This January was a busy one for CMF – we spent most of the month aggressively meeting with middle-market private equity and M&A professionals and were able to gauge some early indicators on M&A activity for 2013. With the integral elements of an active M&A market in place – capital at the ready; interest rates attractively low; and more certain tax, political and economic environment than the year past – one would think 2013 would be off to a running start for deals and private equity. However, one key ingredient remains missing: legitimate sellers.
Sell-side investment bankers are telling us that the “pipeline is light.” Projects currently in the works in January are special situations. We should know by the third week of February, when new prospective sellers are close to finalizing their 2012 numbers, whether or not the dearth of deals is going to last one quarter, or potentially longer.
Mardi Gras 2013 is coming early this year on February 12th, so here’s to hoping that we can also celebrate the start of a legitimate M&A bull market.