SOURCE: IMAP

IMAP

April 05, 2010 09:30 ET

IMAP'S Global Transaction and Pricing Survey Recaps 2009 M&A Activity and Predicts Remainder of 2010

Industrials Sector Had the Most Transactions in 2009

Transaction Multiples Peaked in Second Quarter 2009

IMAP Advisors Expect Higher Values and Improved Access to Bank Financing in 2010

SARASOTA, FL--(Marketwire - April 5, 2010) -  IMAP, an exclusive global organization of leading merger and acquisition (M&A) advisory firms, announced today the results of its 2009 Global Transaction and Pricing Survey, which provides insight into the current state of the M&A market. The survey offers perspective from IMAP's more than 500 advisors at 45 offices in nearly 30 countries, on transaction activity in 2009, as well as market expectations for the remainder of 2010. In 2009, IMAP completed a total of 179 transactions for a total value of $6 billion.

"Through our global access and intimate knowledge of local markets, IMAP is uniquely qualified to provide an inside look at the type of activity and factors affecting the completion of M&A transactions," said Mark Esbeck, IMAP President. "This survey, which is the 16th consecutive annual survey completed by IMAP, provides a distinctive global perspective on the M&A market, while offering businesses and advisors valuable information when considering M&A transactions throughout the world."

The global economic crisis that began in the fourth quarter of 2008 had a significantly negative impact on M&A markets throughout 2009 by inhibiting financing and impairing business valuations. But by the middle of 2009, the number of transactions closing began to rise sharply. By fourth quarter, closings leveled off, but didn't drop, which happened in the two previous years. IMAP advisors believe the numbers are a strong indication that M&A is on the comeback trail. 

The following are some notable results from 2009:

  • The industries that saw the most M&A activity varied by region in 2009:
    • Asia saw the most activity in real estate, industrials, high technology, and healthcare. 
    • Latin America saw the most activity in financials, industrials, and energy and power. 
    • The U.S. and Canada saw the most activity in healthcare, energy and power, and industrials.
    • Europe saw the most activity in consumer products and services, and energy and power.
  • North America had the largest average transaction size of $83.2 million, followed by Latin America with $23.5 million, and Asia with $22.9 million. Europe had the lowest average transaction size with $12.1 million. 
  • Transaction multiples ranged from a low of 2.9 x EBIT to a high of 11.0 x EBIT. Retail-sector transactions saw the highest multiples on average at 7.7 x EBIT, followed by real estate at 6.9 x EBIT and financials at 6.7 x EBIT.
  • In all regions, M&A transactions were aided by attractive valuations, financial pressures, flexible acquisition terms and cheaper-to-buy-than-build rationale. Conversely, transactions were mostly impeded by a lack of available funding and unattractive valuations.

Key predictions for 2010 from IMAP advisors include:

  • Nearly 80 percent of IMAP advisors anticipate more buyers and sellers in 2010 than in 2009.
  • IMAP advisors predict that transaction valuations will stop their decline, and nearly half expect transaction pricing to rise, particularly in Asia and Latin America. 
  • About half of IMAP advisors expect improved access to bank financing.
  • IMAP advisors forecast industry consolidation or changes to drive M&A activity, as well as companies' need for funding to continue and expand their business.
  • For industries that will experience the most M&A activity:
    • IMAP advisors predict that energy and power, consumer products and services, industrials, and healthcare will see the strongest activity in 2010.
    • Latin American IMAP advisors also see strong potential activity for financials, as the industry continues to go through consolidation.

To view or download the complete IMAP Global Transaction and Pricing Survey, please visit IMAP's Web site: http://www.imap.com/imap/media/article_documents/2009_Transaction__Pricing_Surveylow_
78CFC941C7E86.pdf
.

About IMAP
IMAP is an exclusive global organization of leading merger and acquisition advisory firms. Formed in 1973, IMAP is composed of 45 offices in nearly 30 countries throughout North and South America, Eastern and Western Europe, Australia and Asia. In 2008, IMAP advisors completed 252 transactions, with an aggregate transaction value of more than $13 billion. IMAP advisors provide strategic merger, acquisition, divestiture and related corporate finance services. Sellers of mid-size companies and corporate acquirers alike rely upon IMAP for essential local market knowledge and industry expertise delivered with unparalleled global reach. Every business day, somewhere in the world, an IMAP advisor is completing an M&A transaction. More information is available via the Internet at www.imap.com.

To arrange an interview regarding IMAP's Global Transaction and Pricing Survey, or if you are interested in receiving expert commentary from a member of IMAP's global network of advisors, please contact the following:

Contact Information