In this episode of Accounting for the Future, host Anne-Marie Henson is joined by Sunil Sharma, National Leader of Transaction Services and Private Equity at BDO Canada , to unpack what's fueling the rise in companies going private. They discuss how current market conditions, including interest rates, geopolitical uncertainty, and undervalued assets, are influencing M&A activity in 2025. The conversation also covers why private equity is eyeing public markets, what makes a company an attractive target, and the ongoing valuation gap between buyers and sellers.

What you'll hear in this episode:

[1:38] Market comparisons between 2022 and 2025, and what they mean for stock prices.

[3:52] Analysis of why the Canadian stock market was better equipped to withstand volatility in comparison to the U.S. market.

[5:10] Insights into the impact of interest rates on public market activity.

[7:04] How Trump's election and policy announcements are affecting exit strategies, initial public offerings (IPO) plans, and the broader Canadian economy.

[9:16] A look at how private equity is approaching today's market, including the valuation gap between buyers and sellers.

[11:41] Further analysis of the persistent valuation gap in the private market, influenced by pandemic-era expectations, tariff-related slowdowns, and more cautious decision-making by investors.

[14:06] The difference between a private equity firm taking a company private vs. an industry player acquiring a public company.

[16:37] What makes a public company attractive to a private equity fund.

[19:12] Key considerations and steps to understand before completing a go-private transaction

[23:22] A real-world example of a company that went public and later returned to private ownership.

[24:03] Sunil's market predictions for the next 12 months.

Mentioned:

Anne-Marie Henson

Sunil Sharma

BDO Canada

Quotes:

"If you're thinking about potentially going private or partnering with a private equity fund, you should know that the expectations are different from those in the public market."

"Nearly 50% of private equity deals valued at US$5 billion or more in North America were public-to-private deals."

"Making sure there's excitement and interest from an investor base is crucial when a company is considering going public. In contrast, for private equity, having an aligned business strategy is more important."

"As a result of some of the inefficiencies and challenges we're seeing in the private markets, there continues to be a record amount of dry powder out there. Private equity funds are increasingly looking to the public markets for undervalued assets, see where they can make an impact, and then look to take them private."