M&A Will Likely Pick Up in New Year

M&A Will Likely Pick Up in New Year

An Ernst & Young survey indicates longer term appetite for deals has increased, reports Anthony Noto at Mergers & Acquisitions.

Private equity firms are more confident in the worldwide economy, suggesting an increase in M&A activity for the New Year, according to a report Ernst & Young released Wednesday.

In the longer term, the appetite for M&A increases as companies are less likely to feel inhibited by the volatile economy and political unrest in Washington DC, the survey said, with 68 percent of larger cap respondents believing credit availability is either stable or positive.

Robust cash positions, strong balance sheets and improved credit markets, coupled with less organic growth, are each cited as indicators that more deals will be announced over the course of next year.

Throughout 2011, private equity activity decreased 19% in value to $138.1 billion, while the number of deals declined 1 percent, at 914 deals, according to Dealogic data as of November 30.