Middle-market dealmakers polled shortly after the election reported a significant drop in M&A activity, according to the Mergers & Acquisitions’ M&A Conditions Index (MACI). The composite score fell to 50.8, down from 55.4 the previous month. All components of the index registered a slow-down. “November itself held a lot of uncertainty,” as one survey participant put it.
Despite the short-term lull, 48 percent of the 250-plus survey respondents predicted the election outcome would result in an increase in mid-market M&A. Nearly 42 percent forecast the same level, and only about 10 percent said the impact would be less activity.
Lower taxes and fewer regulations (especially in the financial services sector) were the most cited reasons for optimism. Cross-border deals, changes to the healthcare system and carried interest were the causes of concern mentioned. Dealmakers responded to the survey from Nov. 10-15.