Falling oil prices have dealt a direct blow to dealmakers’ near-term outlook for the energy sector, according to the latest reading of SourceMedia’s Mid-Market Pulse (MMP). The MMP, published by Mergers & Acquisitions in partnership with McGladrey LLP, is a forward-looking sentiment indicator that monitors near- and intermediate-term outlooks for merger and acquisition activity within the middle market.
The energy sector scored 49.4 for the 3-month outlook, far below the overall M&A industry score of 77.5. The last time the MMP focused on energy in mid-2014, the near-term score was 68.5.
“The decline in oil prices is likely taking a toll on short-term assessments of the sector,” said Mary Kathleen Flynn, editor-in-chief of Mergers & Acquisitions. “Reflecting the more bullish longer-time view, however, new energy funds have already been raised in 2015 by private equity firms.”
Energy registered 62.4 for the long term, an indicator of healthy growth despite lagging the overall M&A industry’s score of 72.7 for the same timeframe. In mid-2014, energy’s 12-month reading was 67.7.
Each month, the MMP index spotlights an individual industry and presents respondents’ expectations for deal activity within that specific sector. This month’s index focuses on the energy sector.
Among the six fast-growth industries measured by the MMP, healthcare ranked highest for the three-month outlook. For the 12-month forecast, financial services, insurance, and real estate (FIRE) took the lead.
For a complete analysis of the MMP’s most recent data, go to:http://www.themiddlemarket.com/mmp-energy-0215
Inside the MMP
The Mergers & Acquisitions Mid-Market Pulse (MMP) is a monthly barometer of sentiment in the mergers and acquisitions business derived from monthly surveys of approximately 250 executives in private equity firms, investment banks, lenders, and advisory firms in accounting, law, and consulting.
Based on a regular set of recurring questions about expectations and trends across a range of key issues in M&A, the MMP is a leading indicator for potential changes in momentum in M&A activity. Various indicators that make up the MMP include projected deal volumes and pricing, staffing resource utilization levels, and the expected impacts of economic conditions, taxes and regulatory policy on future M&A activity.
Survey responses describe expectations and outlooks for three- and 12-month forward periods to arrive at indicator scores. Respondents also are asked to elaborate on their responses and provide opinions about other conditions that affect their M&A outlook.
What Respondents are Saying
Survey respondents are encouraged to add verbatim comments to their answers. Most comments focused on declining oil prices and regulatory concerns.
“[The] large decrease in crude oil price has brought a lot of unknown into the marketplace, dampening risk-seeking choices,” one respondent said.
Another commented: “We continue to keep an eye on regulatory and tax administrative and legislative areas.”
SourceMedia, an Observer Capital company, is a diversified business-to-business digital media company serving senior professionals in the financial, technology, and healthcare sectors. Brands include American Banker, The Bond Buyer, Mergers & Acquisitions, Financial Planning, On Wall Street, Accounting Today, Health Data Management, and Employee Benefit News. Information about SourceMedia is available atwww.sourcemedia.com.
About SourceMedia Research
SourceMedia Research, a unit of SourceMedia, provides research solutions for marketers, agencies and others targeting business sectors such as banking, payments, mortgage, accounting, insurance, employee benefits and investment advisor / wealth management. SourceMedia Research specializes in reaching senior and C-level decision makers through access to its large proprietary opt-in databases and panels.
About Mergers & Acquisitions
Mergers & Acquisitions covers all aspects of middle-market dealmaking, including identifying acquisition targets, negotiating transactions, performing due diligence, and closing deals. Serving nearly 18,600 print subscribers, our monthly magazine is published in partnership with the Association for Corporate Growth (ACG), a global organization comprised of thousands of private equity firms, corporate officials and intermediaries. With more than 25,000 unique monthly visitors, themiddlemarket.com is continuously updated, providing real-time information and analysis of news and trends in M&A. Our online video series features interviews with high-profile dealmakers, including private equity partners, strategic buyers, investment bankers and other advisers.
McGladrey LLP is the leading U.S. provider of assurance, tax and consulting services focused on the middle market, with more than 7,000 people in 75 cities nationwide. McGladrey is a licensed CPA firm and serves clients around the world through RSM International, a global network of independent assurance, tax and consulting firms. McGladrey uses its deep understanding of the needs and aspirations of clients to help them succeed. McGladrey serves private equity firms and their portfolio companies with integrated transaction advisory, tax, assurance and consulting services. Clients benefit from a single-point-of-coordination service model and teams that operate as strategic partners throughout the private equity life cycle. For more information like us on Facebook atMcGladrey News, follow us on Twitter @McGladreyPE and/or connect with us on LinkedIn.
For more information, please contact:
Mary Kathleen Flynn
Executive Marketing Director