The 2020 Mid-Year Economic Update_long

M& A Survey: ‘It’s a Seller’s Market’


A record $2.7 trillion in first half 2007 worldwide mergers has led dealmakers to call the current M & A environment good or excellent (93%), according to a new survey by Association for Corporate Growth (ACG) and Thomson Financial.&nbsp ;

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However, there is growing concern among private equity professionals -who have played an increasingly important role in the merger boom -that the easy availability of debt financing which has helped fuel transactions will tighten, with 68% saying the debt markets will be worse in the next year.&nbsp ;
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The ACG/Thomson DealMakers Survey polled 1,011 investment bankers, private equity professionals, corporate development officers, as well as lawyers, accountants and other service providers involved in the deal ...

A record $2.7 trillion in first half 2007 worldwide mergers has led dealmakers to call the current M & A environment good or excellent (93%), according to a new survey by Association for Corporate Growth (ACG) and Thomson Financial.&nbsp ;

&nbsp ;
However, there is growing concern among private equity professionals -who have played an increasingly important role in the merger boom -that the easy availability of debt financing which has helped fuel transactions will tighten, with 68% saying the debt markets will be worse in the next year.&nbsp ;
&nbsp ;
The ACG/Thomson DealMakers Survey polled 1,011 investment bankers, private equity professionals, corporate development officers, as well as lawyers, accountants and other service providers involved in the deal economy in June 2007.
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With increasingly active corporate acquirers with global ambitions, financial acquirers raising large new funds and quickly making substantial investments -and dealmakers of all types doing more cross-border deals -I am confident that we will shatter all M & A records this year,” said Daniel A. Varroney, president and CEO of the Association for Corporate Growth.
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“It’s a seller’s market right now, and private equity firms’portfolio companies are doing well, increasing revenues and employment, and fueling economic growth. Private equity is making a substantial contribution to our continued economic expansion, and significantly outpacing the returns of the Standard & Poor’s 500 over the last five years.&nbsp ; The big question right now is will legislation or tighter debt markets end this extraordinary boom.
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About three-fourths of respondents said it is best to be on the seller side of a transaction today.
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Half of dealmakers polled expect to be involved in a cross-border deal during the second half of 2007, and 39% say cross-border deals are becoming more important to their firms.&nbsp ; Geographically, they anticipate these deals will be with: Western Europe (49%), Canada (40%) and China (34%). In first half 2007, European deals increased 77% to $1.04 trillion, even more than the 52% increase to $1.1 trillion in the United States.
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Total mergers in the first half of this year are 67% higher than last year’s first half total, and surpassed the previous first-half record of $1.93 trillion set in 2000, according to Thomson Financial.&nbsp ; Private equity-backed buyouts accounted for 36% of total U.S. M& A volume during the first half of 2007, compared to 24% during the first six months of 2006.

Manufacturing and distribution was listed by 15% of respondents as one of the hottest sectors in M & A. Also included was technology and healthcare/life sciences.

Private equity professionals reported the greatest opportunities for liquidity events for their portfolio companies in the next six months are: Sale to strategic buyer (50%), sale to financial buyer (32%), merger (8%) and IPO (6%).
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The Association for Corporate Growth is a global association for professionals involved in corporate growth, corporate development, and mergers and acquisitions. Thomson Financial is a provider of information and technology solutions to the worldwide financial community.
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Want to learn more about M & A in distribution markets? Check out MDM’s Special Report on Distribution M & A in 2007, or&nbsp ; the CD package of MDM’s recent audio conference, “Distribution M & A 2007 Update: More Buyers, New Drivers in U.S., Overseas.”

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