August 5, 2016, NEW YORK – Corporate divestitures – which soared 11.4 points – helped move the mid-market out of contraction territory with a composite score of 52.3, according to the latest readings of SourceMedia’s Mergers & Acquisitions Conditions Index (MACI) .
Meanwhile, the technology, media and telecom (TMT) sector dipped below 50 to 48.4 for the short term, according to SourceMedia’s Mid-Market Pulse (MMP).
“The 3-month score for TMT was the lowest of the six high-growth industries measured by the MMP,” said Mary Kathleen Flynn, Editor-in-Chief of SourceMedia’s Mergers & Acquisitions publication. “The short-term outlook of the MMP was mired by uncertainty about politics in the U.S. and beyond.”
The MACI also showed elements of pessimism as the component for signed letters of intent remained in contraction, suggesting there are still obstacles to closing deals.
The MACI and MMP are diffusion indices. Readings above 50 indicate an expansion in M&A activity and readings below 50 indicate a contraction. The further from 50 a reading is, the stronger the indicated change. Monthly readings are presented as a time series that can be used to monitor the prevailing rate and direction of change in M&A activity and eventually to benchmark whether an institution is operating in line with overall industry trends.
SourceMedia Research in collaboration with the editors of Mergers & Acquisitions created the MACI and MMP as barometers to gauge mid-market mergers and acquisitions activity. They are powered by surveys of Mergers & Acquisitions’ audience of unique and qualified professionals in private equity, corporations, investment banking, law firms and other M&A advisory areas. For a complete analysis of the most recent data, visit: http://www.themiddlemarket.com/news/data/index-of-m-261075-1.html.
The MACI is a composite of multiple business metrics within its sector, measured through monthly surveys of approximately 250 executives in relevant markets. It is constructed to reveal and track patterns that enable professionals to better understand and anticipate peaks and troughs in their core activities. The MACI comprises a number of select sub-indicators that summarize various M&A activities, including deals announced and completed, letters of intent, acquisitions and divestitures.
The MMP 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.
- Between May and June, divestitures soared 11.4 points to 53.7. However, that is still far from the component’s high of 88.3 in March.
- An increase in Leads suggests that the cause of the current slump in mid-market M&A is not a deal sourcing problem, but rather a difficulty bringing transactions to closing.
- Completed deals ticked upwards slightly to 50.6, crawling into expansion territory.
- While TMT fell into contraction this month, the 12-month forecast has it solidly in expansion territory with a score of 66.3.
SourceMedia, an Observer Capital company, is a business-to-business Digital Marketing Services, Subscription Information, and Event company serving senior-level professionals in the financial, technology and healthcare sectors. Brands include American Banker, PaymentsSource, The Bond Buyer, Financial Planning, Accounting Today, Mergers & Acquisitions, National Mortgage News, Employee Benefit News and Health Data Management.
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 50,000 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 20,000 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.
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Mary Kathleen Flynn