Midmarket M&A Analysis: Deal Size

This is the second part in a series addressing current and expected viewpoints on M&A from across a number of professionally relevant sources. For part one, read Midmarket M&A Analysis: 2013 to 2014.

2013 saw a number of announced large-cap deals aimed at consolidating market positions and facilitating growth into new regions. Most notable has been Verizon Communications’ announcement of the purchase of the remaining 45% stake in Verizon Wireless from Vodafone. The deal is valued at US$124.1bn and will be the third-largest deal of all time and the biggest in the past decade.

At the same time, completed deals under $1 billion soared in October 2013, as data from Thomson Reuters demonstrates which is leading dealmakers to express continued confidence in middle-market M&A growth.

“Barring a significant macroeconomic shock, 2014 is poised to be a great year for middle-market deal making,” says Mark Brady, global head of M&A at Chicago investment bank William Blair & Co. LLC. Of those who participated in a Mergers & Acquisitions survey conducted in late November and early December, 71 % of respondents said 2014 will be a better year for mid-market M&A than 2013.

In fact, the pendulum seems to be swinging towards the midmarket. According to a KPMG survey there will be very few megadeals in 2014, with middle-market deals dominating M&A. 77% of respondents expect their respective deal activity will be valued under $250 million, followed by 12 % who anticipate their acquisitions will be valued between $250 and $499 million, and only 5% between $500 and $999 million.  

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