SourceMedia’s Mid-Market Pulse: Dealmakers Upbeat About Energy Deals

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Despite dropping fuel prices, sector expectations for M&A activity are higher than in early 2015.

Transaction professionals in the energy sector are more hopeful about their deal environment now than they were earlier this year, despite dropping fuel prices, according the latest reading of SourceMedia’s Mid-Market Pulse (MMP).

The MMP, published by Mergers & Acquisitions in partnership with McGladrey LLP, is a forward-looking sentiment indicator that monitors M&A professionals’ expectations for merger and acquisition activity within the middle market over the coming three- and 12-month periods.

The MMP is a diffusion index, and readings above 50 indicate that respondents expect an increase in activity. Dealmakers polled in July gave energy a three-month composite score of 68.2 and a 12-month composite score of 71.6. Earlier this year, the three-month reading was 49.4 and the 12-month reading was 62.4.

Many economists and energy experts say fuel prices are expected to continue to fluctuate in the wake of the July 14 announcement that Iran has reached an accord with the U.S. and other world powers. This accord will curb Iran’s nuclear program in exchange for lifting international sanctions on oil exports later this year.

“But based on responses to our surveys, when it comes to global economic developments, transaction pros are more concerned about the long-term impact of debt in Greece than oil from Iran,” said Mergers & Acquisitions Editor in Chief Mary Kathleen Flynn.

In the three-month forecast, the overall M&A composite score of 72 was higher than energy’s 68.2. That swapped for the 12-month outlook with energy scoring 71.6 and overall M&A scoring 65.2.

Each month, the MMP index spotlights an individual industry and presents respondents’ expectations for deal activity within that specific sector.

For a complete analysis of the MMP’s most recent data, go to: http://www.themiddlemarket.com/MMP-Energy-0815.

Inside the MMP

The Mergers & Acquisitions Mid-Market Pulse (MMP) is a monthly barometer of sentiment in the mergers and acquisitions business derived from monthly surveys of approximately 250 executives in private equity firms, investment banks, lenders, and advisory firms in accounting, law, and consulting.

Based on a regular set of recurring questions about expectations and trends across a range of key issues in M&A, the MMP is a leading indicator for potential changes in momentum in M&A activity. Various indicators that make up the MMP include projected deal volumes and pricing, staffing resource utilization levels, and the expected impacts of economic conditions, taxes and regulatory policy on future M&A activity.

Survey responses describe expectations and outlooks for three- and 12-month forward periods to arrive at indicator scores. Respondents also are asked to elaborate on their responses and provide opinions about other conditions that affect their M&A outlook.

What Respondents are Saying

Survey respondents are encouraged to add verbatim comments to their answers. Energy sector respondents pointed to the debt crisis in Greece and the price of oil as two factors they are closely monitoring.

“International M&A will be slower because of Greece,” one dealmaker said. Another noted, “The Eurozone situation, particularly Greece, continues to be a concern.”

Still another commented, “The price of oil is still volatile and undetermined in the long run.”

About SourceMedia

SourceMedia, an Observer Capital company, is a diversified business-to-business digital media company serving senior professionals in the financial, technology, and healthcare sectors. Brands include American Banker, The Bond Buyer, Mergers & Acquisitions, Financial Planning, On Wall Street, Accounting Today, Health Data Management, and Employee Benefit News. Information about SourceMedia is available at http://www.sourcemedia.com.

About SourceMedia Research

SourceMedia Research, a unit of SourceMedia, provides research solutions for marketers, agencies and others targeting business sectors such as banking, payments, mortgage, accounting, insurance, employee benefits and investment advisor / wealth management. SourceMedia Research specializes in reaching senior and C-level decision makers through access to its large proprietary opt-in databases and panels.

About Mergers & Acquisitions

Mergers & Acquisitions covers all aspects of middle-market dealmaking, including identifying acquisition targets, negotiating transactions, performing due diligence, and closing deals. With more than 42,000 unique monthly visitors, the brand’s website at themiddlemarket.com is continuously updated, providing real-time information and analysis of news and trends in M&A. Its monthly magazine, which serves some 20,000 subscribers, is published in partnership with the Association for Corporate Growth (ACG), a global organization comprised of thousands of private equity firms, corporate officials and intermediaries. Mergers & Acquisitions’ online video series features interviews with high-profile dealmakers, including private equity partners, strategic buyers, investment bankers and other advisers.

About McGladrey

Effective Oct. 26, 2015, McGladrey will unite with fellow members of our global network under the common brand name RSM. McGladrey LLP is the leading U.S. provider of assurance, tax and consulting services focused on the middle market, with 8,000 professionals and associates in 80 cities nationwide. A licensed CPA firm, McGladrey serves clients around the world through RSM International, a global network of independent accounting, tax and consulting firms. For more information, join our Facebook fan page at McGladrey News, follow us on Twitter @McGladrey, and connect with us on LinkedIn, and/or on YouTube.

For more information, please contact:

Dana Jackson                    
Dana.jackson@sourcemedia.com        
212-803-8329                    

Mary Kathleen Flynn    
marykathleen.flynn@sourcemedia.com
212-803-8708

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