Middle Market M&A – Tuning out the Noise
By Jeff Milkie, Managing Director, Investment Banking and Corporate Finance
Since mid-2010, middle-market M&A has strengthened as reflected in increased deal activity and purchase price multiples. The first half of 2011, while significantly more positive than during the recession, has leveled off, coinciding with volatility in the macro-economy and the stock market. Given all the recent “noise” in the market—from the debt ceiling debate to Europe’s debt concerns—it is critical to decipher recent data and identify trends to determine where the middle-market M&A environment is headed.
Positive Market Trends and Conditions
One of the overwhelming drivers of middle-market M&A remains increased buyer activity. The number of completed M&A transactions valued between $10 million and $250 million has increased significantly from recession levels. Activity has leveled off in the first half of 2011; however, this is largely caused by the reduction in quality companies coming to market and the macro-economic uncertainty that has slowed deal execution, rather than disinterest from the buyer universe.
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