Amid reports that senior housing deals hit a new low in the third quarter, most senior executives are optimistic about a pick-up in merger and acquisition activity over the next year. That’s according to a survey by national law firm Dykema of 225 executives and M&A advisers from the healthcare, retail and technology sector, among others.
Findings showed that 71% of respondents expect the M&A market to strengthen over the next 12 months, up from 33% in 2019. In addition, 87% believe M&A activity will increase in the same time frame. The rise in optimism reflects market conditions and a belief from respondents that the worst is behind them, with both financial and strategic buyers seeing opportunity in a hobbled economy. Further, 60% of respondents said their outlook for the U.S. economy is positive over the next 12 months.
Respondents predicted that the automotive sector would see the most M&A activity over the next 12 months, followed by healthcare, technology, consumer products and financial services.
Despite their optimism, deal-makers agreed about several looming issues. Almost two-thirds (63%) of respondents ranked COVID-19 among the three greatest threats; Democrat wins in the presidency (48%) and Congress (46%) followed in second and third place among top concerns.
“It is no surprise that a Donald Trump reelection and Republican-controlled Congress would be viewed positively by deal-makers from an M&A perspective,” said Jeff Gifford, leader of Dykema’s Corporate Finance Practice Group. “The past four years under the Trump administration have been largely positive for M&A activity, and this year’s survey results signal deal-makers’ hope for a continuation of the deal-friendly business environment and policies – principally tax policies – to which they’ve become accustomed.”
