Mid-market businesses have growing interest in M&A in 2016

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Mid-market businesses are “significantly more inclined” to engage in mergers and acquisitions (M&A) in 2016 than previously, a new study has found.

Some 53 per cent of mid-market business leaders are certain or likely to pursue M&A or external growth this year, Capstone Strategic’s State of Middle Market M&A 2015 found.

The most likely reasons for pursuing M&A were in order to gain access to new markets (49 per cent) and to increase share in existing markets (35 per cent).

Read more: M&A dealmakers aren't very good at not losing data

The 53 per cent is up from 41 per cent when the same survey asked about M&A plans in 2014.

Between the same periods, those surveyed who said they were certain their company would pursue M&A activity grew from 19 per cent to 24 per cent.

And those who said they were more than 50 per cent likely to do so grew from 22 per cent to 29 per cent.

US-based Capstone surveyed 55 business leaders - chief executives, owners or C-level executives - working across 36 industries for the study. Company revenues ranged from $5m to $500m.

The business leaders were also asked what they thought the greatest barriers to 2016 M&A activity and external growth were, with a third of respondents pointing to a lack of resources.

Read more: Here's why 2015 has been such a bumper year for M&

Some 58 per cent of respondents reported modest growth in M&A in their sector in 2015. This was down from 64 per cent in 2014.

But 36 per cent said the environment for growth was improving - compared with 32 per cent in 2014.

A third of respondents reported more activity in their field in 2015 than in 2014, compared with 24 per cent who said there was less activity.

The most common type of M&A activity reported in 2015 was consolidation (62 per cent) and strategic alliances and joint ventures (26 per cent).

Full story: Mid-market businesses have growing interest in M&A in 2016: City A.M.

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