May 13, 2024 – Los Angeles Business Journal – by Taylor Mills

Solganick Says M&A is Back

Los Angeles-based boutique investment banking firm Solganick & Co. focuses on established and growing companies within the software and IT services sectors. To date, the firm has advised on more than $20 billion in merger and acquisition transactions.

Aaron Solganick founded the firm in 2009 after serving as the senior vice president of investment banking at B. Riley Securities and vice president of investment banking at KPMG Corporate Finance. Some of his firm’s notable M&A transactions include Accenture’s acquisition of Nexira, Pandera Systems merger with 66 Degrees, Waypoint Consulting’s sale to WIPFLI, Visual BI’s sale to ATOS, as well as Flagship Solutions Group’s merger with Data Storage Corp, and others within the technology sector.

Have larger firms’ bets on AI influenced investments into your own firm’s tech?

We have already been investing and using AI technologies internally for research, analysis and automation purposes for the last several years. Large investment banks including JP Morgan, Goldman Sachs, Bank of America, and others, have all made major investments in AI. Although we do not compete directly with these firms, we view that AI investments are a necessity to remain competitive.

Any plans to hire technology professionals? What are your expectations for entry-level analysts in regard to AI or coding proficiency?

We outsource all of our technology support services and do not intend to directly hire any technology professionals in the immediate future.

The likelihood of an interest rate drop by the end of the year continues to decline. How haveyour plans adjusted in the past month to meet the new language coming from the Federal Reserve?

We continue to see a stronger M&A environment this year and continuing into next year, regardless of any interest rate movement by the Federal Reserve. Most strategic buyers are active and will continue to remain so. Interest rate movements will affect public company valuations and lending for deals. Private equity firms are extra sensitive to interest rates and thus should become more active in the M&A market as interest rates come down. We have not changed our forecast for 2024 and 2025 in terms of deal-volume upticks this year and next.

We’ve seen private capital investment banking practices raise substantial funds amid a difficult fundraising environment. How have you adjusted your alternative credit products to meet the market’s demand?

We continue to work with several new private equity funds that have successfully raised capital over the past 12 months.

Which industries do you see leading the eventual thawing of the M&A and IPO markets?

Software, technology services, health care and health care IT will lead M&A and IPO activity this year and next year, according to our research.

What does the next year hold for the company?

We are currently growing and hiring and expect to continue this path into 2025 as we continue to see and manage more M&A activity from our clients.