Mergers & Acquisitions 2015: Looking Back and Looking Forward

business-for-sale-11091302We’ve discussed before what the state of the market is for buying and selling businesses. Earlier in the year it was record-breaking fantastic, and buyers and sellers both have confidence that this trend will continue, and specifically that sellers will continue to have opportunities into next year. But what has 2015 as a whole been like, and what can we predict about 2016? Read on to see.

The growth that we saw in deal making in the first quarter of 2015 has continued throughout the year, albeit at a slower rate. During the third quarter of 2015 global growth in mergers and acquisitions slowed to 5.6 percent, down from 9 percent the previous quarter, which experts conclude was primarily due to uncertainty about potential interest rate increases, how they will occur, and when. The devaluation of Chinese currency and the resulting slowed growth of the Chinese economy as well as the meltdown of Chinese equity markets had an effect on the U.S. economy, U.S. equity markets and markets on a global scale. All of these factors make U.S. economic growth harder to predict and have quite possibly dampened confidence and sales of businesses globally and nationally.

None of this has brought growth to a standstill, however. Buyers are still buying and sellers are still selling. The latest Intralinks Deal Flow Predictor report estimates that globally growth in 2015 as a whole will be between 6 to 9 percent higher than in 2014 and may even match 2007 for its record-breaking number of M&A deals. This same Intralinks DFP report also concurs with general sentiment that the deal-making environment of 2015 will continue into 2016. Part of this will depend on the forecasted continued cheap acquisition financing. This is interesting given the disconnect that currently exists between small business buyers and sellers about how financing should factor into any business sale.

By sector, the largest number of deals were made in the following in the third quarter: industrials, consumer products and services, high technology, consumer staples, and healthcare. Healthcare mergers have been in the news all year, of course, as consumers worry about how mergers will affect access and supply in this continually changing market influenced by the Affordable Care Act.

The takeaway for small and medium business owners and potential buyers regarding mergers and acquisitions is that currently the market is still going strong, affordable financing is still available, and 2016 looks to be stable as well. However, interest rate manipulation, further market instability, and a slowdown in the economy could affect this negatively.

If you are thinking seriously about selling your company or investing in a business opportunity, now is a great time to check out your options. Call us today at Calder Capital for our take on what is available in terms of small business locally and regionally.

Calder Capital, LLC

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