'Slow-Go' for M&A in 2009

February 2009

Challenging conditions in the mid-market are unlikely to see a dramatic improvement according to a recently-published White Paper from Livingstone Partners. A difficult debt market and general uncertainty about the medium term outlook for the global economy have led to a ‘flight to quality’ among acquirers and investors.

Despite a lull in activity among Private Equity investors, corporate acquirers are continuing to execute their M&A strategies, showing a distinct preference for ‘bolt on’ deals in the €15m to €50m value range. M&A activity in 2009 is likely to focus on a small number of key sectors including Energy & Environment, Defence & Security, Oil and Gas and Outsourcing, although ‘distressed’ deals will be evident across all sectors.

Livingstone London partner Jeremy Furniss is not predicting a significant upturn in company valuations in the short-term. He commented, “For vendors with a need to exit in 2009, there is relatively little reason to delay, as valuations are not going to increase materially until well into 2010. If you have the luxury of holding on, there is plenty of ‘grooming’ that can be done in the meantime.’

Author: Jeremy Furniss