State of Middle Market M&A 2018

Capstone conducts an annual survey of company owners and executives to elicit their perspective on mergers and acquisitions (M&A) and external growth in the middle market. The 2018 report is our fifth in this series.

Key Findings


  1. Executives are optimistic about growth. A higher percentage saw an improving environment for growth in 2017 than in 2016 (48% compared to 35%).
  2. M&A activity picked up in 2017. Those who observed higher M&A activity grew from 31% in 2016 to 38% in 2017.
  3. M&A activity will increase in 2018. More executives are 100% certain they will pursue deals in 2018 (22%) than in 2017 (17%).
  4. The top driver for pursuing M&A in 2018 is to increase share of existing markets (65%).
  5. Time and attention demanded by the process remains top barrier to leveraging M&A as a tool for growth (35%).
  6. Of the 44% who pursued M&A in 2017, the majority executed acquisitions (59%).

Middle Market M&A Continues to Grow

As anticipated in last year's State of the Middle Market M&A Report, there was renewed interested in pursuing acquisitions in 2017 as the political and economic landscape stabilized. The number of respondents seeing more M&A activity in their industry rose from 31% in 2016 to 38% in 2017. In the US the number of deals increased by 14% to 13,024, but average deal size decreased by 26% to $109 million,i indicating an increase in smaller transactions. A higher number of our respondents are pursuing deals in 2018 than in 2017. Given the responses from our survey participants and our own observations of the marketplace, we predict robust M&A activity for 2018.



i "Mergers & Acquisitions Review Financial Advisors: Full Year 2017." Thomson Reuters. January 2018. http://dmi.thomsonreuters.com


Read the full report



REPORT ARCHIVE


State of Middle Market M&A 2018 Read Report
State of Middle Market M&A 2017 Read Report
State of Middle Market M&A 2016 Read Report
State of Middle Market M&A Q1-Q3 2014 Update Read Report
State of Middle Market M&A 2014 Read Report