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M&A Outlook for 2013


Most investment bankers are expecting more sell side activity in 2013.

  1. There is a pent-up supply of firms that have been waiting for an improving economy. The most profitable companies stand out from the others, and can command the best multiples.
  2. Certain industry sectors or markets, such as internet advertisers and medical products, are performing well. These companies and others with at least two years of strong financials and growth will be prime sell side candidates this year.
  3. The tax landscape is set, albeit less favorable to sellers than in prior years. The prevailing point is that we now know the capital gains rate for sales of stock.
  4. The recent increased activity in real estate /construction industries portends well for an improving economy. Since the length of time to close a sale has elongated by at least three to six months, now is still a good time to start the process.
  5. Finally, the availability of mezzanine debt has positively impacted the ability to close a deal. Senior lenders are reluctant participants in deals, but there are some glimmers of hope.