Time to dust off the crystal ball… All indications are that 2017 will be a tremendously active year in M&A    There are many reason for this, here are some of the top reasons why the outlook is rosy for M&A in the lower middle market (companies with $5MM to 100MM in revenue) and middle market (100MM to 500MM).

• Sellers want to capitalize on historically high valuations - 53% of business owners and CEO’s are open to making a deal in 2017 (up from 34% in 2016) (1)

• Buyers looking for smaller strategic bolt-on deals – 34% of mid-market companies will look to make smaller strategic acquisitions as a bolt-on to their business operations (up from 26% in 2015). ⁽²⁾
  

• Buyers are actively pursuing - 73% of buyers have indicated that they are currently involved in or would consider acquiring a business to grow (up from 60% in 2016) (1)

• Window of opportunity is closing – Many studies have indicated that M&A activity is cyclical and transaction volumes have followed a succession of high and low points (waves) for over a century.   These waves range from a duration of 7 years to 20 years.  The average is 11 years and it is believed the present wave started in 2009.  If that is the case, we may toward the end of the present wave. ⁽³⁾

• Private Equity has record cash on hand -  Private Equity Firms are sitting on a record $1.3 Trillion in un-invested capital.  The expectation is that they will increase completed transactions globally in 2017.