Mid-Market Index August – Market aims to make up for 2016 in...

Mid-Market Index August – Market aims to make up for 2016 in second half of the year

Optimism across the middle-market M&A remains strong as the market aims to show gains after a slow first half of 2016.

A disappointing first half of 2016 for the middle-market saw transaction closes lowered to levels last seen in the midst of the 2009 recession. A deepening concern over uncertainty in the next American Presidential election, the BREXIT, as well as a slowdown in China and of course global terrorist attacks, created a climate for slower market performance.

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Mid-Market M&A: Deal Environment for Sellers

Merger and Acquisitions’ monthly survey for the month of July gave a MACI rating of 51.8, not too far from 52.3 for June. Indicating that optimism across the middle-market M&A continues to stabilize as the market aims to establish its bearings after a slow first half of 2016.

After M&A Stalled in First Six Months of 2016, Dealmakers Pin Hopes on Second Half
After M&A Stalled in First Six Months of 2016, Dealmakers Pin Hopes on Second Half

The July survey saw weakening numbers for successful negotiations which fell to 45.8 from 50.6 in the previous month. Divestments also took a tumble, currently 48.0 from 53.7 in June. One sector not contributing to such low scores was the consumer goods markets which continue to remain active.

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Mid-Market M&A: Deal Environment for Sellers

Markets remain optimistic as LOI (Letters of Intent) are reportedly up from previous months. Everyone is currently looking to the second half of 2016 to make up for a slow start to the year.

While 2014 or 2015 figures may not be attainable for the remainder of 2016, the increase in key ratings, higher M&A staffing as well as increased business activities make the second half of 2016 more promising as more deals are to be made.