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Debtsrestructuring.com Report: Mergers & Acquisitions, Restructuring & Corporate Financing & Debt Outlook.
We are in the final quarter at the moment and it’s time to review deal activity for the year to date, and our outlook through to the Spring. We’ll also provide insights into the most active sectors that drive M&A Activity in our region. In the report, we highlight the following eight industries that comprise the majority of our current engagements: In the report below, you will see that some of the deal data is for larger public companies. The most reliable and timely data tends to be for the larger companies in each industry; however, even deal activity of largest corporations is a good barometer for M&A activity among midsized companies in the same industry. I. Aerospace & Defense II. Aircraft Parts, Maintenance, Repair and Overhaul III. Chemicals IV. Construction & Engineering While volume remains healthy, the majority of active deals this year are for companies averaging $50 million in size, which is a decrease in value compared to the prior year. A much improved housing market and a (at least temporary) resolution of government spending, and prioritization of government infrastructure spending is allowing M&A to take place at healthy levels within C&E. V. Energy: Oil & Gas Oil & Gas continues to experience strong demand from both strategic buyers and PEGs. The overall trend seems to consist of divestment of conventional legacy-producing assets and large international discoveries, using these proceeds to fund capital plans in the United States. A prime example of this is Apache Energy’s (NYSE: APA) sale of its Gulf of Mexico assets to Fieldwood Energy. This deal accounted for nearly a quarter of the M&A activity within the oil & gas space. Upstream: Midstream: Downstream: VI. Healthcare VII. Industrial Manufacturing Ongoing reports of a decrease in hiring, yet an increase in production at American factories led to improvement in profits and bottom-line performance. Cost-cutting and organic expansion since the 2007 recession allowed industrial manufacturers to set aside cash and pay back debts. In the last fiscal year, there were 963 deals for the full 12 months, while Q2 next year alone produced 484 deals. Due to this raising of cash, we expect continued M&A growth in the latter part of the current year. In particular, we may see an increase in acquisition activity for manufacturing that supports the production of oil and gas. While Q1 2013 industrial manufacturing proceeded at a glacial pace, Q2 produced robust M&A activity. This is largely due to the good health of the manufacturing industry. According to the Federal Reserve’s “Industry Production and Capacity Utilization” study, conditions returned to pre-recession (2007) levels during September of current years trading for the first time since the recession began six years ago. VIII. Transportation, Logistics, Distribution Throughout the current year – to the end, “mega-deals” worth more than $1B have skewed the deal-value number to a large degree as most deals at the moment tend to be much smaller and more locally oriented than the headline attracting billion dollar acquisitions from the previous decade. Current outlook within this space suggests that deal volume will probably remain stagnant during Q4; general economic uncertainty, and high valuations spurred on by PEG activity in this space over the past few years kept new buyers at bay. M&A across All Industry Sectors The Intralinks Deal Flow Indicator suggests that in the U.S. high dollar-value deals are dominating the M&A landscape this year. Q3 Y/O/Y figures witnessed a decrease in deal volume by 5% to 881 deals, all while experiencing a sharp increase in deal-value of 42% to $314.4B. Of particular interest to M&A: according to the IMF, the U.S. economy is projected to grow by 1.6% in the current year, 2.6% next year, and 3.5% the year after. Debtsrestructuring.com Perspective Bolstering our standard business practice at Debtsrestructuring.com, our team is conducting unprecedented deal due diligence to remove obstacles to closing a transaction and ensuring that only the most likely buyers with the capital and commitment to close a transaction make it to the closing table. Buyers are demanding increasingly thorough and professionally prepared information, earlier in their review of each acquisition opportunity, including deep level transactional and financial analysis. Companies that are more thoroughly analyzed and better prepared prior to the sale process have been rewarded with higher valuations, smoother and less intrusive pre-closing due diligence, and a quicker cycle to closing the transaction. Sources: This report has been compiled from government data, independent analysis, IBISWorld research, as well as PricewaterhouseCoopers, Deloitte M&A reports and other sources cited in the text. Our Directors have advised, raised capital, acquired and sold midsized companies in the following industries:
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