Bridgepoint Midwest M&A Index, Q3-12

BRIDEPOINT MIDWEST M&A INDEX DECREASED SLIGHTLY IN Q3
But remains near historical high

Lincoln, NE – October 31, 2012 – The number of Midwest companies that participated in a merger or acquisition over the past six months decreased marginally in the third quarter of 2012.  After hitting a new high in Q2-12, the index decreased 1.6% to 117.9. Despite the slightly lower index level, deal sizes and valuations increased, continuing the rally from the 2nd quarter, and deal volume remained robust.

The current index level reflects a continued elevated level of Midwest M&A deal volumes in the face of a relatively stable local economy.  According to the Bridgepoint Midwest M&A Index, a measure of corporate merger and acquisition activity in the U.S. Midwest region, the latest index increased 18.7% on a year-over-year basis.

This news is especially good for Midwest businesses.  The continued healthy level of deals reflects that Midwest companies are receiving strong M&A interest from both sponsors and other corporates, while middle market M&A and private equity volumes across the U.S. and abroad have declined so far in 2012. The expected increase in the capital gains tax rate also continued to drive exit activity for investors and business owners looking to lock in returns before year-end. In addition, strong-performing and healthy companies continued to receive premium valuations in Q3.

“A continued stable regional economy in the face of broader macro uncertainty suggests the Midwest deal environment will continue to outpace the national deal market over the near term,” said Matt Plooster, Managing Principal of Bridgepoint Merchant Banking. “We remain excited about the opportunities this presents Midwest businesses and owners.”

The current environment represents an attractive opportunity for Midwest business owners to explore liquidity options. Middle market lenders are also providing additional leverage for M&A transactions.

To read the full report, click here.

Bridgepoint Merchant Banking is a lower and middle market investment banking and private equity firm headquartered in Nebraska and Iowa 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.