collateral the industry in brief
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Strategic Deals and “Mergers of
Productivity” to Drive M&A in 2010
Mergers and acquisitions (M&A) activity
is expected to pick up in 2010, according to PricewaterhouseCoopers’ (PwC)
Transaction Services practice. While
credit markets are easing for some
participants, financing will remain the
dominant challenge to M&A activity
in 2010, increasing the pressure on
middle-market deals. Strategic buyers
with strong balance sheets and robust
cash reserves will be well-positioned for
strategic M&A opportunities. As these
strategic buyers take advantage of their
ability to maneuver in the face of a challenging deal environment, PwC predicts
they will pursue deals with a focus on
synergies — including enhancing productivity, providing cost-savings and adding
revenue volume to their businesses.
“Those who have built their balance
sheets for a rainy day might come out
of last year’s storm to find the rain-
bow and, at the end of it, nicely valued
acquisition targets that provide op-
portunities for revenue growth and
enhanced productivity,” said Bob Filek,
Partner with PricewaterhouseCoopers
Transaction Services. “As a result,
M&A activity in 2010 will be driven
by strategic buyers who have access
to capital and the strategic vision to
capitalize on some of the best values
we have seen in recent times.”
“Companies have taken aggressive
actions on costs; the low-hanging fruit
is gone and, to drive further efficiency,
they will look to combine with similar
players to drive scale and enhance
productivity. The ‘merger of produc-
tivity’ will be a driving force in 2010
as companies look to drive revenue
growth and enhance margins,” contin-
ued Filek.
Through the first eleven months of
2009, there were 6,772 deals worth a
total of $614 billion, compared with
8,890 transactions worth a total of $1
trillion during the same period last
year, according to financial data pro-
vider Thomson Reuters.
