NEW YORK, NY (April 22, 2016) – Expectations for the consumer goods and retail sector soared above the overall M&A industry in the near term, riding high on bankruptcies and consolidation, according to the latest reading of SourceMedia’s Mid-Market Pulse (MMP). Registering 74.1, well ahead of the overall M&A score of 52.8, dealmakers in the consumer goods and retail sector expect to close more deals over the next three months.
The MMP, published by Mergers & Acquisitions in partnership with RSM US 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. While consumer goods and retail outpaced overall M&A in the near term, the 12-month forecast put the two in a dead heat with a reading of 53.6.
“The challenges retailers face, including striking a balance between e-commerce services and bricks-and-mortar stores, are driving consolidation in the sector,” says Mergers & Acquisitions Editor in Chief Mary Kathleen Flynn. “Some retail activity is being fueled by distressed companies.”
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, visitwww.themiddlemarket.com/MMP-Retail-0316.
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 have noticed recent momentum in the consumer goods and retail sector.
In addition to founder- and family-owned businesses looking for an exit, one respondent has observed “a high number of strategic buyers in the space that are seeking to buy customers, consolidate with competitors, and/or enter new verticals.”
Over the longer term, dealmakers are worried about the 2016 presidential election and consumer confidence. One dealmaker commented, “I think confidence in the overall economy is still shaky, and nobody wants to get into a deal where the debt service could be a problem during a downturn.”
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.
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.
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 Marketing Director