October 24, 2018

M&A Outlook: Dealmakers Forecast a Sunny 2019

According to Dykema’s “14th Annual M&A Outlook Survey,” dealmakers are more optimistic about the prospects for M&A activity in 2019 than they’ve ever been in the history of the survey. The survey found that 65% of respondents expect the M&A market to strengthen over the next 12 months – that’s up from 39% last year.

Other highlights include:

– Automotive, energy & consumer products are the sectors where respondents expect to see the most deal activity. For the first time in 4 years, technology and healthcare dropped out of the top 3 sectors.

– 46% of respondents said a Democratic victory in the House would be somewhat or very positive, while 36% said it would be somewhat or very negative. On the Senate side, 48% saw a Democratic takeover as positive, while 36% said it would be somewhat or very negative. The “meh” vote was 19% for the House & 17% for the Senate.

– Only 33% of respondents chose availability of capital as the strongest M&A driver – that’s down from 55% in 2017. 31% cited general U.S. economic conditions, while favorable interest rates, financial markets and changes in U.S. tax laws, were each cited by 11% of respondents.

The survey also said that respondents were particularly bullish about private company M&A and deals below $100 million. That wasn’t the case for larger deals – only 26% expect growth for deals exceeding $100 million, while 41% expect deal volume to diminish.

John Jenkins