Private Companies Value Quality Over Quantity In M&A Market

Private companies are spending the first quarter of 2011 rejoicing. According to research by BDO, P/E multiples for private companies in the M&A market increased in 2010 and are likely to continue to rise this year.

The spike is due to interest from both trade and private equity buyers. According to the report, a total of 1,928 deals were completed in 2010, 83 per cent of which were trade deals and 17 per cent private equity.

‘There appears to be a greater focus by management teams on growing their business than the same time a year ago,’ says Christopher Clark, M&A partner at BDO, in an article on the AltAssets website. ‘It is clear there is a greater appetite for quality deals at the right price.’

The manufacturing, business services and media and communications sectors accounted for more than half of all acquisitions completed in 2010, and BDO predicts the healthcare sector will be the most attractive to private equity buyers in 2011.

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