This week’s digest covers expert advice on exit timing from a business and 2013 M&A activity projects, as well as data that is further proof of the private equity industry’s concentration on smaller, more strategic deals.
Exit Timing – What the Experts Say
Carl Doerksen recaps a recent webinar hosted by The Deal.com, a leading publication in the M&A space. The panelists represented some of the leading participants in the M&A industry and their insights regarding current trends, especially trends affecting middle-market deal making and exit timing, were quite compelling.
Morningstar and M&A Activity in 2013
“Recently Bridget Freas, Senior Equity Analyst for Morningstar, was interviewed about potential M&A activity in 2013. One of the most interesting factors impacting analysts and their forecasts for this year was the extraordinary flurry of deals closing at the end of last year in anticipation of changes in capital gains taxes on January 1. Given the very large increase in deals closing during the 4th quarter of 2012, folks analyzing the data and predicting trends are, as Ms. Freas put it, ‘cautiously optimistic that 2013 is going to be better than 2012.’ ”
Add-On Private Equity Activity
“The growing popularity of add-ons in the private equity realm has been recently documented by Pitchbook, a leading research organization tracking this industry. In their 2nd Quarter 2013 Private Equity Breakdown, they indicate that in 2004 add-ons as a percentage of deals closed by private equity firms was at 36%. Last year this increased to 48% and in the first quarter of this year reached 51% of all PE deals. This is the first time since the data has been tracked and compiled that add-ons were more than 50% of all PE deals closed.”
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