WCF Advisors Blog

Category: Market Updates

Strategic Buyers Pay up for Opportunities

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Sep 21, 2017
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Market Updates
The M&A market is somewhat a tale of two markets, large and small. While the middle market ($50M to $500M in deal value) has remained relatively stable, mega deals ($500M in deal value and above) have dominated in terms of volume and value. The number and value of mega deals have increased year over year in 2017, while middle market deals have trended slightly behind and lower middle market deals have declined. Similar to what we reported last quarter, total deal volume in the United States...

M&A Market in Wait-and-See Mode

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Jun 14, 2017
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Market Updates
After a few years of robust merger and acquisition activity, policy uncertainty has the market poised for a temporary breather. There are some mixed signals from the first quarter (Q1) of 2017. For starters, overall M&A activity in the United States started relatively modestly in 2017 according to Pitchbook, at least in contrast to the past few years. However, transaction multiples edged up to a multi-year high. The increase in valuations is likely a result of the...

A Step Toward Normalcy?

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Mar 01, 2017
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Market Updates
If 2015 was a record year, perhaps 2016 was the year we began to see a return to normalcy in the M&A market as deal activity receded. The beginning of a retrenchment may be evidenced by emerging trends including a flight to quality, reemergence of platform value, and a greater reliance on equity capitol as a funding source for M&A. Private equity transaction volumes involving deals between $10 million and $250 million fell by 23.5% and 11.1% on a quarterover- quarter and year-over-year...

Strategic Buyer and Private Equity Demand Driving Middle-Market M&A Activity

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Dec 01, 2016
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Market Updates
Market data indicates that U.S. merger and acquisition deal activity decreased in September, going down 5.4% with 1 ,005 announcements compared to 1 ,062 in August. However, aggregate M&A spending increased. In September, 28.3% more was spent on deals compared to August. Over the past three months, the sectors that have seen the biggest declines in M&A deal volume, relative to the some three-month period one year ago, have been: Technology Services (439 vs. 575), Commercial Services (452...

Is the Balance of Power Shifting Away From Sellers?

Sep 01, 2016
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Market Updates
Middle-market M&A activity declined 31% year over year (YOY) in volume through August 31, according to S&P Capital IQ. In the first eight months of 2016, only 1,523 transactions were closed, compared with 2,194 over the same period in 2015. While expected, this decline represents a significant pullback from the historic M&A levels of 2015 and 2014. Although many still consider the present environment to be a sellers' market, this may signal the beginning of a change in the balance of power...

The Market Takes a Breath

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Jun 01, 2016
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Market Updates
Middle-market deal flow paused in Q1 2016 as buyers and lenders took harder looks at potential deals. While corporate balance sheets hold approximately $1.5 trillion in cash, according to Federal Reserve data, and private equity funds collectively hold dry powder of $534 billion, per Pitchbook, strategic and PE buyers have refocused on quality companies given rising valuations combined with uncertainty in the U.S. macro environment. GF Data's latest report indicates private equity transaction...

The Future Looks Bright

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Mar 01, 2016
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Market Updates
Consistent with last quarter, M&A deal volume in the United Stales decreased in the fourth quarter of 2015 compared to the third quarter, while deal value increased. According to FactSet Mergerstat, year over year, both deal volume and total deal value increased. The outlook is positive, and M&A advisors are expecting a 60% net increase in new deals in 20 16. Compared to a year ago, optimism has grown, with advisors anticipating: Greater deal flow Increased business exit opportunities...

Peak or No Peak

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Dec 01, 2015
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Market Updates
Consistent with last quarter, M&A deal volume in the United States decreased in the third quarter of 2015 compared to the second quarter of 2015 while deal value increased. According to FactSet Mergerstat, year over year, deal volume also decreased while total deal value increased , a clear result of higher purchase price multiples on larger deals. The sectors seeing the largest increase in value in the past three months over the same three months in the prior year include Consumer...

M&A Market Remains Strong Amid Economic and Market Volatility

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Sep 01, 2015
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Market Updates
The 2015 M&A market continues to operate at a healthy pace with continued strong demand by buyers who are willing to pay valuation premiums for quality companies. With global economic turmoil in the background and U.S. interest rates poised to increase in the near term, many believe valuation multiples have peaked in this sellers' market. The quarterly and year- to-date transaction data suggests valuations are leveling overall but that buyers remain willing to pay a significant premium for...

Peak Credit Conditions and Imbalanced Valuations Point Toward Normalization of M&A Markets

Jun 01, 2015
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Market Updates
Middle-market deal flow remained strong in Q1 2015, supported by healthy credit markets and significant capitol that needs to be put to work. Corporate balance sheets remain flush with cosh, registering approximately $1.4 trillion, according to Federal Reserve data. Combined with private equity dry powder of $535 billion, per Pitchbook, this represents a significant driver of rising valuations. GF Data's latest report indicates private equity transaction valuations for deals between $10 million...