Andrew Bozzelli on the State of M&A in TheDeal Magazine

Each week in TheDeal Magazine, author Bob O’Brien delves into the state of the broader M&A marketplace. This week, O’Brien talked with Livingstone Managing Director, Andrew Bozzelli, to get his insight:

Livingstone recently represented HawkeyePedershaab Inc. in its sale to Forsyth Capital Investors LLC, the 12th transaction closed by the firm’s global industrial team over the last year. In fact, for the whole of the M&A market, deal flow is up, and dramatically. The number of deals announced in the first three-quarters of 2016 has increased to more than 5,000, a bulge of 61%. That many of them are transactions in the middle market, or lower middle market, has the effect of tempering the ebullient character of the market environment.

That’s understandable: small deals don’t get the animal spirits stirred up like the $160 billion Pfizer Inc./Allergan Inc. hookup that led last year’s M&A tables, or the $117 million Anheuser-Busch InBev SA/SAB Miller plc merger.

Instead, this week, what have we got? BATS Global Markets Inc. being bought by CBOE Holdings Inc. Price tag: $3.2 billion. Not to belittle a $3 billion deal. It’s just not a $117 billion deal.

Dry powder is out there.

“There’s a lot of capital in PE funds that needs to get put to work,” Bozzelli said.

But financial sponsors aren’t the only ones with war chests.

“Strategic buyers are looking for ways to grow their business,” Bozzelli added. “Acquisitions are the best way to buy growth.”

And, he added, the environment looks robust as he looks out. “I don’t see anything on the horizon that’s going to create a shift, at least not in the middle market,” Bozzelli said. “the next 12 months look very bullish for M&A.”

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