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Middle-market M&A activity: is the worst behind us?

The US has not been able to escape the decline that has affected all areas of the global financial markets. Indeed, the middle-market M&A sector has been considerably damaged. Nevertheless, as Fleet Capital argues, the future should afford investors a cautious optimism as markets will return to a healthy and sustainable level.

The number of transactions seen in the first quarter of 2002 was the lowest since 1994 as buyers have found it increasingly difficult to meet sellers' expectations given the state of the capital markets and their own expectations for return on their investment. But it's not all doom and gloom. A decline in purchase price multiples, the prospect of a more robust financing environment and the surplus of uninvested funds managed by private equity sponsors are, the authors argue, reasons for optimism.

Copyright © 2002 Fleet Capital

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This article was originally published on AltAssets through Fleet Capital. As a result of the merger of FleetBoston - the parent company of Fleet Capital - and Bank of America in 2004, Fleet Capital is now Bank of America Business Capital

Bank of America Business Capital, one of the world’s leading asset-based lenders, finances the needs of mid and large-sized businesses in the U.S, Canada and Europe. They provide asset-based loans from $10 million to $1 billion for working capital, acquisitions, turnarounds, recapitalization and DIP financing. For more information please visit www.bofabusinesscapital.com