Survey expects stronger M&A market

The U.S. mergers and acquisitions market will be stronger in the next 12 months compared to the last 12 months, according to Dykema's 2013 M&A Outlook Survey. The ninth annual survey of leading company executives and outside advisors examined how the U.S. economy, financing challenges, and other domestic and global matters will impact the M&A market in the coming year. The survey revealed that most respondents (68 percent) believe that the U.S. M&A market will be stronger in the next 12 months compared to the last 12 months. In addition, half of the respondents (50 percent) possess a positive outlook about the U.S. economy going forward. This is a dramatically different picture from the 2012 survey, which saw only 37 percent of respondents believing the market would be stronger and 25 percent saying they felt positive about the state of the economy in the next year. "As the nation continues to recover and rebound financially, the business community appears to be more optimistic about their investment options and the U.S. economy this year," said Dave Cellitti, leader of Dykema's M&A practice. "Excess capital would seem to be one main reason for this surge in optimism; however, executives are still cautious as they continue to make decisions in a turbulent economic environment." U.S. economic conditions were cited again by most respondents as an explanation for M&A activity. The continuous "kick the can down the road" crises, including the sequester, government shutdown, and looming debt ceiling have made their impact on the confidence of M&A players. This year more survey respondents anticipated that they would be involved in an acquisition (70 percent) as opposed to 53 percent in 2012. For the sixth year in a row, most respondents (57 percent) expect strategic U.S. buyers to increase their presence most in the market. "The business community is feeling better and is confident that it will be involved in an acquisition next year," explained Jeff Dalebroux, director of Dykema's Business Services Department. "This increased confidence is undoubtedly connected with lower rates, availability of capital and an overall positive outlook for the economy moving forward." According to Dykema, the survey yielded a number of other interesting conclusions, including: * A positive outlook. In 2012, only 25 percent thought the U.S. economy would look positive over the next 12 months compared to 50 percent of respondents in this year's survey. * Room for improvement. In 2012, only 30 percent thought the economy would improve in the next 12 months when comparing it to the prior 12 months. That number rose to 54 percent this year. * Continued uneasiness. When rating the most common obstacles experienced in deals within the past 12 months, financing went from the second most common to the fourth most common obstacle from 2012 to 2013. Uncertainty in the economy remained at the top spot. In September, Dykema distributed the survey via e-mail to a group of senior executives and outside advisors including CEOs, CFOs and other company officers. Survey respondents were asked about the future of the market, cross-border deals and the general strength of the economy. The results will be revealed at Dykema's State of the Economy and 2013 M&A Outlook event in Chicago where distinguished speakers including Kristen Scarpa, vice president and investment strategist at Barclays; Jonathan Leiman, vice president at Pfingsten Partners; and Robert Satow, managing director at Lincoln International LLC will discuss the issues that are shaping the economy, the M&A market and what the next 12 months will hold. For a copy of the full results of the survey, visit http://www.dykema.com/mergers/. Published: Tue, Nov 5, 2013

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