M&A market ends 2009 on high note, points to continued recovery in 2010

According to the December report on the global mergers and acquisitions industry released by Milwaukee-based Robert W. Baird & Co., the U.S. M&A market has declined about 21.6 percent in 2009. However, the decline slowed to just 2.2 percent in November, compared to November of 2008.
Trends in the middle market continue to show more signs of promise. The middle market is down about 13 percent for 2009 – but deal volume increased by 21.5 percent in November, according to the Baird report.
“Middle-market dollar volume for November experienced an increase of 126 percent, supported by an uptick in the number of announced deals in the $100 million to $1 billion range,” the report says.
A report recently released by Chicago-based William Blair & Co. points to similar positive trends in the buyout industry.
“The global total disclosed dollar volume for the month was $232.9 billion, a gain of 154 percent compared with the corresponding period last year,” the Blair report says. “This was the highest monthly dollar volume total since July 2008 and has now exceeded $200 billion in two of the past three months (averaging $195 billion) after averaging just $150 billion for the first eight months.”
U.S. based dollar volume rose to $98.7 billion in November, a 51 percent increase from the monthly average of $65.5 billion for most of 2009.
“This significant year-end momentum has continued in the first half of December and
should carry over into the at least the first half of 2010,” the report states.
Baird’s report agrees, but cautions that the financial community needs to proceed with caution.
“The recession that has held sway since late 2007 has loosened its grip, and economic conditions have become more favorable. However, now that the markets are functioning on a more orderly basis it is important to not make the mistake of believing that the crisis has passed and the normal that we once counted on will soon re-emerge.”