Jason Rigoli
The results of a twice-yearly ACG-Thomson Reuters DealMakers Survey were released, and the results show increased confidence in the economy and an expectation of increased corporate growth.
The survey was given to 473 ACG members and Thomson Reuters customers comprised of members of private equity, venture capital and buyout firms, investment bankers, intermediaries, brokers, lenders, finance providers, corporate professionals, entrepreneurs and service providers, such as lawyers, workout specialists, accountants and consultants. In other words…everybody with a mind for business.
Across the 473 responses, there’s a clear confidence that the economy as a whole will continue to rebound, and the environment for mergers and acquisitions will improve.
Only 16 percent of respondents stated that they were modifying their current investment strategy due to the poor economy. In fact, 74 percent of dealmakers expected an increase in M&A activity in the next six months. Of that 74 percent, 10 percent expect to see a significant increase and 64 percent are calling for a moderate increase. Although this is down slightly from the mid-year 2010 survey, it’s a significant increase compared to 2009 numbers when only 56 percent predicted an increase in M&A activity.
Nearly 50 percent of respondents that identified themselves as private equity, venture capital and buyout firm members anticipated job growth at their portfolio companies. That’s a large increase from even the mid-year 2010 survey which stated only about 30 percent stated the same.
When asked for their long-term prognostication on the economy, 77 percent of respondents believed that the economy will improve in the next 24 months. Only 2 percent believed the economy will get worse in the next 24 months.
Despite the overall confidence in an improving economy as a whole, there were some industries that the respondents thought would grow faster than others.
Healthcare and life sciences, industrial manufacturing and distribution and technology were expected to see the most merger activity in the first half of 2011. Healthcare and life sciences, technology and business services were expected to see the most organic growth.
The ACG-Thomson Reuters DealMakers Survey is an incredible barometer for the business climate for both the present and future. The world’s top business minds are confident that the economy is improving and now is the time for increased M&A activity. We can’t help but agree with them!