WCF Advisors Blog

Category: Market Updates
A quarterly, insightful look at middle-market merger and acquisition activity.

A Step Toward Normalcy?

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

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...

The Market Takes a Breath

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

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

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

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...

Rising Transaction Activity Aided by Favorable Lending Conditions

Mar 01, 2015
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Market Updates
In 2014, the volume and value of mergers and acquisitions of North American midmarket companies ($5 million to $500 million in value) advanced to their highest level in the last six years. There was a 17% increase in North American volume to 12,492 transactions in 2014, worth a combined $436 billion for the full year. Continuing a trend, deal value increased more than deal volume. Private equity and venture capitol were similarly strong in 2014, also hitting a six-year high. GF Data reported...

Market Activity Fueled by Demand, Favorable Valuations, and Lending

Dec 01, 2014
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Market Updates
Deal flow remained strong through the third quarter of 2014, fueled by strong transaction multiples and favorable leverage terms. Thomson Reuters reports a 22% increase in worldwide mid-market M&A deal volume for the first nine months of 2014 over the prior year. The Americas region leads the market with $228.1 billion of announced deal activity, representing a 20.5% share of the market. Deal value has grown more than volume, supporting other reports of rising transaction multiples,...