With recently announced tariffs in North America, how are you thinking about tariffs? Is it all about sharing the risk with the seller via earn-out? Thanks!
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There is no satisfactory mechanism - seller notes, elevated discount rates or anything else - that is sufficient to mitigate the risk of the impact from U.S. tariffs. They will materially disrupt your revenue, supply chains and operating costs, and also your customers' revenue, supply chains and operating costs. Historical buyers of your products may well not be future buyers. This is the time to avoid deal-making.
You are a civilian in a warspace where the warriors are nation states: Canada and the U.S.A. Every participant in the M&A dealspace in this macro environment runs the terminal risk of becoming collateral damage.
Today (March 11, 2025), President Trump unleashed harsh rhetoric against Canada, threatening to ruin Canada economically and reiterating his intention for Canada to become the 51st state. On "X", Trump said he will make Canada pay "a financial price so big that it will be read about in History Books for many years to come."
Hunker down! Do not engage in this volatile and risky market! Be patient and gather market intelligence for the future when opportunities have a more attractive risk/reward profile!