Overall deal value and volume remain flat, but middle market activity is on the rise.
When compared to 2016, worldwide M&A value and volume remained relatively flat for the first nine months of 2017, rising only 2% and 0.4%, respectively. In the US, announced deal value dropped 12% while the number of deals rose 18%, indicating a higher number of smaller deals are being executed.
As we saw earlier in the year, middle market M&A is on the rise as companies put big deal “on hold” and turn to smaller acquisitions for growth. The number of deals less than $1 billion in value, rose by 20%, and the value of middle market deals rose by 15%. Uncertainty remains regarding taxes and regulatory policy in the US and with the bull market, companies are less willing to pay premiums for large deals. In today’s market, buyers are finding multiple smaller transactions, or serial acquisitions, can help them execute on strategic growth while avoiding the risks associated with megadeals. The first half of 2017 was the strongest first half for the middle market and robust activity is likely to continue for the rest of the year.
Check out our infographic below for a snapshot of M&A in 3Q 2017.
Photo credit: Gabriele Diwald via Flickr CC BY 2.0