Q&A with Acquisition and Operational Improvement Expert Michael Watt

Portage Point Partners recently welcomed Michael Watt as Managing Director in the Transaction Advisory Services Practice. Below, Michael shares some of his background and experience and explores his perspective on the current mergers and acquisitions (M&A) market.

TELL US ABOUT YOUR CAREER PRIOR TO PORTAGE POINT

I spent nearly 20 years helping private equity (PE) firms create value through acquisitions, operational improvements and divestitures. I have worked on both buy-side and sell-side transactions with values ranging from $25 million up to $5 billion. My career has spanned multiple market sectors, with deep experience in consumer products, industrial distribution and professional services.

The common thread throughout my career has been supporting clients with complex operational dynamics, including multi-location operations, diverse product lines and intricate supply chains. I have also worked with companies that have decentralized management structures or lean management teams and are looking for a partner to support them as they run their business. All of these businesses require advisors who understand operational realities, not just financial statements.

What ATTRACTED YOU TO PORTAGE POINT

The opportunity to focus on impactful middle market transactions brought me to Portage Point. When middle market sponsors pursue targets that have never accessed outside capital before there is tremendous opportunity alongside distinct challenges. Financial reporting, due diligence and post-merger integration require experienced guidance to navigate successfully.

Middle market business leaders want to ensure they make deals that strategically add value but often require support to provide the transparency PE sponsors and lenders demand. This requires both technical expertise and execution focus – that is where the Portage Point team comes in. Portage Point was founded to bring blue chip, bulge bracket talent to middle market transactions, which other firms might overlook in pursuit of larger engagements.

WHAT PREVAILING TRENDS ARE YOU NOTICING WITHIN THE M&A LANDSCAPE

The persistent gap between buyer and seller valuations remains the primary source of friction in the market. PE sponsors need to monetize assets acquired three to seven years ago to raise their next funds and compensate talent, yet sellers require certain returns and buyers are not aligning on those expectations. This valuation mismatch has not resolved as quickly as the market anticipated.

Many firms are opting for continuation vehicles (CVs) to extend fund lives. The stigma around CVs has diminished – five years ago, pursuing this route might have been viewed as a distress signal or tool of last resort. Today, CVs provide additional liquidity and flexibility as a portfolio management tool. However, this approach represents a short-term solution. Assets cannot be held indefinitely. Ultimately, sponsors will need to get more creative in how they structure exits and market to potential buyers to achieve desired returns, potentially increasing the use of earn-outs, seller rollover and seller financing.

WHERE ARE YOU SEEING THE MOST DEAL ACTIVITY AT PRESENT

Professional services continues to be an exceptionally active space. These businesses deliver solid cash flow, which becomes especially valuable during periods of market uncertainty. Consolidation is accelerating across accounting firms, consulting firms and specialized service providers. There have already been twice as many PE transactions in professional services throughout 2025 than in full year 2024.

However, professional services M&A come with distinct challenges that require specialized expertise. Proper due diligence is crucial. Sponsors must understand factors like client and partner risk, incentive dynamics, cultural alignment and accounting practices. Acquirers must ensure that partners are bought into the model the PE sponsor brings to the table. Without solid groundwork, firms risk an exodus of professionals who feel their growth will be limited, or face reporting errors stemming from lack of standardized revenue recognition practices. These are people businesses at their core, and different people can have varied methods of working or recordkeeping. Portage Point is adept at helping clients track and navigate these complexities.

WHAT ARE YOU MOST EXCITED TO BRING TO CLIENTS

I am most excited about the caliber and pedigree of the Portage Point team. We are a firm comprised of bulge bracket talent, with real-world experience that is laser-focused on the middle market. This makes Portage Point unique and lets us bring a high degree of focus to our client engagements.

Portage Point was purpose-built from the ground up to operate as a unified platform – integration is fundamental to the operational structure. Each team member has distinct areas of expertise but operates as a cohesive team with full visibility into engagement dynamics and investment cycle, enabling our teams to deliver the complete spectrum of collective knowledge to clients, rather than operating in functional silos that characterize traditional advisory models.

Michael Watt, Managing Director Michael Watt has over 20 years of experience advising private equity firms and corporate clients on value creation through acquisitions, operational improvements and divestitures. He leads multidisciplinary teams on complex transactions ranging from $25 million to more than $5 billion with a focus on financial and operational due diligence, contract analysis, cash flow and working capital optimization and post-merger integration and transformation. He has led due diligence engagements for large cap and middle market private equity firms as well as major domestic and international corporations across a range of sectors, including consumer products, distribution, industrial manufacturing and retail among others.