The holiday season should be a hit for M&A activity in the consumer goods and retail 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 outlook for merger and acquisition activity within the middle market.
“Dealmakers polled in October predicted that the rate of expansion of M&A in the consumer goods and retail sector would outpace activity in the overall market in the short term,” said Mary Kathleen Flynn, Editor-in-Chief of Mergers & Acquisitions.
The sector’s three-month composite score registered 70, compared to the overall index’s reading of 63. “The findings mirror optimism by others, including The National Retail Federation, about the sector for the 2014 holiday season,” Flynn said.
The intermediate term did not receive the same zeal from dealmakers. Instead, the overall MMP composite score of 62.6 outpaced the sector score of 58.7 for the 12-month forecast.
“Among the six high-growth industries measured by the MMP, consumer goods and retail came in fifth place – behind health care; technology, media and telecommunications (TMT); manufacturing; and finance, insurance and real estate (FIRE),” Flynn said. The only sector that consumer goods and retail beat out was energy.
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 consumer goods and retail sector.
For a complete analysis of the MMP’s most recent data, go to:
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. Some said that while the three-month forecast was indeed positive, anything beyond that would be impacted by interest rates.
“I think that in a year time frame growth will be slowing and interest rates higher,” one dealmaker said. Another commented, “I expect the general economy to cool off as interest rates rise.”
Dealmakers also pointed to “baby boomers' readiness to sell the companies they founded” as reason for optimism. “I think that the continual trend of baby boomers retiring will drive M&A activity,” a respondent remarked.
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 athttp://www.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 at McGladrey News, follow us on Twitter @McGladreyPEand/or connect with us on LinkedIn.
For more information, please contact:
Mary Kathleen Flynn
Executive Director of Marketing