Bulls Remain Out on M&A, US Economy for Second Half of 2015: Deloitte Poll

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Jun 03, 2015, 09:10 ET

NEW YORK, June 3, 2015 /PRNewswire/ -- For the second half of 2015, deal flow involving U.S. companies is expected to increase (39.5 percent) and the U.S. economy is expected to continue to improve (62.2 percent), according to a May Deloitte poll. Nearly half of respondents (47.5 percent) said they do not believe the US dollar had peaked yet.

Of respondents whose organizations are contemplating transactions, 45.2 percent expect the deals will occur in North America — a 5.2 percent increase since a similar Deloitte poll in May 2013.

"The 2015 deal market has definitely been frothy thus far. While North America has the largest volume of domestic deal activity presently, there is still plenty of inbound and outbound cross-border activity as well. We see plenty of non-U.S. strategic and financial buyers aggressively bidding on U.S. assets, although they are having to deal with significant competition from their local counterparts," said Kevan Flanigan, national managing director, Deloitte Corporate Finance LLC.

When asked about the greatest challenge to deal flow in the second half of 2015, respondents indicated that corporate cash stockpiling instead of spending it (34.4 percent) was the principal impediment. Problems in the Eurozone (26 percent) and China's economy (15.9 percent) were also cited as challenges.

"Many companies have accumulated huge piles of cash that continue to grow," Ira Kalish, chief global economist, Deloitte Touche Tohmatsu Limited. "The continued strength of the U.S. dollar has made assets in other countries relatively cheap, which could spark more cross-border M&A activity in the second half of 2015."

Flanigan added, "There is aggressive competition to invest in performing companies by both financial and non-financial institutions who want to put their money to work through everything from mergers, acquisitions and divestitures, to minority and majority recapitalizations, to debt refinancing. Liquidity alternatives available to well-managed private companies are as strong as we have seen at present. We're truly in a seller's market for business owners looking to take some cash off the table."

About the online poll
More than 2,040 professionals responded to poll questions during a May 13, 2015 webcast, titled "Mid-Year Outlook: Balancing the Bullish U.S. Deal Market with Regulatory Pressure and Global Risks." Respondents work in a range of sectors including banking and securities, technology, investment management and process and industrial products. Click here to listen to the webcast.

About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as "Deloitte Global") does not provide services to clients. Please see www.deloitte.com/about for a detailed description of DTTL and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

Deloitte Corporate Finance LLC ("DCF"), an SEC registered broker-dealer and member FINRA and SIPC, is an indirect wholly-owned subsidiary of Deloitte Financial Advisory Services LLP and affiliate of Deloitte Transactions and Business Analytics LLP. Deloitte Financial Advisory Services LLP is a subsidiary of Deloitte LLP. Investment banking products and services within the United States are offered exclusively through DCF.

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