A couple of times a year, Pricewaterhouse Coopers LLP (PwC) produces an overview of current U.S. M&A activity. Earlier this month they released their mid-year review of 2011 M&A activity, and based on their analysis of the data, they claim that we are in a sellers’ market. This may surprise you to hear. According to PwC:

“ ‘Corporate buyers emerged from the downturn as the dominant force in the deal market having stockpiled cash from restructuring and cutting costs during a period when growth opportunities were limited,’ stated Martyn Curragh, US Transaction Services Leader with PwC. ‘At the same time, competition for quality assets is helping push up valuations and average deal value. In this type of “sellers’ market,” where assets are being strongly pursued, buyers are competing aggressively and are focused on identifying value drivers to optimize pricing. With sellers taking more control, they are in the driver’s seat and are demanding a swift diligence process with more certainty around the outcome. We have seen an increase in sellers’ preparation and diligence to enhance asset value, reduce business/management interruptions and decrease the overall diligence process time.’” (emphasis added)

This is the first analysis I have seen so far this year that indicates we are in a sellers’ market. However, based on the data, intuitively this does make sense. [Read more…]