SOURCE: Sutton Place Strategies

Sutton Place Strategies

March 19, 2015 09:27 ET

Sutton Place Strategies Releases Proprietary Data on 2014 Participants in the Highly Fragmented North American M&A Market

Following Heavy Competition for Deals and Mandates in 2014, Buyers, Bankers and Legal Advisors Face New Business Challenges in 2015

NEW YORK, NY--(Marketwired - Mar 19, 2015) -  It's no secret that competition for deals and new business mandates in the M&A market in North America was intense in 2014, but the latest proprietary data from Sutton Place Strategies, LLC demonstrate the impact of that trend on thousands of financial and strategic buyers as well as financial and legal advisors searching for deals and deal mandates in a lucrative but highly fragmented environment. 

"While much of the media focus on the M&A market is on a small number of large buyers doing megadeals, as well as the top tier investment banks and law firms that advise them, the reality for most deals done -- particularly in the middle market -- is very different," said SPS CEO Nadim Malik. "While there is certainly concentration among the most active players in each category, equally as compelling is the fragmentation of the M&A market overall, and the challenge and opportunity it presents to win new business opportunities through effective business development strategies."

Malik added, "Whether you are a private equity firm or a corporate acquirer looking for good deals at the right price, or an investment bank or broker looking for deal mandates, or a law firm looking to expand its M&A practice, the question you need to ask now is: 'Based on our strategy, who are the most relevant people that should be on our calling list this year?'"

1. Let's start with a look at the financial advisors:

  • Activity in this segment is much more diffuse than expected, with 814 firms having completed at least one deal in 2014.
  • There is a concentration of activity at the top, with almost 30% of transactions represented by the top 20 investment banks, and a long tail of boutique advisors on the other end of the spectrum, with 581 firms completing between one and three deals in the year.
  • Given those numbers, it's no wonder an effective deal sourcing strategy is so critical to success.

2. Moving on to buyers:

  • Over 4,400 different firms made an acquisition in 2014.
  • While 71% were strategic buyers and 29% financial, 16 of the 20 most active acquirers were private equity firms.
  • With more than 60% of the acquisitions being valued at less than $50 million, the lower end of the middle market, competition in this less transparent segment is increasing.

3. Finally, taking a look at legal advisors:

  • 584 different firms worked on at least one M&A transaction in 2014.
  • However, similar to investment bank fragmentation, 70% did three deals or less last year.
  • Middle market law firms that take a more strategic and focused approach to new business development can win market share when compared to less proactive law firms.

To download Sutton Place Strategies 2014 league tables, please click here.

About Sutton Place Strategies, LLC
Founded in 2009, Sutton Place Strategies is dedicated to helping investors, corporate buyers, lenders and advisors serving the North American M&A market maximize their business development effectiveness. The firm's core service is Deal Origination Analytics™, a subscription-based information service consisting of a customized report package designed to quantify the addressable universe of a client's transaction target market, measure market penetration, and serve as a road map to increase the effectiveness of a firm's internal business development efforts. The reports are backed by proprietary data tracked on a primary basis by Sutton Place Strategies since May 2009.

All reports, tables, charts, statistics, etc. in this release or downloadable from the company's Website remain the intellectual property of Sutton Place Strategies. Sutton Place Strategies grants all users a limited, personal, non-exclusive, non-transferable, revocable license to access, display, and use such reports and downloadable content for non-commercial purposes only. Any republication of Sutton Place Strategies reports or downloadable content must include proper citation to Sutton Place Strategies or be explicitly approved in writing by Sutton Place Strategies authorized personnel prior to republication. All rights not specifically granted herein shall be reserved to Sutton Place Strategies.
Sutton Place Strategies' analysis and reports have been prepared for informational and marketing purposes only and are not intended to be used as a complete source of information on any particular company or trend in the industry. SPS accepts no liability in contract, negligence or otherwise for any error or omission in the information, data, or analysis provided by SPS. SPS does not make any representations, warranties or covenants of any kind, express or implied, and shall have no responsibility or liability for the business or other decisions based upon the use of SPS's reports or the results obtained from the use of information and reports provided by SPS, or the analysis or interpretation of content or data used in connection with, resulting from or derived from the use of information or reports provided by SPS.

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