PwC's M&A Outlook Shows Optimism, Focus on Deal Execution

July 26, 2013 10:50 by Clayton Reeves in Capital Markets, Economy, M&A  //  Tags: , , ,   //   Comments (0)

PwC reports that the fundamentals behind M&A activity remain strong despite a slowdown in U.S. merger and acquisition (M&A) activity in the first half of 2013.  As we at CCCA have seen in the market, deal flow is constricted not by a lack of willing buyers, but a lack of targets with suitable fundamentals.  Acquirers are attempting to find companies with a history of growth, and many have struggled over the last few years to produce meaningful growth.

Martyn Curragh, PwC's U.S. Deals Leader, stated in the report that “challenges in the M&A market are being driven by a lack of well-positioned assets for sale, not poor deal fundamentals. A shortage of quality assets and a growing list of willing acquirers dictate a need for confidence and greater preparation to execute, from deal strategy through integration. Greater competition is driving valuations and deal timelines, leaving some would-be acquirers to reflect on missed opportunities, and others with buyers’ remorse for failure to capture deal value.”

So, focus shifts to realism around the probability of a deal being completed.  In our mind, this further enforces the need for experienced deal makers to discern the legitimacy of potential acquisitions.

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