Bridgepoint Midwest M&A Index, Q4-11

MIDWEST MERGERS AND ACQUISITIONS DECLINE IN 4TH QUARTER
But median deal size doubled to the highest level since 2007

Des Moines, IA – January 31, 2012 – The number of Midwest companies that participated in a merger or acquisition over the past six months declined slightly in the fourth quarter of 2011. While the number of M&A deals was down, there was good news – the median size of the deals involved was the highest since the 2007 market peak. Market growth for these types of deals has now slowed for five straight quarters in the face of a fitful – but recovering – economy.

According to the Bridgepoint Midwest M&A Index, a measure of corporate merger and acquisition activity in the U.S. Midwest region, the year-over-year Index decrease of 9.8% represented the first such decrease in nine quarters. However, the fourth quarter Index level of 97.6 still reflects a normalized corporate deal environment in the Midwest and relative stability when compared with the broader United States. U.S. M&A deal volumes declined 20.4% during the fourth quarter.

For Midwest businesses, this is still good news overall. The relatively healthy level of deals reflects that business owners are again receiving valuations they’re comfortable with and expected a few years ago. “While a choppy economic recovery tempered Midwest deal volumes in the second half of 2011, we see the deal market regaining its footing in 2012 as the economy continues to improve and valuations remain strong,” said Matt Plooster, Managing Principal of Bridgepoint Merchant Banking.

The current environment represents an attractive opportunity for Midwest business owners to evaluate their strategic options and suggests that more attractive financing opportunities may be readily available.

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Bridgepoint Merchant Banking is a lower and middle market investment banking and private equity firm that serves clients over their corporate lifecycles by providing merger and acquisition and corporate finance advisory services. Bridgepoint Merchant Banking also invests capital directly into companies through its private equity and venture capital funds.