Chicago, IL (PRWEB) November 11, 2010
The annualized closing rates for merger and acquisition transactions among private companies decreased in the second half of 2009 but reported multiples held steady according to the Deal Stats survey released today by the Alliance of Merger & Acquisition Advisors® (AM&AA), the leading association and credentialing body for middle market M&A professionals.
The Deal Stats survey results for the 6-month period, ending June 30, 2010, were compared to prior survey periods. Findings include:
“Deal making in the lower middle market continued to be challenging for our members in the first half of 2010,” said Dr. Perry Campbell, Chair of the AM&AA Market Research Committee, and Managing Director of the Portland/Vancouver office of ACT Consultants, Inc. “Average transaction size increased overall, but deal closing rates have still not recovered to pre-recession levels, although transaction multiples have stabilized well above the levels we saw during the depth of the recession.”
The great majority of reported deals (95 percent) were for private transactions less than $50 million in size, and most (92 percent) were in the $1 million to $25 million range. The participants included M&A Brokers (55.4 percent), Advisors (23.0 percent) and buyers (21.6 percent). M&A Brokers include business brokers, intermediaries and investment bankers who are compensated largely on a success fee basis. Advisors are generally those compensated on an hourly or fee-for-service basis.
“It is very important for M&A Brokers and Advisors to track trends in the active lower middle market,” said Mike Adhikari, president of AM&AA and president and owner of Illinois Corporate Investments, Inc. and Business ValueXpress. “The continuation of stable transaction multiples in this post-recession period is a positive trend. Coupled with the dry powder in the hands of private equity groups and strategic buyers and improved financing availability, perhaps these multiples may be attractive enough to entice more sellers to leave the sidelines.”
The AM&AA is the leading association and credentialing body for middle market M&A professionals. Our leadership and people have unrivaled multidisciplinary expertise in the financial services industry. AM&AA members represent sellers and buyers of small and middle-sized businesses ranging up to $500 million in transaction value. Their services are seller representation, buyer representation, due diligence, accounting financing, business valuation, tax planning, legal, strategic, other advisory and transaction services. The AM&AA offers members a solid platform for professional collaboration. http://www.amaaonline.org/
Deal Stats Sponsors
Financial support for the Deal Stats survey was provided by:
ACT Consultants, Inc.
Alliance of Merger & Acquisition Advisors