Current drivers of M&A activity

For top quality assets sellers can often expect higher multiples than those achieved in the boom of 2007

As specialists in selling companies and making acquisitions, we were asked to contribute to a recent feature in Acquisitions Daily (registration required), the online news and deal intelligence community for M&A professionals.

The article considers the factors driving M&A activity in what is widely regarded as a ‘soft’ market for mid-market companies worldwide. Mid-market M&A activity fell to US$335.1bn during the first half of 2012, 11.6% down on the same period last year (US$379bn).

But this big picture is misleading, suggests Partner at Livingstone London Jeremy Furniss, who is quoted as saying, “The defining feature of the current market is the absence of quality opportunities – they are in short supply.” The article explains that the knock on effect of this is that if you have a high quality business, you can be pretty confident of creating a competitive situation and achieving significant multiples. “For top quality assets sellers can often expect higher multiples than those achieved in the boom of 2007,” Furniss says.

“When you have something people want, scarcity means that everyone feels they need to go for it and are willing to pay for it,” he adds.

 


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