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Middle-market CEOs see M&A heating up in 2008

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Published February 26, 2008 at 4:32 PM

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Is a wave of M&A coming amongst middle-market companies? If you asked senior management of midmarket companies the answer would certainly be yes, according to a new survey among middle-market companies conducted by CFO Research Services and CIT Group Inc. Taken in November 2007, the "M&A in Challenging Times" survey found that in spite of the weakening economy, middle-market companies with strong balance sheets plan to grow and take competitive advantages through acquisitions. However middle-market dealmakers do have plenty of concerns that could trip them up. Topping the list is the difficulty in raising capital for transactions and the lack of transparency in the private company's price and terms. After the jump, see some of the reasons executives expect deals to remain strong. - George White

M&A in Challenging Times
Finance executives said that fundamental business needs -- competition and growth -- would continue to contribute to M&A activity over the next year; easy cash, credit and private equity capital would contribute far less.
In your opinion, which of the following factors, if any, contributed to M&A activity over the last three years? Which of the following, if any, will contribute to M&A activity over the next 12 months?
	Percentage of respondents
Large amounts of cash on corporate balance sheets
Availability of credit
Availability of private equity capital
Investor pressure to show growth
Low interest rates
Industry competitive maneuvers (e.g., moves to gain market share)
■ Contributed to M&A volume over last three years ■ Will contribute to M&A volume over next 12 months Sources: CFO Research Services in collaboration with CIT