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M&A activity set to recover

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By Miranda Brownlee
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2 minute read

2014 is likely to see mergers and acquisitions (M&A) return to their previous levels, with economic data looking encouraging, according to international law firm White & Case.

Oliver Brahmst, a partner in White &Case’s M&A practice group, said while deal volumes have been down, deal value has been up, implying that investors are “moving away from opportunistic purchases and focusing on larger, longer-term plays”.

Mr Brahmst said although the main driver of M&A in the past two to three years has been private equity, strategic investors are now returning to the market to make acquisitions.

“It’s a very different picture from just a short time ago – six months ago, the chief executive of a public company or an aligned strategic company may have been hard pressed to say whether his customers would be coming from 12 months out,” he said.

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Chris Stadler, managing partner of private equity and investment advisory firm CVC Capital Partners Advisory, said the increase in M&A from corporates in the past 12 to 24 months has come from the need to “augment rather anaemic organic growth”.

“As a result, companies that are in a good position with their capital structure would certainly have the wherewithal to do it, so the corporate side is significantly deep here, and I think they have sufficient cash,” said Mr Stadler.

“Corporate balance sheets around the world are in great shape, and they have access to cheap funds.”

Mark Dickinson, a partner at private equity investment firm Arle, also believes the “signs remain strong that M&A recovery is ongoing”. He said activity and optimism will be more evident in certain sectors than others.

“The perennially attractive sectors, healthcare, telecoms and media, will certainly expand to include energy,” said Mr Dickinson.

“There’s been a lot of private equity money going into that sector and will continue to do so.”

M&A activity set to recover

2014 is likely to see mergers and acquisitions (M&A) return to their previous levels, with economic data looking encouraging, according to international law firm White & Case.

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