The total value of all merger and acquisition (M&A) transactions was $810.3 billion during the first half of 2010.  This is very similar to last year's $814.6 billion for the same time period.

Experts at MidCap Advisors and other leading M&A firms expect deal activity to pick up as market fundamentals strengthen and businesses that have conserved cash begin implementing growth plans that had been put on hold during the recession.

"During the the last twelve months deal activity has been hampered by uncertainty and mixed signals from the public markets," said Rich Jackim, Managing Director of MidCap Advisors. "Our firm has a strong deal pipeline right now," said Jackim. "But if we look forward six months toward the end of 2010, we expect to see a significant increase in activity from well-capitalized companies and private equity groups as more of them aggressively put their money to work in select market segments."

This feeling is confirmed by a recent Ernst & Young study of over 800 business leaders which found that 57% of businesses are likely or highly likely to acquire another company in the next 12 months.  This is almost double the number of similar responses from the November 2009 survey. In fact, 47% of respondents expected to make an acquisition in the next six months, compared with 25% in the previous survey.

Two important drivers of this increase in deal activity are the increased cash reserves companies have built up and the increasingly available credit at relatively low interest rates. The largest companies in the United States are currently sitting on $1.8 trillion in cash, and interest rates have fallen to historic lows.  The availability of credit and low interest rates are allowing solid companies to borrow at attractive terms and private equity groups to get back in the market.

"Previous recessions have yielded some of the industry's highest vintage returns and well-run private equity groups know how to take advantage of market cycles to capture these opportunities," said Jackim. "MidCap Advisors expects to see a steady increase in private equity deals during the rest of the year and into 2011 as private equity firms find opportunities to refinance, sell or grow businesses through acquisition."

The good news is that 2010 has started out strong and we expect M&A activity to continue to accelerate across a range of industries as private equity firms and strategic buyers take advantage of the thawing credit market and strong equity markets.

MidCap Advisors works with privately held companies on a wide range of corporate finance transactions.  MidCap Advisors offers integrated, objective transaction advisory services to help clients evaluate opportunities, make transactions more effective and achieve their strategic goals. MidCap Advisors has a national reach with 8 offices across the country and the experience of 200 transactions across 50 different industries. We can bring together the professionals you need, wherever you need them, to help you achieve success throughout a transaction -- and beyond. Whether it's a merger, acquisition, divestiture, recapitalization, joint venture, strategic alliance or restructuring, we can help you make the right deal at the right price at the right time. That's the MidCap Advisors 360 degree approach.