In the Business Services Industry, 2019 continued to be a good year for mergers and acquisitions in environmental services for reasons that may at first appear paradoxical but actually reflect investors’ confidence that the long-term impact of today’s lighter regulations may be creating potential bargains now and lead to pent-up demand later. In 2019, the White House continued to slash environmental regulations that may be slowing demand for environmental mitigation in industries including oil & gas and farming. As regulations have been cut, the administration has touted massive savings for the industries – savings that presumably would have flowed into the environmental services created to help companies comply with regulations. The scope of environmental regulations eliminated or proposed for elimination is substantial. The Sabin Center for Climate Change Law at Columbia Law School maintains a database of the administration’s proposed or enacted measures to reduce environmental regulations. By the end of 2H19, that list included 135 actions with titles such as, “Executive Order on Reducing Regulation and Controlling Regulatory Costs,” and “EPA Publishes Final Rule to Repeal and Replace Clean Power Plan.” These are regulations that once required the services of companies that specialize in reducing or capturing emissions, coal ash retention, surface and ground water filtration or protection, to name a few. But savvy private equity investors are seeing that if one administration can propose or enact more than 100 cuts to environmental regulations, a new administration can just as quickly replace them. There’s no guarantee the November elections will replace today’s administration, but in 2024, it’s a sure thing, no president can serve more than two terms. A 2020 flip to stricter regulations and a scramble to comply could unleash pent-up demand and quickly turn into a win for investors who made a move when the industry was out of favor, but if that doesn’t happen, a five-year return isn’t a bad bet either…