I am in the midst of the summer doldrums – several transactions have stalled – and I was a bit startled to see this Wall Street Journal article entitled “July Is This Year’s Best Month for Dealmaking.” While many of my M&A friends have noted an uptick in activity during the past few months, it is my impression that the summer has not been particularly active, and it would be great to hear that my limited experience is atypical.
Read the article and the supporting data a bit more closely, however, and you will see that the headline is based on the value of announced mergers and acquisitions in the U.S. Total deal value is obviously not a direct correlation to deal activity – several big deals can easily skew the numbers – and I think that is probably what these July numbers indicate. And the WSJ does note that summertime is generally slow. Still, this article is dated July 22nd – there is still another week to announce more deals in July – and the total deal value indicated for July is the largest since September of 2010, and the second largest in all of 2010 and 2011. Impressive numbers.
For those of you interested in a different view, and one focused in part on the sub $50 Million market, I recommend to you the comments of my friend Franz von Bradsky of Green Tree Capital (see his recent post “Middle Market M&A Muddles On” here). Franz has looked at reports for the first five months of 2011, and notes that the sub $50 Million market, and particularly the sub $10 Million market, have not enjoyed the same growth in transactions as the rest of the market. I suspect that the same is true for July as well.