Dealmakers are ready to rumble following an intense winter slumber, according to SourceMedia’s Mergers & Acquisitions Conditions Index (MACI). M&A pros polled last month were upbeat about 2015’s deal prospects.
“Early-stage deal flow flourished in February, lifting overall deal flow above the sluggish level reported in January,” said Mary Kathleen Flynn, Editor-in-Chief of SourceMedia’s Mergers & Acquisitions publication. Leads scored 69.7 compared to the dismal reading of 48 in January.
The MACI composite score also rose, with a February score of 52.9, up from the previous month’s 52. “The MACI results reflect the annual shift to new business after a post-holiday pause,” Flynn said.
Completed Deals dipped to 44.3 from January’s reading of 54.3, indicating a wind-down of transactions initiated in 2014.
The M&A Conditions Index (MACI) is a barometer to gauge mid-market mergers and acquisitions activity. The MACI is 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.The December reading was based on a survey of more than 250 dealmakers. For a complete analysis of the MACI’s most recent data, visit: http://www.themiddlemarket.com/news/financial_sponsors/leads-for-new-deals-soared-in-february-255091-1.html.
Inside the MACI
The MACI is a diffusion index. 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.
The index was created by SourceMedia Research in collaboration with the editors of Mergers & Acquisitions. In addition to the M&A Conditions Index, SourceMedia publishes indices for banking, mobile banking, accounting and other key sectors.
The M&A Conditions Index is a composite of multiple business metrics within its sector, measured through monthly surveys of 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 shown, letters of intent, acquisitions and divestitures.
What Respondents are Saying
Survey respondents are encouraged to add verbatim comments to their answers. Some pointed to the recent drop in oil prices as a factor in deals going forward.
“Deals in energy are still available but the prices are much lower,” a dealmaker said, noting that multiples are higher. “Buyers and investors believe that energy prices will reverse direction in the near future.”
Others remarked that debt is available and low interest rates are still around, making for a competitive deal landscape. “Valuations seem at historical highs due to cheap and plentiful debt,” one M&A pro commented.
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 at 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.
For more information, please contact:
Mary Kathleen Flynn
Executive Director, Marketing