PwC: Fundamentals are Strong for U.S. Mergers & Acquisitions Activity

By Rob Starr, Content Manager, Big4.com

According to PwC’s U.S. M&A outlook, dealmakers remain hyper vigilant on diligence during the M&A decision making process, analyzing each outcome and the various impacts on investment and return scenarios to achieve certainty of deal success.

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 $1.1 trillion for the S&P 500, indicating continued opportunity for companies to put their capital to work through M&A.  In the eleven months ending November 2012, there were a total of 7,585 transactions representing $705 billion in disclosed deal value.

“Both corporate and private equity players are thinking about transactions to expand market share, build brands and fuel their long term strategic plans. In today’s environment, companies must be agile to act with discipline, speed, and unbiased thoroughness to execute when a good potential acquisition comes to market,” said John Potter, Deals partner at PwC. “A recent poll during our M&A integration webcast found that 89 percent of executives expect to see similar or increased M&A activity over the next year, with 45 percent expected to plan a deal within the next six months. Deal making, whether by acquisition or divestiture, is very much at the top of the agenda for those pursuing new growth opportunities in 2013.”