Free Site Registration


KPMG Study: More M&A Deals Expected in 2013

Print
Email
Reprints
New York (March 6, 2013)

By Tamika Cody

KPMG LLP tallied the numbers from a recent survey and found that M&A, private equity and tax professionals who focus on the technology, financial services and health care sectors expect to see a rise in M&A deal activity among their clients in 2013.

Dealmakers who are focused on diversified industrials, energy and consumer sectors also took part in the study. All in all, the audit, tax and advisory firm polled 400 respondents, of which 60 percent said that they would do more deals in 2013 than they did in 2012. 

Twenty-four percent of those who participated in the poll stated that middle-market deals will be the sweet spot because financing terms on smaller deals are less stringent than large transactions and megadeals. On the other hand, the report found that 49 percent of participants felt that easier financing terms, less risks and integration obstacles, and fewer complex due diligence that usually comes along with deals valued below $250 million, will be the driving force for middle-market deal activity in 2013.

The report also showed that the pipeline for 2013 is already experiencing a high volume of middle-market deals. The respondents agreed that favorable credit terms and hefty cash flow on corporate balance sheets are driving the deals. As a result, it looks like corporate buyers will have the upper hand over private equity suitors for the first half of the first quarter. 

"The underlying fundamentals in the deal market are improving, with the combination of a stabilizing U.S. economy, favorable credit terms, open debt markets, and high cash balances paving the way for an increase in M&A volume this year," Americas lead for KPMG's Transactions & Restructuring practice Dan Tiemann said in a statement. "As a result, companies may be highly motivated to execute transactions that drive their growth agendas, including deals that allow for business transformation and optimize new operating models."

On the flip side, some participants aren’t so excited because they are concerned that new regulations may hinder them from conducting deals. Twenty-one percent believes that the new regulations will cause integration challenges before and after a deal. Eighteen percent stated that the new regulations put a slight delay on their deals, while 7 percent found that their deals came to a complete standstill. However, there was another 7 percent who said new regulations were their main reasons why they are actively pursuing deals. 

So where will buyers shop for their next acquisition? Forty percent of those polled said they would steer clear of emerging markets and would seek out deals in North America. Others said they would be "selective" and would tread lightly over to emerging markets for their next deal. Twenty percent plan to head to China, 17 percent will keep their investment options open in Brazil, 10 percent will head to Western Europe, 4 percent will seek opportunities in India, and 2 percent will tap into Russia and Eastern Europe.

0 Comments

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Accounting Today, please use the form below to login. When completed you will immeditely be directed to post a comment.

 

Follow Accounting Today
Advertisement
Advertisement

What's the Biggest Threat or Challenge Facing Accountants?

May 22, 2013

Attendees at Accounting Today's Meet the Editors Dinner at Keens Steakhouse in New York discuss the top issues confronting accountants.

Women in Accounting: Breaking the Mold

May 21, 2013

A continued conversation with Marcum’s Nanette Lee Miller and Janis Cowhey McDonagh about the obstacles women in the accounting profession face when trying to make their way into leadership positions.

Advertisement

SLIDE SHOW

Top 10 Tech Initiatives -- 2013

May 5, 2013

The AICPA's annual list of IT priorities for accounting firms.

Tax Stats: May 2013

April 30, 2013

Our monthly collection of statistics from the world of tax.

10 Biggest Estate Planning Mistakes

April 29, 2013

Help your clients avoid these common pitfalls.

Common E-mail Security Mistakes

April 23, 2013

These five bad habits can make your confidential information -- and that of your clients -- easy to steal.

The Art of the Tax Cartoon

April 9, 2013

A selection of tax cartoons from Philly tax firm Drucker & Scaccetti's 'Finding Humor in Taxes' exhibit.

Advertisement
Advertisement
Advertisement