Association for Corporate Growth (ACG)/Thomson Survey Indicates 2006 on Track for Record M&A Year

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With worldwide mergers and acquisitions on pace to break the year 2000 record, dealmakers are again expressing great optimism with 90% saying the current M&A environment is good or excellent. The ACG/Thomson DealMaker’s Survey polled 1,201 investment bankers, private equity professionals, corporate executives, as well as lawyers, accountants and other service providers involved in the deal economy in May and June of 2006.

Collectively these firms represent over $75 billion of capital under management.

With worldwide mergers and acquisitions on pace to break the year 2000 record, dealmakers are again expressing great optimism with 90% saying the current M&A environment is good or excellent. The ACG/Thomson DealMaker’s Survey polled 1,201 investment bankers, private equity professionals, corporate executives, as well as lawyers, accountants and other service providers involved in the deal economy in May and June of 2006.

“It is evident from the activity we are seeing in the Seattle market, many companies and private equity firms have abundant cash available and are aggressively trying to put it to work,” said Glenn S. Burroughs, president of ACG Seattle and vice president and head of PNC Business Credit’s Seattle office. “The level of transaction activity and interest in Northwest companies has increased markedly in the last two years.”

Franz von Bradsky, chairman of ACG Seattle’s Northwest Growth Financing Conference and president of Green Tree Capital concurred with Burroughs remarks. “The conference is two months away and already there are over 50 private equity firms, mezzanine/subordinated debt firms, business development companies and hedge funds from across the United States and Canada registered,” von Bradsky said. “Collectively these firms represent over $75 billion of capital under management.”

According to Thomson Financial, a US$1.73 billion provider of information and technology solutions to the worldwide financial community, the total value of global M&A has reached $1.613 trillion so far in 2006 (as of June 13). That sum represents a 41% increase versus the corresponding period a year ago, when $1.143 trillion worth of deals were completed. The 2006 number is also on pace to surpass 2005’s global M&A total of $2.769 trillion.

Private equity firms have been busy investing existing funds and raising new ones and are chasing larger deals, often teaming up in “club deals” to challenge corporate “strategic” buyers.

According to Buyouts Magazine, there were 223 LBO and mezzanine funds raising capital in the first quarter, which together amassed $34.75 billion in new commitments. The robust figures are coming on top of a record breaking year, as U.S. buyout shops closed on a total of $173.5 billion in 2005.

“The record amount of funds being raised hasn’t shown any signs of letting up,” said Buyouts Managing Editor Ken MacFadyen. “And as long as the debt markets remain accommodating and there are no hiccups in the economy, private equity deal volume can only be expected to continue its ascent as well.”

For complete survey results, visit http://www.acgseattle.org/survey.pdf

Founded in 1954, the Association for Corporate Growth is a global association for professionals involved in corporate growth, corporate development, and mergers and acquisitions. Today ACG stands at more than 10,000 members from corporations, private equity firms, financial institutions, and professional service firms representing Fortune1000, FTSE 100, and mid-market companies in 51 chapters in North America and Europe.

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