Over the next 12 months, dealmakers expect M&A to grow in the overall market and in the financial, insurance, and real estate (FIRE) services sector, according to the Mid-Market Pulse (MMP). (See related graphic.)
In the short term, more growth is predicted for the overall market than for FIRE, as indicated by the 3-month composite score of 70.8 for overall, compared with 66.0 for FIRE. In the intermediate term, however, FIRE is expected to grow more than overall, as suggested by the 12-month composite score of 74.7 for FIRE, compared with the 12-month composite score of 71.8 for overall.
Regulatory and tax issues are among the factors driving M&A in FIRE, especially as banks look to divest non-core assets. Published by Mergers & Acquisitions in partnership with McGladrey LLP, the MMP is a forward-looking sentiment indicator that monitors the near- and intermediate-term outlook for transaction activity within the middle market.
The MMP is derived from monthly surveys of approximately 250 executives at private equity firms, investment banks, lending institutions and advisory firms in accounting, law and consulting.
Based on a set of recurring questions and focused on a different sector each month, the MMP is a leading indicator for potential changes in momentum in M&A activity.