13 October 2009

The current economic climate continues to impact the U.S. deal market, but signs of promise for bullish buyers exist, according to our M&A Executive Insights 2009 survey.

Other key findings include:

• Mid-market deals under $250 million are expected to dominate over the next 12 months, with the industrial and financial services segments most likely to generate the highest volume of opportunities.
  
  
• While strategic buyers are expected to offer higher premiums than private equity buyers, 61 percent of respondents state that private equity firms’ ability to execute transactions quickly makes them more attractive to target companies.
  
  
• Financial sponsors are far more likely than their corporate counterparts to explore distressed deals. Accordingly, 56 percent of private equity respondents who have not traditionally focused on distressed opportunities say they plan to do so this year.
  
  
• Over the next 12 months, buyers will be focused on targets that complement existing businesses or operating units while sellers primary objectives will be to raise capital and divest non-core assets.
  
  
• 72 percent of respondents expect seller financing to be the most popular form of financing in the absence of regularly available debt.
  
  
• 58 percent of respondents expect sellers to negotiate higher termination fees over the next 12 months, and their use of MAC clauses and other deal terms reflects their concerns about transactions closing.

We expect you will find the survey both interesting and informative. For additional information, please contact Phil Taub at ptaub@nixonpeabody.com.

View also: Video 'M&A Executive Insights 2009: An Inside Look'

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The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.