Global Mid Market M&A Activity Optimistic, According to Study

08 May 2008

Miami, Dusseldorf 8 May 2008 – Middle market M&A deal volume among both private equity and corporate executives is down from one year ago as the global credit crisis continues to ripple from one country to another, but deal makers are guardedly optimistic for the rest of 2008 according to a Global M&A GmbH study performed by mergermarket and released today in Miami, Florida.

The volume of middle market deals (enterprise values of $30m to $300m) fell 22% from Q1 2007 to Q1 2008 in North America and 20% in Europe. Deal value also fell from $35,304m in Q1 2007 to $27,817m in Q1 2008 for North America and in Europe Q1 2007 saw $37,579m, while Q1 2008 saw $32,077m.

34 percent 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 has remained consistent since November 2007 when 32% of respondents expected an increase.

“Credit markets have tightened in the last few months but deals are getting done, albeit with less leverage,” said Michael Gibbons, Global M&A Chairman.

“Sale multiples have softened with the banking sectors caution, however many sectors have remained at relatively high levels on a historic basis. This slowdown does not show the characteristics of the last downturn and hope seems to be building that the US slump will be relatively minor.”


Other key findings include:

  • 46 percent of respondents believe outbound M&A will increase in the next 12 months.
  • The Energy and Utilities sector is expected to contain the most opportunities for 2008 followed by Industrial Manufacturing and Technology.
  • Emerging market opportunities are viewed strongest in India, followed by China, Eastern Europe, Brazil and Russia.
  • Less than a quarter of those polled found it difficult to secure financing for mid market cross-border M&A deals in the past six months.
  • Regional mid market M&A opportunities for 2008 are rated highest in Europe and lowest in Asia with Latin America in second ahead of the US/Canada.
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 2008. It is available to download below.

The study was released today at the 5th Annual Global M&A Conference, “A World of Middle Market Opportunities,” where over 300 M&A professionals from 45+ countries were welcomed in Miami by the Global M&A United States host partner, Brown Gibbons Lang & Company.

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