New M&A Forecasts Issued on Thirteen Key Industries

Acquisition Advisors has issued their 2010 forecast for merger and acquisitions (M&A) activity in thirteen key industries – Aerospace and Defense, Chemical, Construction, Consumer Products, Energy, Financial Services, Health care, Hospitality and Leisure, Manufacturing, Publishing, Retail Food and Beverage, Technology and Software and Transportation and Logistics.

Each focuses on what is commonly referred as the “lower middle market,” which is companies valued between $10 million and $250 million. Acquisition Advisors is the M&A firm of choice for buyers and sellers of mid-size U.S. companies. Every March it issues a review of the prior year’s activity and forecasts for the coming year for the overall market as well as key industries.

“To no one’s surprise, Mergers and Acquisitions (M&A) activity in the lower middle market was down significantly in 2009 … and it continues to lack sizzle,” said David L. Perkins, Jr.

“Ample well-capitalized buyers are on the prowl, and the largest impediment to getting deals done — debt financing – has begun to dissipate. However, there’s a dearth of sellers. Most would-be sellers are sitting on the sidelines because they don’t think it’s a good time to get a good price,” Perkins continued.

To be sure, multiples have contracted. Still, buyers are ready, willing and able to pay “fair” prices. Some deals are getting closed and they’re not all “distressed” situations. Buyers are just no longer willing pay … and their bankers are no longer willing fund … purchase multiples above the long-term trend.