Corporate M&A prospects looking up
According to EY, the vast majority of US execs believe the market for mergers and acquisitions will pick up. The prospects for that are solidified by EY’s discovery that almost half of US companies surveyed have multiple deals already in the works.
The US is particularly well positioned for a surge in M&A, given its superior recovery from the Great Recession compared to others.
Among the key findings:
*81% of surveyed execs expect M&A to pick up over the next 12 months, up from 52% YOY
*41% of US companies have at least five deals cooking
*Middle-market acquisitions are expected to double
*55% of execs are expecting debt to be the main source of deal financing
*33% of execs are planning to pursue a deal
“After a slow but steady macroeconomic rebound that saw the US out in front, every indication says the US will be ahead of the curve on dealmaking as well,” said Rich Jeanneret, Americas Vice Chair, Transaction Advisory Services, EY. “More than we’ve seen in recent years, corporates are in the financial and strategic position to do deals. And while they are treating M&A with extreme discipline, we’re seeing a renewed willingness to take chances in order to grow and innovate.”
EY says the US is benefitting from several years of consistent growth. “US companies are ahead of their global peers when it comes to M&A,” concluded Jeanneret. “They are already moving from the consideration phase to the deep evaluation phase, which will likely lead to execution as the recovery heats up.”