November 8, 2016

M&A Outlook: More of the Same in 2017

According to Dykema’s “12th Annual M&A Outlook Survey,” most dealmakers think M&A activity will tread water during the upcoming year. Survey respondents believe that the global M&A market is leveling off in 2016, & nearly half said they expect the market would see no significant change in the coming year.

Here are some other highlights:

– Just 28% of respondents identified their outlook on the U.S. economy as positive, down from 48% in 2015.  But, as with the general M&A outlook, most respondents moved to a neutral outlook – up to 54% compared with 37% last year.

– 49% of respondents said availability of capital was most responsible for fueling current M&A activity, essentially the same percentage as in 2015. 25% credited favorable interest rates, a 7 percentage point increase from 2015, despite the Fed’s December 2015 rate increase.

– Respondents said U.S. financial buyers had the most influence on U.S. deal valuation over the past 12 months – the first time strategic buyers weren’t seen as the most influential since the 2008 survey.

– 68% of respondents expect an increase in M&A activity from privately owned businesses, down from 72%t last year. The 4% difference mirrors the drop in the percentage of respondents predicting M&A growth this year.

– 70% of respondents said they expect an acquisition involving their company or one of their portfolio companies in the next 12 months, up from 67% in 2015. 48% percent expect a sale, compared with 42% last year.

– Aging business owners seeking to sell were again seen as the top driver for growth in M&A activity from privately owned businesses.