Expectations for M&A growth in financial services, insurance and real estate (FIRE) have dropped significantly over the last 12 months according to the latest reading of SourceMedia’s Mid-Market Pulse(MMP).
The MMP, published by Mergers & Acquisitions in partnership with RSM US LLP (formerly McGladrey LLP), is a forward-looking sentiment indicator that monitors M&A professionals’ expectations for merger and acquisition activity within the middle market over the coming 3- and 12-month periods.
The MMP is a diffusion index, and readings above 50 indicate that respondents expect an increase in activity. The FIRE sector scored 51.4 for the 3-month outlook, a significant drop from the November 2014 reading of 79.3. FIRE charted a similar decline between the current 12-month score of 57.8 and the previous year’s reading of 87.2.
Mergers & Acquisitions Editor in Chief Mary Kathleen Flynn says in late 2014 optimism was high following the mid-term elections. “The sector’s current score reflects a wide range of concerns, including rising interest rates; economic slowdowns in the U.S., China and elsewhere; the threat of terrorism incidents throughout the world; and uncertainty about the outcome of this year’s election,” Flynn says.
Each month, the MMP index spotlights an individual industry and presents respondents’ expectations for deal activity within that specific sector.
For a complete analysis of the MMP’s most recent data, go to:www.themiddlemarket.com/mmp-FIREdec2015
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 3- 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. Dealmakers overall are concerned about interest rate hikes, domestic and global economies, and the presidential election.
One respondent said “uncertainty regarding overall macroeconomic factors, including global growth and higher interest rates, may subdue activity and/or pressure valuation levels and the availability of financing.”
The presidential election and economic uncertainty as a result of economic conditions also are causes for concern, according to one dealmaker. Another respondent said, “The election-year cycle will give pause to many major transactions.”
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. With more than 40,000 unique monthly visitors, the brand’s website at themiddlemarket.com is continuously updated, providing real-time information and analysis of news and trends in M&A. Its monthly magazine, which serves over 48,300 subscribers, 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. Mergers & Acquisitions’ online video series features interviews with high-profile dealmakers, including private equity partners, strategic buyers, investment bankers and other advisers.
About RSM US LLP
RSM US LLP is the leading U.S. provider of audit, tax and consulting services focused on the middle market, with more than 8,000 people in 80 offices nationwide. It is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 37,000 people in over 110 countries. RSM uses its deep understanding of the needs and aspirations of clients to help them succeed.
For more information, please contact:
Mary Kathleen Flynn
Executive Director, Marketing