Middle-market expected to drive M&A activity in 2014

The middle-market is expected to drive M&A activity through 2014 according to M&A news (www.themiddlemarket.com). In a poll of M&A professionals including strategic buyers, private equity investors, investment bankers / corporate finance professionals, accountants and other advisers, it was highlighted that middle-market M&A, which saw a flurry of deals in Q4 2013, will accelerate through 2014.

According to Thomson Reuters, the final quarter of 2013 was by far the strongest in terms of deal completions and it appears the majority of M&A professionals expect transaction numbers to continue to increase – almost three quarters of the respondents to M&A News’ study expect 2014 to be considerably more activity than the previous year.

It also appears that both strategic and financial buyers are enthusiastic about the year ahead with 41 percent of U.S. executives expecting their firms to pursue at least one acquisition in 2014, according to a recent poll conducted by Ernst Young.

Underlying factors are favorable for M&A activity with record low interest rates, high availability of credit, large sums of unspent cash available to corporate and financial buyers, alongside low organic growth prospects.

With increasing credibility surrounding financial forecasts due to a stabilising economy and enhanced middle market confidence, it is no surprise that activity is predicted to increase.

Benchmark International witnessed a significant increase in buyer activity in H2 2013 and levels of interest have continued to rise since.  With a record breaking final quarter in 2013, in terms of deal volume and multiples achieved, coupled with activity and buyer appetite on a seemingly continuing upward trend we predict that 2014 will reach, if not eclipse, pre-recession achievements.

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