Vast majority of businesses looking to make acquisitions

BDO's 2010 Mid-Market Corporate M&A survey has revealed that the vast majority of businesses are looking to make acquisitions over the next five years.

Acquisitions were proven to be part of the corporate strategy for almost eighty per cent of businesses, with deals under the £20 million mark being the main focus for most.

The expectation for raising bank debt was found to have improved, but still remained a concern for some, hence the ninety-two per cent of companies that reported they were planning to use existing cash reserves or new facilities to fund these planned acquisitions.

Overall, sixty per cent of companies reported that they had seen an improvement in M&A opportunities and feel confident that this positivity will continue over the next 12 months.

The main barrier to future M&A, reported 91 per cent of respondents, was not in fact the uncertain financial climate, but the expectation gap between buyers and sellers.

The report concluded that companies with low leverage, cash reserves and a real strategic reason for a transaction are likely to find themselves best placed to achieve their acquisition objectives.

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