After securing a spot in the top five most-active industries for middle-market M&A in 2014, the technology, media and telecommunications (TMT) sector is expected to continue the momentum in 2015, 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.
TMT registered a three-month composite score of 83.2, beating out the overall M&A reading of 77.5. Similarly, TMT came out ahead in the 12-month view with a reading of 82.4 compared with the overall M&A score of 72.7. The sector continues to rise from the mid-2014 readings of 79.1 for the three-month outlook and 79.5 for the 12-month outlook.
Several technological advances are fueling M&A, including cloud computing, data analytics, mobile devices and e-commerce. “Many companies are still playing catch-up after years of under-investing in technology during the recession. They are finding that, when it comes to technology, it pays to buy rather than to build,” said Mary Kathleen Flynn, editor-in-chief of Mergers & Acquisitions.
TMT came in second, behind healthcare, in the three-month forecast of the six fast-growth industries the MMP measures. In the 12-month view, TMT came in second again, but this time behind the financial services, insurance and real estate (FIRE) sector.
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 TMT sector.
For a complete analysis of the MMP’s most recent data, go to:www.themiddlemarket.com/mmp-tmt-0115
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. Many aligned with the MMP’s scores. “The economic conditions which continue to improve are the primary driver for our forecast, and specifically for technology we see the economy continuing to drive further increases in transaction activity,” one transaction professional said.
Another commented: “TMT, like most other industries, is driven by consumer spending. As long as policies continue to be accommodative, then we should have good activity.”
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. 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 atMcGladrey News, follow us on Twitter @McGladreyPE and/or connect with us on LinkedIn.
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