2018 continued to generate a robust level of M&A activity in North America and Europe with over 15 thousand transactions completed through September representing over $2.4 trillion of deal value, according to Pitchbook, while valuation multiples rose slightly and remain above 9.0x. In addition, US private equity firms raised $121 billion for investment and corporate balance sheets remain strong with ample liquidity to pursue M&A, partially due to tax reform.
Axial's Middle Market Review asked readers what their M&A expectations are for 2019. Survey respondents believe M&A activity in 2019 will grow, based on: (i) the booming economy; (ii) baby boomers' need to sell businesses; (iii) expanding GDP; and (iv) a lower barrier to growth given the more favorable business environment promoted by the Trump administration. Although the M&A outlook for 2019 is robust, there is worry about rising interest rates, global economic uncertainty and stock market volatility.
As we close out 2018 and begin 2019, M&A activity and competition looks to remain strong as private equity firms continue to raise significant amounts of capital, corporations continue to pursue grow through M&A, and access to credit remains relatively cheap. For more information on the outlook for 2019 and M&A trends, please contact a member of UHY's Corporate Finance practice at 313 964-1040.