Ongoing access to capital and financing, strengthened balance sheets and divestiture activity will continue to fuel deal activity in 2013, according to PwC US. An acceleration of deals taking place during the final months of 2012 may result in a lull in activity during the first quarter; however, these sound deal fundamentals are creating optimism that the balance of 2013 will be a stronger year for U.S. mergers and acquisitions (M&A).
According to PwC’s U.S. M&A outlook, dealmakers remain hyper vigilant on diligence during the M&A decision making process, analyzing each outcome and the various impacts on investment and return scenarios to achieve certainty of deal success.
With capital ready to be deployed, along with the increasing availability of financing, PwC expects companies and financial sponsors to use M&A to enhance their growth prospects in the new year. Corporate cash levels remain steady at $1.1 trillion for the S&P 500, indicating continued opportunity for companies to put their capital to work through M&A. In the 11 months ending November 2012, there were a total of 7,585 transactions representing $705 billion in disclosed deal value. In October alone, deal value spiked to a 14 month high, reaching $96 billion and with 754 deals, October was the most active month since August 2011. In terms of deal size – and with the absence of “transformative” mega deals – middle-market deals have been the