PwC US notes that an acceleration of deals taking place during the final months of 2012 that may result in a lull in activity during the first quarter.
The consultancy goes on to point out that these sound deal fundamentals are creating optimism that the balance of 2013 will be a stronger year for US mergers and acquisitions (M&A).
According to PwC’s US M&A outlook, dealmakers remain “hyper vigilant” on diligence during the M&A decision making process, analysing each outcome and the various impacts on investment and return scenarios to achieve certainty of deal success.
“The fundamentals for sustained M&A activity in 2013 are solid, with improving corporate confidence, increasing private equity activity from both a buy and sell side perspective, and relatively healthy debt markets,” said Martyn Curragh, PwC’s US deals leader.
“We’ve been supporting a range of buyers and sellers across a broad spectrum of industries, helping them raise capital through high yield offerings and providing diligence and valuation analyses for potential deals.
Dealmakers have been very cautious and disciplined in evaluating transactions. They are placing a premium on a thorough analysis of potential risks and exposures and are seeking to ensure there is broad functional support to manage deal execution and reduce the risk of value leakage.”
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 $1.1tn 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, PwC noted that there were a total of 7,585 transactions representing $705bn in disclosed deal value. In October alone, deal value spiked to a 14 month high, reaching $96bn and with 754 deals, October was the most active month since August 2011.
