KUHN CAPITAL Tuesday, March 20, 2018
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M&A Re-Rebound?


We all know that M&A -- measured both by number of deals done and by dollar value -- got slammed in the real estate-driven recession starting in 2007. For the next few years, everybody pulled their horns in. Sellers hesitated to cash out with sales and profit going south; buyers hesitated buying "falling knives," wondered if things could get worse, and hoarded cash. Even if a few intrepid buyers ventured into the market for a loan, bankers wouldn't come out and play.

We finally saw wan flickers of a recovery starting in 2010, with 2011 looking even better. Then, disappointingly, both the number of deals that closed and their gross value fell about 13% in 2012, staying at that depressed level through 2013.

Now at last we may be breaking out of that straight-jacket: according to Thomson Reuters, mid-market deal volume for the 12-month period ending last August popped up about 10% versus the same period in the prior year. Gross value did even better, rising 13%.

More good news: tech industry transactions (our specialty) beat these generic mid-market numbers. In the year ending this September versus the same 12-month period in the prior year, the number of deals featuring US electronic product manufacturers, IT vendors and communications companies was up 18% according to S&Ps Capital IQ.

Who knows if this recent pop will translate into a sustained trend but -- given the rocky road of the past seven years it would be about time.

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