Full Rebound for Machinery-Related M&A

# of Deals in Q2-2012 Equals 2006 – 2007 Peak

Capital equipment-related M&A is much more cyclical than other industry sectors.  Tied to corporate investment and capacity planning, it is a tangible indicator of acquiror economic confidence, and 2012 – 2013 revenue and profit forecasts.  Looking at the 2012 slowdown in large M&A deals, middle market machinery/equipment M&A transactions provides evidence supporting increased domestic manufacturing activity.

In Q2-2012 North American-based machinery/equipment deals should exceed 80 announced transactions, equaling all-time peaks.  From our perspective, approximately half of this is related to technology acquisitions, and half is tied to forecasted infrastructure and capacity-related capital spending.  We are optimistic this end-market focus will enable an M&A deal window similar to 2006-2007, even while geo-economic issues are impacting Europe.

Source:  Dealogic LLC