2012 should be a strong year for business mergers and acquisitions, according to Denver-based RGL Forensics.
A continuing stabilization of the U.S. economy contributed to M&A growth in 2011 and provides generally positive signs for 2012, RGL said.
Having shored up their balance sheets and lined up low-cost capital, many companies are shifting their focus to looking for growth through acquisition, said Matt Morris, director of corporate advisory services for RGL, an accounting, valuation and corporate finance firm.
Energy, metals & mining and telecommunications were among the top industries for M&A activity in 2011, Morris said, with an emphasis on larger transactions than in the recent past.
While the uptick in activity and market valuations have demonstrated the willingness of capital markets to provide financing, there is an increased focus on a deeper, more nuanced understanding of target companies.
“The good news is that capital continues to be deployed in an economy hungry for investment,” said Morris. “As we’re seeing the credit markets gyrate, debt and equity investors are increasingly concerned with the quality and resourcefulness of front-end analysis and due diligence. Outside experts of all types, forensic accountants, valuation professionals and strategy authorities are being retained to analyze and determine the true value and risk of potential M&A targets.”
