SOURCE: The Transition Companies

The Transition Companies

December 07, 2010 10:48 ET

Private Strategic M&A Activity Increases

Middle Market M&A Activity by Private Strategic Acquirers Near Historically High Levels

DALLAS, TX--(Marketwire - December 7, 2010) - The Transition Companies LLC ("TTC") reports merger and acquisition ("M&A") activity on the part of private strategic acquirers is at an all time high. Acquirers of middle-market companies usually consist of public companies, private companies, Private Equity Groups ("PEGs") and foreign buyers. Certain economic, lending and currency metrics typically drive how active each of these types of buyers are acquiring in any given market.

Since the year 2000, private buyers of middle-market companies have averaged 32% of closed transactions with public companies accounting for an average of 39%, PEGs have averaged 15% and foreign buyers 14% of closed transactions. In the last 3 months ("LTM") backward from September 30, 2010 private buyers have accounted for 44.7% of closed transactions with public buyers at 27.6%, PEGs at 11.1% and foreign buyers at 16.5%. These trends signal a shift in the zeitgeist of the buying community as it mediates the influences of the capital markets and the demands of shareholders in order to grow effectively in the competitive contemporary marketplace.

The trends demonstrated by overall M&A industry research regarding types of acquirers is re-enforced with internal data from the transaction roster of The Transition Companies. In the last 6 months of 2010, the spread of closed transactions and those under Letter of Intent and in the closing phase show that 55% of acquirers of TTC clients are private strategic acquirers. Furthermore, PEGs with platform companies in any one industry that subsequently act like private strategic acquirers represent 23% of acquirers in TTC's transaction roster versus 11% for PEGs acquiring standalone portfolio companies.

"Many privately-held companies have come to the realization the only way to grow in this economy is through acquisition," said Mike Ryan, Executive Vice President of TTC. "Organic growth is simply too difficult in these economic conditions forcing growth through acquisition," he added. 

The Transition Companies LLC, headquartered in Dallas, Texas is a leading Mergers and Acquisition ("M&A") firm specializing in confidentially opening the market to maximize the value realized by the owners when selling their privately-held companies. TTC also provides Business Optimization consulting services for companies that want to increase earnings now or increase market value for a future sale. Tracing it roots back to 1988, TTC has offices in Texas, New Jersey, California, Colorado and Ontario, Canada.

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