Baird report shows greatly improved M&A marketplace

Global, U.S. and middle markets all greatly improved over last year

In its March Global M&A Monthly report, Milwaukee-based Robert W. Baird & Co. reports a greatly improved mergers and acquisition marketplace from one year ago, both around the globe and in the U.S.

In February, global activity rose 3.8 percent on the transaction side, and 211 percent on the dollar value side – fueled by large transactions around the world.

M&A activity rose in the U.S. as well, increasing more than 31 percent in February from one year earlier. The dollar value for U.S.-based transactions grew by 544 percent from one year ago to $107 billion.

“For the year-to-date period, there was a total of 1,694 announced U.S. M&A transactions, representing a 20.6 percent increase from the year ago period,” the report states. “Dollar volume gained 12.4 percent to $147.5 billion.”

The middle market within the U.S. saw larger gains in the volume of transactions closed in February, while total amount of money changing hands rose less than the total U.S. and global markets.

In February, there was a 78 percent increase in the number of deals closed from one year earlier, while dollar volume within the middle market rose 75 percent to $20.8 billion.

“The upturn in M&A has aligned with a more positive tone for economic news in the U.S.,” the Baird report states. “The Institute for Supply Management’s index of national factory activity indicated manufacturing sector expansion for the seventh straight month in February despite dipping from January’s five-year high.The M&A revival can also be attributed to ongoing in the credit markets. A robust market for leveraged loans, fueled by an uptick in activity amongst public companies and financial sponsors, is evident in the return of borrower-friendly terms and increasing leverage ratios. Broader bank lending remains restricted, particularly for smaller companies, which again noted more difficulty in obtaining credit in the February survey of the National Federation of Independent Business. However, the percentage of firms reporting incremental tightening decreased from the prior month, joining the Federal Reserve’s quarterly surveys of senior loan officers in potentially signaling stability for commercial lending later in 2010.”

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