Global Mid Market M&A Activity at Peak, According to Study
13 October 2006
Istanbul, 13 October 2006 - With company valuations static and investor confidence divided, mid-market M&A activity may have reached a peak according to a new survey of leading private equity investors and senior corporate executives across the US and Europe.
The Global M&A Cross Border M&A Reporter, commissioned from M&A intelligence provider mergermarket by Global M&A, the world’s most active partnership of mid-market independent corporate finance houses, found that companies and investors deliberating on the best time to sell a business might be well advised to act sooner rather than later.
Any slowdown in M&A will not be necessarily prolonged or profound due to record levels of private equity fund-raising that will drive the market for some time. There is also a sense that the cross border M&A market will move away from the congested and overvalued territories of Western Europe and the US and look towards the Central and Eastern European nations and neighboring economies such as Turkey.
Other key findings of the Cross Border M&A Reporter include:
- Mid market cross border activity has slipped back somewhat in the third quarter of 2006, compared to the previous five quarters.
- Fifty-nine percent of global respondents believe that M&A activity will continue to increase in the next six months, as opposed to 75% who backed an increase when asked the same question six months ago.
- Seventy percent still anticipate an increase in cross border mid market M&A activity in their country in the next six months. This is also down from 83% forecasting an increase six months ago.
- Over half of respondents claim to have not completed as many deals as expected, citing a slow pace, shortage of deal opportunities and complex hurdles to completing cross border deals.
- Private mid market and family businesses remain a major source of deal opportunities for acquirers and investors; however, private equity portfolios’ have significantly increased in importance as a source of M&A opportunities – rising to 39% compared to just 17% six months ago.
- Fifty percent of the respondents raise concerns that the debt market cannot sustain its current activity, but are divided as to when the availability of debt will decline significantly – either Q1 2007 or Q4 2007.
- A sector spotlight on the Food & Beverage industry finds M&A activity reasonably stable over the past two years with deals in this sector accounting for around €4bn per quarter.
- Turkey’s new found macro-economic stability has been a key driver in bringing foreign investment to Turkey, which has fuelled more M&A. The leading M&A sectors in Turkey over the past year are Financial Services, TMT, and Consumer.
The Cross Border M&A Reporter is published every six months and is based on 50 telephone interviews with mid market private equity professionals and corporate executives in the US and Europe in September/October 2006. The complete study can be found at www.globalma.com/page/news.
The report was released today at the Global M&A Partner Conference in Istanbul, hosted by Turkish partner firm, Total Finans.
Global M&A Cross Border M&A Reporter 
