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Survey: Merger and acquisition business to increase in 2018

New Hampshire Union Leader

January 22. 2018 8:14PM

MANCHESTER — Executives at mid-size companies across the country are more interested in pursuing mergers or acquisitions in 2018 than a year ago, according a survey due out Tuesday.

“Buyers are increasingly confident in the importance of — and in their ability to successfully consummate acquisitions — potentially foreshadowing an even more active environment in 2018 than years past,” according to the seventh-annual Citizens Commercial Banking Middle Market M & A Outlook.

Interest in both buying and selling has increased in the past year — driven by rising valuations, economic optimism and a push to find growth.

The new federal tax law, passed after executives were surveyed, will “add fuel to the fire” for making deals since it lowers the federal corporate tax rate from 35 to 21 percent, said Frank Quaratiello, vice president of media relations at Citizens.

Dover economist Brian Gottlob said the state’s health care and banking industries have seen consolidation in recent years.

“A number of smaller technology companies have been acquired and New Hampshire has a lot of those, and many will be attractive acquisitions,” said Gottlob, who wasn’t involved in the Citizens survey.

There was an uptick in economic optimism after the 2016 presidential election among companies with yearly revenues of between $25 million and $2 billion, according to the survey.

Queried last fall, “respondents appear to be even more bullish on economic conditions for 2018,” the report said.

The survey showed 59 percent of sellers said they were either involved or willing to be involved in merger/acquisition activity in 2018, up from 53 percent last year.

Forty percent of buyers were “extremely confident” about completing an acquisition this year versus 23 percent last year.

Ralph Della Ratta, head of M&A Advisory at Citizens Capital Markets, said some baby-boomer owners are waiting for the right time to sell.

“Several factors such as the tax reform law and historically high valuations certainly give them a great opportunity to make a deal,” he said.

The survey included results from 410 companies, including six from New Hampshire.

“The increase in M&A is not a Trump phenomenon; it is a worldwide phenomenon that has been ongoing for some time and has accelerated over the past three years when M&As have been at record highs,” Gottlob said.

“It is, in part, a function of changing technology and globalization that has many companies looking at their mix of capabilities in order to adjust their assets to be able to best compete and grow in a changing world economy,” he said.


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