So far, 2017 isn’t quite the year many deal forecasters were expecting. But at the midway point, it looks on track for a finish that won’t leave dealmakers gritting their teeth.
A deals market that had a bullish start in 2017 — anticipating what a new, business-friendly government administration might do — has calmed along with the stock market. But deal volumes are up over 2016, suggesting the fundamentals are in good shape.
Businesses appear to be giving a vote of confidence to an economy growing steadily, if not spectacularly. They’re still striking deals and taking long-term opportunities. They’re getting on with growth and likely won’t be knocked off their stride by turbulence in Washington. Indeed, the early thoughts of “we’ll see what happens” with new policies and regulations may be giving way to “we’ll believe it when we see it.”
Money is still cheap and plentiful, with private equity firms and corporate balance sheets having plenty of dry powder at their disposal. And the intervals between rate rises might well be longer than seemed likely at the start of the year. Boards might also want to signal strength to shareholders with an acquisition.
So what can we expect for the rest of the year? Let's explore some key findings.
Based in part on performance to date and the lack of significant disruption so far in 2017, we see the deals market likely holding steady for the rest of the year. Activity has broadly mirrored 2016 so far, and it will take a large, unexpected development to blow it off course for the rest of the year.
Although volume so far outstrips last year by 12%, we should remember that M&A surged late in 2016 in the wake of the US presidential election. There’s no such pent-up demand this year, so volume could finish roughly in line with last year.
Read the full report for more insights and analysis.