M&A forecasters on 2008: Middle market and cross-border deals

Corporate Dealmaker Forum, Decemeber 12, 2007:
'Tis the season for predictions, and we've just received two sets from two different M&A market participants. Middle-market investment bank Harris Williams & Co. expects: PE megadeals will continue to be on hold; valuations will ease somewhat; more cross-border activity, including foreigners shopping in the U.S.; and opportunities for strategic buyers.
PricewaterhouseCoopers' Transaction Services is on a similar wavelength, adding that international buyers are already busy acquiring U.S. targets. For the first 11 months of 2007, cross-border deal value was $354 billion, PwC says, representing 23% of the U.S. total, a 73% increase from the annual 2006 cross-border deal value of $204 billion. PwC's Bob Filek also sees a possible rebound for leveraged lending, and with it, some PE activity. “The core fundamentals of corporate borrowings on the leverage market are solid relative to historical standards. Leveraged lending caught a cold from the subprime mortgage market,” says Filek. — Kenneth Klee
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