Survey: Deal-Makers Optimistic About 2005 M&A Climate

An active 2004 mergers-and-acquisition environment will be followed by an equally dynamic 2005, say the results of a recent survey.

The Association for Corporate Growth (ACG)/Thomson DealMaker's Survey show that 72% of deal-makers say the current environment for mergers and acquisitions is good or excellent. Just 45% said the same in the previous year's survey. Some 2% called the environment poor, down from 8% last year.

Survey respondents say the sectors that will experience the most M&A activity are technology (29%), manufacturing and distribution (19%), and healthcare and life sciences (19%).

"Deals are back in a big way," says Peter Coffey, ACG president. "Private equity professionals, investment bankers, corporate development officers, lenders, lawyers -- everyone involved in putting deals together -- have witnessed a major turnaround in the deal environment."

What drives most of today's mergers and acquisitions? Survey respondents say the primary goal is to increase revenues and profitability (51%), followed more distantly by growth to market share.

The survey was conducted in November 2004 and completed by 1,803 private equity, venture capital and leveraged buyout firm members, investment bankers, brokers, lenders, finance providers and other professionals involved in corporate growth. All were members of ACG, a global association for professionals involved in corporate growth, or customers of Thomson Financial, an information provider. The vast majority (1,597) of respondents were from the United States.

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