Survey Shows Top Driver for Middle Market M&A in 2017 is Access to New Markets

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Capstone Strategic’s survey of middle market executives shows most see the same (43%) or growing (31%) M&A activity in their industry. 47% are pursuing M&A in order to access new markets.

43% of middle market executives reported the same level of M&A activity in 2016 as 2015 and 31% reported more M&A activity in 2016 than in 2015.

Capstone Strategic’s survey of middle market executives shows most see the same (43%) or growing (31%) M&A activity in their industry.

2017 presents a unique opportunity for companies that decide to execute strategic acquisitions.

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Capstone Strategic, the leading M&A advisory firm for the middle market, surveyed middle market executives from multiple industries on their growth and M&A experience in 2016 and their outlook for 2017. The survey was conducted in December 2016 and followed previous annual surveys of the middle market.

M&A activity across the board is mostly seen as the same (43%) or growing (31%).

Looking forward, our respondents are evenly split on whether or not they will pursue M&A in 2017. 35% are less than 50% likely to execute acquisitions and 35% are more than 50% likely. The top driver for pursuing M&A this year is access to new markets (47%).

As for obstacles to M&A, time and attention demanded by the process is the top barrier to pursuing in acquisitions in 2017 (25%) while the most common reason for not considering M&A as a tool for growth is lack of appropriate target companies (28%).

The overall growth picture is improving. Those reporting modest growth rose from 58% in 2015 to 67% in 2016 and those reporting high growth grew from 11% in 2015 to 13% in 2016. Those reporting contraction shrunk from 9% in 2015 to 5% in 2016.

The business environment is seen by most in a positive light, with the majority reporting the same (50%) or an improved (35%) environment for growth. Compared to 2015, fewer executives saw a worsening environment for growth (8% compared to 13%).

Capstone’s CEO David Braun said: “The survey confirmed that 2016 remained an active year for middle market mergers and acquisitions and looking ahead, we believe we’ll begin to see a renewed interest in M&A activity due to pent up demand and supply in the marketplace. 2017 presents a unique opportunity for companies that decide to execute strategic acquisitions.”

The full survey, State of Middle Market M&A 2017, can be viewed by clicking here.

About Capstone Strategic, Inc.

Capstone Strategic is the leading M&A advisory firm for the middle market specializing in not-for-sale acquisitions and corporate growth strategies. Founded in 1995 by CEO David Braun, Capstone has facilitated over $1 billion of successful transactions in a wide variety of manufacturing and service industries. Capstone utilizes a proprietary process to provide tailored services to clients in a broad range of domestic and international markets. For more information about Capstone and its growth strategy and advisory capabilities, please visit http://www.CapstoneStrategic.com. For timely commentary and insights into the M&A market, please visit the Successful Acquisitions blog at http://www.SuccessfulAcquisitions.net. Capstone can also be reached at 703.854.1910 or Growth(at)CapstoneStrategic.com.

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Lydia Fairfax

Lydia Fairfax
@GrowthEngineers
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