Data Room provider, Firmex, recently partnered with Mergermarket to produce an extensive report on mid-market M&A prospects for 2015. By reaching out to dealmaking professionals across North America, they came back with a wealth of valuable information for businesses and investors hoping to get ahead of market trends.
The news is good overall, with respondents seeing an excellent landscape for M&A, financing and foreign interest in 2015.
Eighty-eight percent of respondents expect mid-market M&A to rise this year in both the US and Canada, while only 12% expect the level of activity to remain the same. Among those, 18% believe US M&A will "significantly increase" and 26% foresee the same for Canada.
Get the full report here. The majority of respondents identified technology, media and telecommunications as the industry that will experience the most activity, with energy and business services coming in a close second. Also crucial will be consumer goods and real estate, while financial services and life sciences/health care were identified as the least important.
Conversely, commodity prices are likely to pose a challenge, with 60% of respondents believing that the drop in oil prices will significantly impact Canadian M&A activity.
Other major findings include:
- The top drivers of mid-market M&A in the region are companies trying to reach growth targets, according to 38% of respondents, followed by non-core divestitures (32%).
- 98% of respondents believe that private equity interest in North American mid-market investments will increase over the next year.
- The Asia-Pacific region will be especially important, as 40% of respondents say the most foreign interest will come from there, and 48% of respondents say mid-market firms are most likely to look there for acquisition targets.
- The increased presence of business development companies as well as senior cash flow and mezzanine lenders will also play a big part in fueling the growth of middle market activity.