Sectors undergoing transformational change create terrific opportunities for M&A. One sector in the midst of a sea change now is financial services, as regulators all over the world urge banks to stick to their knitting and divest non-core assets. Our cover story by contributing editor Danielle Fugazy explores the sector, which is teeming with targets ripe for the picking.

Although a handful of sectors soared in middle-market dealmaking during 2013, for many, it was the year that wasn't. Despite the stars being aligned for a healthy transaction environment, dealmaking never took off the way many had predicted - and hoped - it would. One primary culprit was the sizable gap between how much buyers were willing to pay and how much sellers were willing to accept for their companies. The fourth quarter finally started to show signs of life and proved to be the year's strongest. As 2014 dawned, optimism abounded. Dealmakers in dozens of interviews and several surveys conducted by Mergers & Acquisitions said the new year would be better than the old. Sources say earnings results are improving, which is narrowing the gap of expectations between buyers and sellers.

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