Annual survey finds more confidence in the economy, fewer companies looking for deals
PROVIDENCE, R.I.--(BUSINESS WIRE)-- Business leaders surveyed by Citizens Commercial Banking are feeling less urgency to engage in mergers and acquisitions, but sellers with standout businesses can still expect a relatively strong year.
Survey respondents see companies relying more on organic growth, fewer sellers in the queue and continued discipline among buyers in 2020. Expect lower deal volumes, more strategic carve-outs and bolt-ons, and stable-to-higher valuations, according to the survey of nearly 600 executives.
“The prevailing sense is that the backdrop is favorable, but the urgency to get deals done has ticked downward,” said Ralph M. Della Ratta, who is based in Cleveland and co-leads M&A advisory at Citizens Capital Markets with Atlanta-based Jim Childs. “In this environment, mid-market leaders are approaching M&A with measure and restraint. The financing backdrop definitely facilitated the M&A market through 2019, and we see more of the same for the year ahead, especially with historically low interest rates.”
“We believe the survey data suggests continued strength in the M&A market,” added Childs. “However, the need for buyer discipline in terms of valuations and deal terms remains as high as ever, which could prevent 2020 statistics from eclipsing prior years’ peaks.”
There was a significant drop in the pool of likely sellers heading into 2020, down 16 percent from a year ago, as just 44 percent of mid-market companies appear to be engaged in or open to a sale – the lowest reading since 2017. Only about 55 percent of mid-market leaders consider themselves active buyers – 16 percent fewer than a year ago.
Other key findings of Citizens Commercial Banking’s ninth annual Middle Market M&A Outlook include:
The Middle Market M&A Outlook was fielded in November and December 2019 to C-suite executives at U.S. companies with annual revenue from $50 million to $3 billion. For more information on this year’s M&A Outlook, please go to Middle Market M&A Outlook 2020.
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For more information, please visit the Citizens Commercial Banking website.
About Citizens Financial Group, Inc. Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $165.7 billion in assets as of December 31, 2019. Headquartered in Providence, Rhode Island, Citizens offers a broad range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions. Citizens helps its customers reach their potential by listening to them and by understanding their needs in order to offer tailored advice, ideas and solutions. In Consumer Banking, Citizens provides an integrated experience that includes mobile and online banking, a 24/7 customer contact center and the convenience of approximately 2,700 ATMs and approximately 1,100 branches in 11 states in the New England, Mid-Atlantic and Midwest regions. Consumer Banking products and services include a full range of banking, lending, savings, wealth management and small business offerings. In Commercial Banking, Citizens offers corporate, institutional and not-for-profit clients a full range of wholesale banking products and services, including lending and deposits, capital markets, treasury services, foreign exchange and interest rate products, and asset finance. More information is available at www.citizensbank.com or visit us on Twitter, LinkedIn or Facebook.
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Frank Quaratiellofrank.quaratiello@citizensbank.com 617.725.5851
Source: Citizens Financial Group, Inc.