M&A activity in 2017?

Mergers & Acquisitions M&A Conditions Index (MACI) shows leads for new transactions and deals delivered at their highest score for 2016 in October. This points to a strong fourth quarter in 2016. A majority of survey respondents expected that, barring a major catastrophe, 2017 would be a strong one for M&A activity.

While Mergers & Acquisitions focuses on the middle market, that is, companies with revenue from 5 million to $1 billion, what about smaller businesses, those with less than $5 million in revenue? There the news is equally encouraging.

BizBuySell focuses on small businesses,. According to BizBuySell’s December nationwide survey of business brokers, 79% expect the number of business-for-sale transactions to improve in the new year. Survey respondents cited the the following factors for their enthusiasm: President-elect Donald Trump’s policy changes (31%), an increasing number of owners looking to sell (22%) and improving small business financials (14%). Just about half of the responding business brokers expect sale prices in 2017 to remain consistent with 2016, while another 45% expect prices to increase.

Smallbizdaily.com also projected good news: “While the post-recession market leaned in favor of buyers thanks to reduced confidence and tighter access to capital, today’s environment is much more balanced. A good indicator of this is the fact that sellers received a final sale price much closer to their original asking price than in previous years, a trend we expect to continue in 2017.”

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