Bridgepoint Midwest M&A Index, Q3-11

MIDWEST MERGERS AND ACQUISITIONS INDEX UP IN 3RD QUARTER
But median deal size declined to the lowest level in 9 quarters

Lincoln, NE – October 31, 2011 – The number of Midwest companies that participated in an acquisition or merger over the past six months increased in the third quarter of 2011. That’s a good sign that the local economy is on the mend. But all the news was not as good. While the volume of these types of deals was up, the size of the deals involved was the lowest in over two years.

Adding to that, the growth in the number of deals seems to be slowing as well. 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 growth of 3.3% represented the lowest increase in eight quarters.

The Index shows relatively resilient deal volumes in the face of uncertain national GDP growth. The third quarter Index level of 99.2 reflects a normalized corporate deal environment in the Midwest, despite the fact that the volume growth has decelerated in recent quarters from the Q4-10 peak after recovering from the 2009 trough.

For Midwest businesses, this is still good news overall. The increase in deals reflects that the valuation gap has closed. Valuations appear to be healthy, yet palpable for both buyers and sellers.

This current environment represents an attractive opportunity for Midwest business owners to explore possible acquisitions or mergers and suggests that more attractive financing opportunities may be more 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.