M&A Market Conditions to Improve, 81% of U.S. Execs Say



Stable markets and a healthy economic outlook are expected to drive disciplined dealmaking over the next year, according to the EY Global Capital Confidence Barometer. Eighty-one percent of U.S. executives expect the deal market to improve in the next 12 months, a jump from 52% a year ago and 53% in the last barometer in April 2014.

Additionally, 33% of executives plan to pursue a deal in the next 12 months; although this percentage is down from 41% a year ago, it is up from 29% six months ago, and respondents say the quality and diversity of deals in their pipelines are high.

“After a slow but steady macroeconomic rebound that saw the US out in front, every indication says the US will be ahead of the curve on dealmaking as well,” said Rich Jeanneret, Americas vice chair, Transaction Advisory Services, EY. “More than we’ve seen in recent years, corporates are in the financial and strategic position to do deals. And while they are treating M&A with extreme discipline, we’re seeing a renewed willingness to take chances in order to grow and innovate.”

In the U.S., middle-market acquisitions — particularly those on the smaller end of the range, between $50 million and $250 million — are expected to nearly double in the next 12 months: 52% of U.S. companies expect to pursue deals of this size, versus 31% globally.

According to the barometer, the sectors most likely to see deal activity in the U.S. are automotive and transportation, with 51% of those companies expecting to do a deal; technology companies, 38%; consumer products and retail, 31%; and financial services, 30%.

To view the full EY Global Capital Confidence Barometer, click here.


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