Since 2008, many private equity and hedge funds have raised capital but placed only part of these monies into deals. Thus, there is a pent up demand to acquire for sound, growing businesses. In addition to this abundance of equity is the low cost of debt financing. These factors are only part of the momentum building for middle market and smaller middle market deals.
Other significant drivers for increased M&A are the following:
- Improving employment numbers
- Record public stock prices
- Flattening organic growth of buying firms
- Better year-over-year financials
- Less reluctance to finally sell the family business
- Increased valuations, including IP