Thursday, January 11, 2007

Pros See Same Level or More M&A Activity

New Year's Day may have come and gone, but dealmakers would be wise to restock their champagne cellars right away. The high levels of merger-and-acquisition activity that characterized 2006 will likely continue, even grow, through the first half of this year, according to the Association for Corporate Growth. And the main drivers of the deals — private equity firms — will continue to be big players, the member association predicts.

Nearly half of the 1,230 private equity professionals, investment bankers, corporate development professionals, lawyers, and accountants who responded to an ACG and Thomson Financial survey in December said they expect merger activity will increase in the next six months. Forty-one expect M&A activity to stay level, while only 9 percent say the pace will slow down.

At a combined total value of $1.6 trillion, last year's M&A action in the United States came close to topping the $1.7 trillion record for values of U.S. transactions set in 2000. And globally, 2006's worldwide M&A value — worth $3.8 trillion — beat 2000's numbers and was 38 percent higher than 2005's total, according to Thomson Financial. Overall, it was "a banner year" for mid-market and mega deals, says Elliott Williams, president of Mirus Capital Advisors and the Boston chapter of ACG.

The large amount of M&A activity helped to put a bid in the market last year. We'll have to wait and see if it does the same this year.