Dykema Survey: Private Companies to Lead M&A Activity in 2015


Nearly 60 percent of industry advisers and executives surveyed believe that mergers and acquisitions activity will be stronger in 2015 and will be led by private companies, says a new report released by Dykema, a national law firm with offices in Detroit.

“The biggest surprise in the survey, for me, was that 82 percent of our respondents believe there will be an increase in M&A activity involving privately owned businesses next year,” says Tom Vaughn, a lawyer with Dykema in Detroit. “We’ve been waiting for the privately owned businesses to come into the market and become sellers. It’s something that the marketplace has not seen as much of as we have expected.”

Mergers in private companies will likely be encouraged by high valuations, Vaughn says. “Aging baby boomers who’ve been sitting on their companies for many years are starting to believe that valuations are getting up to their highest level. Waiting longer to sell may not get them any higher valuation.”

Overall, the survey, conducted in September with individuals working in 13 different sectors, including automotive, technology, and financial services, found that respondents shared an optimistic, but cautious outlook regarding the U.S. economy and the M&A market in the coming year.

The firm reported that 62 percent of respondents were positive about the national economy, while 59 percent believe the M&A market will be stronger next year. Additionally, an overwhelming number of those surveyed said they feel that health care would fuel most of the M&A activity in 2015 — rather than technology, as surveyors predicted in 2005.

Of those who took part in the recent survey, 43 percent say increased availability of capital is fueling M&A activity.

“The outlook of the respondents was more bullish than a year ago on both the U.S. M&A market and the economy,” Vaughn says. “I think people were more hesitant (last year).”

He says, last year, market stakeholders were still unsure whether the economy had the legs to continue growing. This year, those lingering concerns seemed to dissipate as confidence in the economy and the market improved.

To read the full report, click here.