Early-stage deal flow in the middle market is accelerating, and dealmakers expect the momentum to continue in 2014, according to polls taken by Mergers & Acquisitions in the fourth quarter. The uptick began in September and October, as our first installment of The Mid-Market M&A Conditions Index demonstrated. 

Completed deals under $1 billion soared in October, as data from Thomson Reuters demonstrates. Closed deals dipped in November, due at least in part to the Thanksgiving holiday, but dealmakers continued to express confidence in middle-market M&A growth.

Of those who participated in a survey we conducted in late November and early December, 71 percent said 2014 will be a better year for mid-market M&A than 2013. When asked to name the sectors seeing the most growth, survey participants identified: health care, technology, energy and manufacturing. (Look for the upcoming January issue of Mergers & Acquisitions for our cover story on these sizzling sectors.)

As the year draws to a close, experienced dealmakers are expressing optimism. 

“Barring a significant macroeconomic shock, 2014 is poised to be a great year for middle-market dealmaking,” says Mark Brady, global head of M&A at Chicago investment bank William Blair & Co. LLC. Brady was the winner of our M&A Mid-Market Award for 2012 Best Dealmaker of the Year.

"Our sell-side backlog is up 45 percent since this time last year, and conditions in the markets are strong."

Robert Profusek, global head of M&A at law firm Jones Day, agrees. “The deal finance markets  have never been better,” Profusek says.

Dealmakers have "looked to opportunities in the debt market to recapitalize and monetize existing investments," says Martyn Curragh, PwC's U.S. deal leader. Given the "pipeline of deals and today's strong debt and equity markets, which help fuel divestitures and exits, we expect that M&A momentum to continue into next year," he says.

Strategic buyers, as well as private equity investors, are enthusiastic about the year ahead. Of the U.S. executives polled recently by EY Americas Transaction Advisory Services, 41 percent said they expect to pursue at least one acquisition in 2014, compared with only 23 percent polled at the end of 2012.

--Additional reporting by Allison Collins

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