Citizens Middle Market M&A Outlook Predicts More Robust Deal-making Environment in 2017
December 07 2016 - 8:00AM
Business Wire
Survey of business leaders shows half would
consider selling in 2017
The number of mid-sized U.S. companies already engaged in or
open to buying and selling has risen sharply since last year,
setting the stage for a very active 2017 merger market, according
to the sixth annual Citizens Commercial Banking Middle Market
M&A Outlook. The survey of 600 business leaders shows a
significant increase in the level of interest among both buyers and
sellers compared to 2016.
“It’s looking like 2017 is going to be an active year for
M&A, with our survey showing a significant increase in the
number of companies interested in selling,” said Bob Rubino,
executive vice president and head of Corporate Finance and Capital
Markets at Citizens Commercial Banking. “We’re seeing more owner
fatigue or concern about the future in companies coupled with a
buyer pool that is hungry for acquisitions.”
Continued Rubino: “We’re also closely watching the impact on
markets of the U.S. election, which survey respondents had
downplayed as a potential issue, but which may have unexpected
consequences. In the short term, I think potential buyers and
sellers are in a wait-and-see period as the election has been
followed by a run-up in valuations and confidence.”
The Citizens study examines the annual appetite for mergers and
acquisitions among middle market companies – companies with annual
revenue between $5 million and $2 billion – that are key creators
of jobs and drivers of economic activity in the United States.
Citizens Commercial Banking serves thousands of middle market
clients in a wide range of industries across the country.
This year’s survey suggests that sellers are looking to get off
the fence with 53 percent either currently involved in or open to
considering a deal, compared to 34 percent last year. Demand from
buyers is also increasing with 73 percent currently involved in or
open to considering deals, up from 60 percent last year.
“We’re seeing sellers looking for exits and an uptick in buyers
seeking growth,” Rubino said. “This should point to a more robust
M&A environment in 2017, though there may be a pause until the
impact of the election becomes clearer. Since the election, the
potential lowering of capital gains and estate taxes, as well as
hints of a less restrictive regulatory environment and future
stimulus spending have led to a rise in U.S. equity markets in
anticipation of accelerated economic growth. There is a sense among
some mid-market decision makers that company valuations may not
have peaked just yet and that could affect the M&A
environment.”
Citizens Commercial Banking’s Middle Market M&A Outlook
provides insight into the behaviors, attitudes and perceptions of
business owners and CEOs as they consider their corporate
development strategies for the year ahead. Other key findings from
this year’s survey include:
- Among middle market firms, 21 percent
are currently involved in an acquisition and another 52 percent are
open to considering one.
- Thirty percent of upper middle market
potential buyers say they are more confident today than they have
been in the past that growth through outside investment is an
appropriate strategy with 23 percent confident their company will
make an acquisition in the next year.
- Top concerns among buyers are inherited
liability, integrating corporate cultures and overpaying for an
acquisition.
- Fifty-eight percent of upper middle
market potential sellers fear a significant financial crisis in the
next three years, up from 41 percent last year.
- Ninety percent of buyers and sellers in
the middle market, up about 13 percent, say they need third-party
advisors such as commercial bankers for a range of M&A services
such as valuation, opportunity assessment, due diligence, strategy
and financing.
Citizens aims to be a go-to strategic and financial partner by
offering unrivaled industry expertise, great ideas and seamless
deal execution. The Citizens Commercial Banking approach puts
clients first, and offers solutions that help clients make the best
decisions throughout the life cycle of their business.
Citizens Commercial Banking is the commercial banking division
of Providence, R.I.-based Citizens Financial Group. For more
information, please visit the Citizens Commercial Banking website.
For a copy of this year’s survey, please go to Middle Market
M&A Outlook 2017.
Survey Methodology
In late 2016, Citizens Commercial Banking conducted a survey of
600 U.S.-based middle market business decision-makers who are open
to or currently engaged in some form of corporate development
activity, including mergers, acquisitions and raising capital. For
the purposes of this survey, middle market businesses are defined
as private or public companies with annual revenue between $5
million and $2 billion.
About Citizens Financial Group,
Inc.Citizens Financial Group, Inc. is one of the
nation’s oldest and largest financial institutions, with $147
billion in assets as of September 30, 2016. 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. In Consumer Banking, Citizens helps its retail
customers “bank better” with mobile and online banking, a 24/7
customer contact center and the convenience of approximately 3,200
ATMs and approximately 1,200 Citizens Bank branches in 11 states in
the New England, Mid-Atlantic and Midwest regions. Citizens also
provides wealth management, mortgage lending, auto lending, student
lending and commercial banking services in select markets
nationwide. 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 and M&A advisory, treasury services, foreign
exchange and interest hedging, leasing and asset finance, specialty
finance and trade finance.
Citizens operates through its subsidiaries Citizens Bank, N.A.,
and Citizens Bank of Pennsylvania as Citizens Bank, Citizens
Commercial Banking and Citizens One. Additional information about
Citizens and its full line of products and services can be found at
www.citizensbank.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20161207005217/en/
Citizens Financial Group, Inc.Frank Quaratiello,
617-725-5851frank.quaratiello@citizensbank.com
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