last. In Q3 and Q4 of 2022 we saw signs of recession, but, in the consumer space, we largely saw an inventory glut. Supply chains were constrained in 2021, retailers then got overstocked, the FED raised rates, and everyone hit the brakes on consumption. We are still seeing pretty good consumer demand at the retail level, but it is taking time to work through the inventory glut across all channels.
What we expect and what I have seen is everybody trying to manage inventory as tightly as possible, but, once demand gets caught up, the situation will normalize. We are expecting to see a whiplash of inventory glut to inventory shortage in the second half of 2023. Manufacturers will again be scrambling to produce goods in the second half.