Merger and acquisition action in 2016 could end up at about the same strong level as a year earlier as solid market conditions continue to make M&A sense.

That’s the view of Rick Weil, Managing Director – Investment Banking for Mesirow Financial. He spoke at FPA’s Fall Executive Conference in October. Weil sees three conditions driving the market.

First, market conditions for M&As are as strong today as they were five years ago. He says that companies are showing solid financial performance, there is an abundance of capital, and there are a lot of synergies.

Second, the changing world with its uncertainties fosters M&A activity. “It is challenging and frustrating,” Weil says, noting that the opportunities remain robust in the face of sometimes difficult global backgrounds.

Third, Weil says, “Bids for companies — big and small — remain very hot.”

As an example of the market’s strength, Weil showed data on average EBITDA multiples for packaging M&A activities. In coming out of the recession, the price multiple in 2011 was 6.9 times EBITDA. The 2015 figure was 7.7 times; the 2016 ratio has been 8.3 times to date.

Among reasons for the rising values, Weil says, is the stability of the packaging market.

For More Info

To see the presentation slides, FPA members can go to www.flexpack.org and click “Download Presentations from the FPA Fall Executive Conference.”