This month’s issue of the monthly executive brief providing M&A market insight for C-level management and their professional advisors.
2015 M&A Outlook: By all accounts, 2015 is poised to be a strong year for North American M&A. The U.S. economy is strengthening, interest rates are low, and corporations have stockpiled record amounts of cash. As the stars align, executives around the globe are once again turning to acquisitions as their leading growth strategy.
A recent study surveyed 735 M&A professionals. The results of this study provide telling insights into what we can expect in 2015.
First, there is no shortage of buyers. 80% of respondents said they made an acquisition in 2014 and 82% are planning one or more acquisitions for 2015.
Second, acquisitions are being driven by strategic opportunities. As seen in Figure 1, buyers are looking for opportunities to extend their business, attract new customers, expand their presence, or add new product lines. Strictly financial buyers are not the norm.
Third, transforming industries, those experiencing new and exciting changes, will be most active in 2015. These industries include healthcare, technology, and energy.
Finally, quality trumps quantity. Buyers are becoming increasingly critical and selective of the deals they look at. Targets must meet specific strategic criteria and stand the test of due diligence’s scrutiny. Fortunately for sellers, buyers are willing to pay a premium for these targets.
Looking forward, 2015 promises to be a busy year for those looking to buy or sell a business.