Global Mid Market M&A Activity Opportunistic, According to Study
05 May 2009
Paris – The lingering effects of the financial crisis continue to influence mid-market M&A deal volume among both private equity and corporate executives, but with no shortage of deal drivers to stimulate the activity over the next 12 months, deal makers are optimistic according to a Global M&A GmbH study performed by mergermarket and released today in Paris, France.
The volume of middle market deals (enterprise values of €30m to €300m) fell over 50% from Q1 2008 to Q1 2009 in Europe and 40% in Asia. Deal value also fell over 50% from €23.6bn in Q1 2008 to €10.2bn in Q1 2009 for North America while Latin America values fell from €3.7bn to
€2bn.
40% of survey respondents claimed they expected levels of mid market M&A activity to rise in their home country. The Cross-Border M&A Reporter notes that sentiment reveals a noticeably rosier forecast over the 23% of respondents that expected an increase in the November 2008 edition of this report.
”As value expectations adjust to the new economic reality, deals are closing again and I think activity will increase moderately over the next few quarters,” said Michael Gibbons, Global M&A Chairman.
“Distressed opportunities will continue to be a key driver in domestic and cross-border activity for the near future. The strategic buyer is again setting prices while the financial buyer is constrained by tight credit and is tending to its bruised portfolio.”
Other key findings include:
• 48% of respondents believe inbound M&A will increase in the next 12 months.
• Mid-market opportunities are rated highest in Western Europe, the US and Canada followed by Asia-Pacific and Central & Eastern Europe. In the May 2008 report, the Asia-Pacific region was rated highest and Canada and the US lowest.
• 46 % of respondents expect private equity to be the most active asset managers in the mid-market this year, closely followed by 40% who expect to see sovereign wealth funds as most active.
• The Financial Services sector is expected to see more restructuring-related mid-market M&A than any other sector according to 65% of respondents.
• 54 % of respondents expect asset managers like private equity and hedge funds to see the highest level of consolidation.
• The current drivers of distressed M&A activity – insolvency filings and urgent capital-raising initiatives – remain intact across a variety of sectors worldwide with the best opportunities in Financial Services, Consumer, Real Estate and Automotive.
The Cross-Border M&A Reporter is based on 50 telephone interviews with private equity professionals and corporate executives in Europe and the US conducted in April 2009.
The study was released today at the 6th Annual Global M&A Conference, “Change Creates Opportunity,” where over 300 M&A professionals from 40+ countries were welcomed in Paris by the Global M&A France host partner, Financière de Courcelles.
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Cross-Border M&A Reporter May 2009 
