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Quality targets hinders deal volume in business products and services

4Q 2015 Business Products and Services Industry Spotlight


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Similarly to recent quarters, quarterly M&A volume for the business products and services (B2B) industry moved lower in Q3, despite a significant jump in aggregate value. The period registered nearly $65 billion in completed transaction value across 825 completed deals. This translates into a quarter on quarter (QoQ) decline of over 8 percent in terms of deal counts, but a rather impressive 57 percent QoQ jump in total deal worth.

Revenue growth remains a struggle for many enterprises, and while strategic acquirers continue to seek out synergistic combinations, private equity-backed M&A activity paused somewhat during recent quarters, likely due to a reassessment period, as investors gauge the global investment landscape. Current valuation levels also haven’t helped when it comes to private equity investment. Multiples are trending a bit lower, yet they still remain fairly heightened, and as deal-makers look to evaluate deal prices, the decline in volume last quarter is potentially attributable to a drop in the quality of targets coming to market that can command the price levels seen as of late.

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