The number of worldwide business acquisitions in 2014 so far has topped the levels set in the past five years, with the M&A market now reaching pre-recession highs.
According to data from Thomson Reuters, in the first nine months of this year, the total value of global deals reached $2.66 trillion (£1.64 trillion). This is a massive 60 per cent rise in the figure at this point last year, with the number of M&As valued at $5 billion or more hitting a new high.
The figures are indicative of the growing confidence among business buyers; as the majority of industry sectors start to witness signs of sustained growth, people are more assured that they will see positive returns on their investments. However, particularly strong performances by the energy, technology and healthcare industries might be slightly distorting the overall level of M&As taking place.
Nevertheless, it is clear that the conditions for buying businesses are improving and the combination of increased capital and confidence within companies is leading them to explore avenues for inorganic growth. After five years of business people having to struggle to survive or settle for minimal, steady growth, there has evidently been a sudden surge as people wish to accelerate their expansion.
The valve has been opened and the pressure that mounted throughout the economic recession is being released in the form of more aggressive growth strategies. This means that speed in finding, researching and pursuing acquisition opportunities – particularly the highly sought after distressed businesses – is at a greater premium than ever.
As the M&A market climbs a steep upward curve, competition among business buyers for good value deals is going to increase. Ensuring they have their finger on the pulse is going to be key for those looking to add further to this year’s improved acquisition pot.