The M&A Trends Of 2015 Will Likely Continue Into 2016
On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Mergers & Acquisitions on Tuesday, January 26, 2016.
The slow-down of the economy in 2015, along with some unique demographic conditions, set the stage for a year of aggressive M&A activity. The market was rife with volatility, creating significant obstacles for growth of businesses across all major industries.
From large-cap conglomerates to mid-sized firms, companies utilized mergers and acquisitions to trigger growth and battle systemic head winds. Analysts believe 2016 will follow a similar trend.
According to reports, 2015 market conditions fueled more merger and acquisition activity than any year since 2007. Some analysts believe that the market is intersecting with a significant moment in United States demographics. Baby boomers who have built and owned their own companies are now looking to monetize and settle in for retirement. The younger generation, on the other hand, often lacks the motivation or experience needed to manage the tech companies they started right out of college. Many are ready to sell their young start-ups after just a few years.
This provides mid- to large-cap companies a unique growth opportunity. Older, established companies have proven value as money-makers with deep client lists. Young tech companies offer the opportunity to simply acquire technology and innovation acumen, without the cost and ramp-up time that would be needed to develop such research in-house. They can simply hit the ground running by drawing these smaller companies into their portfolio.
Many experts believe this high rate of M&A will continue on into 2016. This creates the opportunity for small businesses and startups to consider the profitable possibility of being acquired by larger firms. For guidance in considering this option and how it could affect the company, please click here.