European Mid-Market M&A Expected To Boom
80% of Survey Respondents Expect Buoyant Last Quarter for European Mid-Market
London, 11/07/2005, A new research report, The European Mid-Market M&A Survey produced by Thomson Financial and M&A International, Inc., reveals that Mid-Market M&A activity is expected to boom in the last quarter of the year.
The report surveys the views of corporate finance professionals from more than 50 firms on the state of the mid-market in Europe. It identifies the key trends affecting the market, and gives an indication of the deal flow expected by advisors.
Key findings of the survey include:
Near-perfect market conditions:
* Close to 80% of respondents are expecting Mid-Market M&A activity to be buoyant in the fourth quarter, with fewer than 1% of respondents feeling less positive than last year.
* Aggressive private equity investing, together with the availability of debt financing are identified as the main drivers of activity. According to Thomson Financial, $54bn was raised by European private equity funds this year, more than double the 2004 total of $24bn.
* In the first nine month of 2005, the value of European Mid-Market deals (up to US$500m) totaled $206bn. This was an increase of 12% on 2004, according to Thomson Financial
* Over 80% of respondents believe the market remains a “sellers’ market” with 85% seeing similar or stronger valuations than last year.
Economic conditions had little impact on European Mid-Market M&A:
* The challenges posed by high oil prices and a weak dollar are not significantly impacting mid-market M&A activity, while compliance issues and recent regulation were found to be an issue for less than a quarter of respondents.
* 90% of respondents have either increased or maintained debt multiples for buyouts.
* Respondents believe the impact of hedge funds on their business is muted, with only 12% considering hedge funds as a significant influence on the Mid-Market.
Independent advisory firms are booming:
* 70% of advisors are experiencing increased deal volumes, with only 5% of advisors seeing decreased activity.
* 57% of respondents are showing stronger revenues, while only 8% of advisors admit to lower revenues this year.
* Thomson Financial/Freeman estimates that fees in the European Mid-Market (up to US$500m) in the nine months to 30 September 2005 amounted to US$4.8bn.
The survey is the first undertaken by Thomson Financial and M&A International, Inc. on the European Mid-Market. Full copies of the findings are available on request.
Commenting on the results of the survey, Henry Gibbon, Director of M&A at Thomson Financial, said: “The results of the survey highlight the confidence amongst the mid-tier corporate finance community that M&A activity will continue to grow strongly this year and beyond. With trade buyers returning to the acquisition trail, private equity investors aggressively bidding for companies and the availability of cheap financing, we are experiencing optimal conditions conducive to higher M&A activity. This should also provide M&A professionals with ample rewards come bonus time.”
Hans Bethge, Chairman of M&A International, Inc. added: “The optimistic mood suggested by this survey echoes that which prevailed at last month’s global M&A Mid-Market Forum, hosted by M&A International in Hamburg, with 340 attendees. European mid-market practitioners are clearly eager to take advantage of the current conditions and concentrate on getting deals done. Moreover, the large number of family-owned companies in Europe that are looking for independent corporate finance advice presents a great opportunity for independent, smaller advisory firms. ”
About Thomson Financial
Thomson Financial is a US$1.73 billion provider of information and technology solutions to the worldwide financial community. Through the widest range of products and services in the industry, Thomson Financial helps clients in more than 70 countries make better decisions, be more productive and achieve superior results. Thomson Financial is part of The Thomson Corporation (www.thomson.com), a global leader in providing integrated information solutions to more than 20 million business and professional customers in the fields of law, tax, accounting, financial services, higher education, reference information, corporate e-learning and assessment, scientific research and healthcare. With revenues of US$8.10 billion, The Thomson Corporation lists its common shares on the New York and Toronto stock exchanges (NYSE: TOC; TSX: TOC).
About M&A International, Inc.
M&A International, Inc. (MAI) offers the unparalleled resources of 42 independently owned merger and acquisition specialists and investment banking firms in 35 countries in the Americas, Europe, Asia-Pacific and South Africa. These firms are linked in a global network created to exchange information, ideas and contacts in the fast developing global mid-market and most importantly close transactions.
Established in 1985, MAI celebrates its 20th anniversary this year. Network members in total have over 300 professional dealmakers, making it the largest M&A mid-market network. During 2004 M&A International Inc. member firms closed 209 deals worth a total of over $10 Billion. The typical deal size ranges from $10 up to $250m, with a capacity to advise on deals up to $1 billion. The average deal size in 2004 was $50m, 40% of all deals were cross-border. For general information please visit www.mergers.net
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- Public Relations Manager - Europe
- Thomson Financial
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