Listen in on a group of m&a advisors at a round table discussion and you would never know based on the boisterous conversation that the space is experiencing a stubborn slow down in mergers and acquisitions deals. The economic uncertainty of how many skeletons are in the closet is to blame.
According to Thomson Reuters investment banking fees ending September 2011 for the quarter were $16.2 billion the lowest level since the doldrums of the financial crisis in 2009. Total fees collected dropped by 36% in the third quarter, amid global economic uncertainty. Mergers and acquisitions, are down 23%. Worse fees collected from equity and debt capital raising services skidded by a whopping 55% and 46% respectively.
“Volumes of global M&A activity dropped almost 20% in August compared to July…” Dirk Pahlke, responsible for Rothschild’s German M&A advisory told Dow Jones Newswires, saying current market conditions point to subdued activity in coming months. via M&A activity seen subdued till year-end – MarketWatch.
Merger-and-acquisition activity involving venture-backed Massachusetts companies is down 15 percent so far this year compared to 2010, according to data from Dow Jones VentureSource. via Venture-backed M&A activity down 15% in Mass. – Boston Business Journal.
According to global deal tracking firm Dealogic, the value of third quarter M&A deals stood at just US$633.3 billion, down 19 per cent compared to US$783.5 billion in the corresponding period last year, which is also the lowest quarterly total since the second quarter of 2010. via Global M&A deals in Q3 down 19%.
A more rudimentary measure, but indicative of the declining trend, is the review of press releases and completed transactions found on dozens of m&a firm’s websites clearly showing twenty to fifty percent declines in mergers and acquisitions in 2011 when compared to 2010.