According to a survey by The Association for Corporate Growth and Thomson Reuters, dealmakers at the end of 2009 expected merger and acquisition activity to pick up in the first six months of 2010, with manufacturing, health care and financial services positioned to benefit the most in the near-term. However, global merger and acquisition activity in the first half was actually off to its worst start in six years. With economic uncertainty and a sovereign debt crisis in Europe, the second half of 2010 may be just as disappointing.

According to Thomson Reuters data, through June 22, global M&A in 2010 was worth just under $976 billion, less than half the value of the first half of 2007, M&A’s peak year.  

To check on M&A market multiples in the first half of 2010, we looked to the Pratt’s Stats database of private transactions. This database showed that the median invested capital to EBITDA multiple was 4.9 in the first half of 2010 compared to 2.7 in the first half of 2009. For historical reference, the median invested capital to EBITDA multiple from January 1, 2000 to date is 4.9. Therefore, it appears that market multiples have returned to “normal” levels after a sharp decline in the first half of 2009.  

Conclusion

To summarize, although the number of M&A deals so far in 2010 is very low, the market multiples seen have rebounded to normal levels after the economic crisis in the first half of 2009.

• Holman v. Commissioner (filed 4/7/10)
  
  
• Ringgold Telephone Company v. Commissioner (filed 5/10/10)
  
  
• Ludwick v. Commissioner (filed 5/10/10)
  
  
• Pierre v. Commissioner (filed 5/13/10)
  
  

• "8th Circuit Rules Transfer Restrictions Properly Disregarded in Family Partnership Case", by Scott E. Vincent, 66 J. Mo. B. 158, May-June, 2010
  
  
• "Valuing a Real Estate Undivided Interest", by Robert F. Reilly, 29-5 ABIJ 44, June 2010
  
  
• "A Statutory Escape Route: Shareholder Disputes", by Susan Marmaduke, 70 Or. St. B. Bull. 36, May, 2010