If you read the financial press and the occasional trade journal, the recurring theme this month is bullishness on M&A activity. The more deals the better for Alacra, so these predictions are certainly well received, but we've been hearing this for the past couple of years. Companies have plenty of cash, rates are low and creating organic growth is challenging so time is ripe to acquire in many industries:
Henny Sender in the weekend FT: …much of the merger activity expected this year both into the US and outward bound from the US is likely to be energy deals, bankers say. Mergers and acquisitions in the upstream oil and gas industry in the US set records last year both in terms of the value and number of deals.
DealBook: A Jedi of Deals Brings His Magic Back to Morgan Stanley: As Mr. Cory sees it, the industry is at the start of another bull market for mergers and acquisitions. Last year, deal volume in the sector jumped more than 26.9 percent, to $190.6 billion, according to Thomson Reuters. He has historical perspective. In his 30 years with Morgan Stanley, he has handled more than 300 deals, including the breakup of AT&T in 1984. "There are tectonic shifts going on, and the older companies need to figure out how to play," said Mr. Cory, 56.
CFO.com: M&A: Running on Energy Merger and acquisition activity may be off to a slow start this year, but there's plenty of energy in the market for takeovers — the kind of energy that heats homes and powers cars. In fact, the energy sector is the only industry with any semblance of a deal-making trend in North America to start the year.
Genetic Engineering and Biotechnology News: M&A Activity Likely to Stay Hot in 2012 Though Blockbusters May Be Fewer…merger and acquisition activity should continue in 2012 as biopharma giants continue to fill holes in their product pipelines by pursuing deals with smaller companies.
On Wall Street: Morgan Keegan Deal Portends Possible M&A Activity Ahead: Raymond James's acquisition of Regions Financial's Morgan Keegan brokerage followed months of waiting after intentions to sell the firm were announced in 2011 and could be the first of many similar deals in 2012. "I think you're going to see more deals in 2012 coming through in a similar fashion," Alois Pirker, research director at Boston-based financial services research firm Aite Group, said Wednesday. "It's going to be a challenging year still ahead of us. I think the mid-sized firms will be subjects for acquisition. I think the firms that are strong can use the position to expand."
Efinancial News: Technology M&A set for strong 2012: The technology sector, which was the second largest source of merger and acquisition advisory fees in 2011, is set for another strong year of M&A, according to a report. CreditSights, the independent research boutique, has identified a number of areas in the technology that will be a focus for M&A activity in 2012, including enterprise software in the wake of the $11.7bn Autonomy acquisition by Hewlett Packard last year. The report said: "Many large technology companies are trying to accelerate growth in software – both organically and through acquisitions."
FM World: FMs Predict More M&A Activity in 2012: Facilities management providers are predicting increased merger and acquisition (M&A) activity in 2012 as the sector looks to consolidate, according to a survey by Barclays Corporate bank. Around 83 per cent of FM providers believe M&A activity will pick up this year with half of those polled suggesting that there is a good chance they would be making acquisitions. Twenty-one per cent said they were already eyeing acquisition targets.
CFO Journal: M&A Outlook for 2012 Improves: The New Year has gotten off to a relatively strong start for M&A, with five multi-billion dollar deals having already been announced through the first week, including Bristol-Myers Squibb's $2.5 billion acquisition of Inhibitex announced Saturday. Still, the full year outlook is decidedly mixed. Law firm Wachtell, Lipton, Rosen & Katz, one of the top advisors to corporate boards, for example, forecast "a growing sense of optimism about further recovery in the M&A market" in its 2012 M&A outlook released Monday. The law firm said U.S. companies are poised to make more deals after several years of retrenchment following the financial crisis.
RGL Forensics: Energy, Metals, Mining and Telecommunications Industries Lead Growth in U.S. Mergers and Acquisitions Market in 2011: Mergers and acquisitions in the U.S. have been on the rise since 2010, and RGL Forensics' valuation and corporate finance group believes that 2012 will likely be another solid year for deals.
Wall Street Journal: Stark Choice for Lawyers— Firms Must Merge or Die: A least 60 mergers occurred in the U.S. and abroad last year, the highest level since 2008 and a 54% jump from 2010, according to legal-industry consulting firm Altman Weil Inc. Industry experts expect the figure to rise this year.