This week’s M&A Weekly Digest includes stories about the expectation that 55% of the U.S.being healthcare-driven soon, things that shouldn’t affect business owners’ strategies, M&A activity remaining strong in Canada and the hot M&A sector of staffing.
This article in the August issue of Medical Dealer magazine indicates that 55 percent of the U.S. economy is going to be healthcare-driven in the near future. That large percentage combined with the healthcare industry reaching maturity will result in increased M&A activity because the quickest way for companies to grow is to acquire another business rather than start from scratch.
Because of his expertise inand , Generational Equity’s Terry Mackin was interviewed by Medical Dealer’s Matthew Skoufalos for the piece. Terry points out the role that emotions play in determining the success of a deal and highlights the importance of the team.
Since capital gains tax and interest rates affect M&A activity much more than the stock market, letting market swings affect your exit strategy is a big mistake.
“[V]ery rarely has the stock market predicted a recession…according to Fortune, ‘there have been 30 market declines of 15% or more since the Great Depression, and only two led to recessions‘ (emphasis added).”
“The M&A Advisor, a publication that focuses on M&A activity in the conducted a survey of leading dealmakers in the middle-market. Their conclusion mirrors ours: The S&P downgrade will have an impact on the overall financial industry in the U.S. However, because deals that close in the lower-middle market have less debt, the impact will be minimal. And again, there are other fundamentals that are driving M&A activity right now.”,
The article then goes on to cite the fundamentals that drive M&A activity: strategic buyers are sitting on an estimated $1 trillion in cash, large amount of private equity overhang, low interest rates, and low capital gains taxes.
A U.K.-based private equity group recently announced the acquisition of five companies in Canada, showing confidence in future growth of the Canadian economy as well as the five acquired companies.
“With Canadian M&A activity accelerating at a dramatic pace – in 2010 M&A activity was up 30% over 2009, reaching a five-year high – your middle-market firm could be extremely valuable to buyers right now. Nova is just one example of an extremely active equity firm looking for Canadian deals right now.”
“’The global staffing sector has seen a pickup in takeover activity in recent months as companies look to speed up growth by expanding into new geographies and niche businesses.’ Based on recent data, it appears that staffing companies are buying up smaller firms in a wide variety of markets across the United States.
According to Al De Bellas, president of staffing investment banking firm De Bellas & Co, ‘Despite negative economic news, both financial and strategic buyers continue to actively seek acquisitions.'”
© 2011All Rights Reserved