Stephens M&A Chief Forecasts Increased Deal Activity in 2012

What Stephens Inc. Sees

We didn't have room to empty our reporter's notebook in the Page One story on 2011 merger and acquisition activity in Arkansas, so we'll present Marshal McKissack's deals forecast for 2012 here.

The man who heads Stephens Inc.'s M&A practice looked into his crystal ball at our request and saw this:

Stephens expects the M&A market to grow, "driven by record amounts of capital to put ‘to work' among strategic acquirers," he said, citing $1.9 trillion of cash on balance sheets and the needs of private equity firms that have more than $500 million of equity.

"Strategic acquirers need to grow, and private equity firms have raised capital they must invest or return to limited partners," McKissack said.

McKissack said that financing markets appeared poised to support deal-making activity, "with forecasts of annual volume of $180 billion to $225 billion and a competitive rate environment."

In addition, he expects "a continued uptick in divestitures as management teams look to increase efficiencies and focus. We expect cross-border activity will continue to grow as companies look to extend their brands, products and core competencies to faster growing markets."

However, McKissack said, "Europe will continue to be a headline distraction that can increase volatility." He also forecast some uncertainty, driven by 2012 being a presidential election year, "unknown fiscal policy and increased regulatory scrutiny."
Now you know at least as much as we do about mergers and acquisitions for 2012.