SourceMedia’s Mid-Market Pulse: Tech, Media and Telecom Headed For Short-Term Weakness

Share Article

Once-robust Sector Expects Slowdown in the Three-month Forecast

While a rising tide may float all boats, the opposite may also be true, especially in the wake of higher interest rates.

Dealmakers predict slower growth in the technology, media and telecommunications (TMT) sector in the short term, according to the latest reading of SourceMedia’s Mid-Market Pulse(MMP). However, they do expect activity to pick up again in the long term.

The MMP, published by Mergers & Acquisitions in partnership with RSM US LLP (formerly 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 3- and 12-month periods.

The MMP is a diffusion index, and readings above 50 indicate that respondents expect an increase in activity. TMT registered a score of 63.0 for its three-month forecast, nearly 17 points lower than the sector’s reading six months earlier. The 12-month score of 79.2 demonstrates optimism for the long term. In both the three-month and 12-month forecasts, TMT scored higher than the overall M&A index.

“The near-term results suggest that even healthy sectors may take a hit in the first months of 2016,” says Mergers & Acquisitions Editor in Chief Mary Kathleen Flynn. “While a rising tide may float all boats, the opposite may also be true, especially in the wake of higher interest rates.”

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, visit http://www.themiddlemarket.com/MMP_TMT0116

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 3- 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. Dealmakers pointed to tax and regulatory issues as cause for concern in the sector.

“Despite strong growth in the sector, tax and regulatory trends in the U.S. are negating future opportunities,” one respondent said.

Other respondents said businesses are trying to enhance revenue and reduce costs. “Some larger firms have focused on consolidation within the sector, trying to fill holes in their product offerings,” a dealmaker said, adding, “We expect this trend to continue into the near future.”

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 40,000 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 over 48,300 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 RSM US LLP
RSM US LLP is the leading U.S. provider of audit, tax and consulting services focused on the middle market, with more than 8,000 people in 80 offices nationwide. It is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 37,000 people in over 110 countries. RSM uses its deep understanding of the needs and aspirations of clients to help them succeed.

For more information, visit http://www.rsmus.com, like us on Facebook at RSM US LLP, follow us on Twitter @RSMUSLLP and/or connect with us on LinkedIn.
For more information, please contact:

Mary Kathleen Flynn
212-803-8708
marykathleen.flynn(at)sourcemedia(dot)com

Dana Jackson
212-803-8329
Dana.jackson(at)sourcemedia(dot)com

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Jeannie Nguyen
Visit website