Global Mid Market M&A Activity to Remain Strong, According to Study
14 November 2007
Kyoto, Dusseldorf– Cross-border middle market M&A deals among both private equity and corporate executives remain strong, despite the recent global credit crisis, according to a Global M&A study performed by mergermarket and released today in Kyoto, Japan.
The middle market (deals with enterprise values of $30m to $300m) typically accounts for 300 to 350 deals per quarter in the US and Europe respectively. The Cross-Border M&A Reporter notes that in the third quarter of 2007, Europe in particular remained strong with 358 deals worth almost $36bn, down only slightly on Q2. North America was comparable at 305 deals worth $31.5bn.
An impressive 88 percent of study interview respondents said they expect mid market M&A activity to remain the same over the next 12 months in their native countries.
Japan continues to be stronger in outbound investment activity with 78% of respondents believing that Japanese mid market acquirers will be very active overseas during the next six months.
“The global middle market remains vibrant and very attractive for both strategic and private equity concerns," said Michael Gibbons, Global M&A chairman and senior managing director and principal of Global M&A United States partner BGL.
"Despite rumblings of credit tightening in the US markets, credit is still available at or near historically high levels. With the extreme weakness in the dollar, in-bound investment in the US has become the bargain of the decade."
“The overseas acquisition needs of business corporations associated with the globalization of Japanese corporates is more likely to increase than decrease,” commented Masaaki Yoshida, chairman of RECOF Corporation, the Japan member of Global M&A.
Other key findings include:
• Private equity is expected by 62 percent of respondents to be “active” in cross-border M&A in the next six months.
• Key verticals for M&A over the next six months include: Real Estate, Energy and Mining, and the IT/Internet-based sectors.
• Overseas buyers from Asia will have a greater influence on the North American and European mid market space. The influx of Asian buyers from Japan, China and India will provide private equity funds with significant portfolio exit opportunities.
• Regarding the overseas perspective on Japan, on the one hand Japanese corporations are recognized as potential buyers, but as an investment destination, it is perceived to be a difficult place to enter due to the tendency of the corporations not to have a Western-style of decision-making.
The Cross-Border M&A Reporter is based on 50 telephone interviews with private equity professionals and corporate executives in Europe and the US conducted in October 2007.
The study was released today at the annual Global M&A partner conference, where nearly 100 M&A professionals from 30+ countries were welcomed in Kyoto by the host partner, RECOF Corporation.
About Global M&A
Global M&A is the world’s leading partnership of independent mid-market financial advisory firms focusing on cross-border transactions with values between $30 and $300 million. The Global M&A partnership consists of 36 partners in financial centres spanning the globe. Members have completed more than 1000 transactions with an aggregate deal value exceeding $25 billion since 2000. For more information, please visit www.globalma.com.
About mergermarket
mergermarket is part of The Mergermarket Group, which has over 400 employees worldwide and regional head offices in New York, London and Hong Kong. mergermarket is an independent Mergers and Acquisitions (M&A) intelligence service, with the largest network of dedicated M&A journalists on the ground in 53 locations across the Americas, Asia-Pacific and Europe, the Middle- East and Africa. This team focuses on gathering actionable proprietary intelligence, creating the only origination database of live targets and bidders. mergermarket is also an unrivalled source of deal history. Public and private deals across a range of sectors can be searched using an exhaustive database. This proprietary intelligence and historical deals database is available to over 70,000 individual subscribers from more than 1,000 of the world's principal advisory firms, investment banks, law firms, private equity firms and corporates. Visit us at: www.mergermarket.com
Media contacts:
Global M&A
Wendy Neal
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Global M&A Cross Border Reporter - November 2007 
