M&A Deal Volume Drops Significantly

Middle market mergers and acquisitions have tumbled to the levels last seen in 2009.

By Benjamin P. Michaelson

Some may say retro is never cool, others may disagree. I will add that, turning back the clocks to 2009 may not even truly qualify under a definition of “retro,” but the clocks have been turned back none the less. And not in a good way. According to data published by Mary Kathleen Flynn of the Mergers & Acquisition site www.themiddlemarket.com, middle market mergers and acquisitions have tumbled to the levels last seen in 2009.

“Tightening credit and the uncertainty of an election year shrank Q1 deal volume to levels last seen in the wake of the Lehman Bros. collapse”

That doesn’t bring back good memories, does it? M&A deal volume often contracts during periods of financial and political uncertainty. Thankfully, the uncertainty in the markets and the political spectrum in 2016 is not the same as what existed in 2009. Hopefully the return to a more robust transaction market, will likewise be different in 2016 as well, with a quick return to 2007 levels, where more than twice the number of deals were completed in the first quarter compared to 2016 (671 vs. 330).

Practically speaking, for business owners, the “take aways” here are to be patient (a lack of buyers isn’t necessarily a reflection on your business) and to plan your exit well (far better then you planned your start-up, in fact). Experienced investment bankers, attorneys, and financial advisers can help you in those regards. Good luck!

You can read the full article by Ms. Flynn, here: http://goo.gl/bGY7QU