It has been another banner year for middle market M&A transactions, driven largely by a perception of topped out valuations and concerns about the inevitable uptick in historically low interest rates. Halfway through 2017, mid-market Buyers and Sellers are feeling a greater sense of urgency to close deals as many sellers believe the market has reached a peak and valuations won’t hold.
However, early indications are that the reality may be somewhat different. A potential lowering of capital gains and estate taxes, as well as hints of a less restrictive regulatory environment and future stimulus spending, have led to a cautious optimism regarding potential economic growth. As a result, there is now a growing sense among some mid-market decision makers that company valuations may not have peaked just yet.
Given the degree of economic uncertainty in 2017 third party advisors will play an imperative role in M&A activity. Buyers and sellers are increasingly cognizant of how finance and banking professionals can optimize stakeholder value regardless of the macro environment and will continue to benefit from their guidance in managing valuations, performing due diligence and optimizing investment terms.