Global M&A revival on track despite fall in confidence, Indian M&As likely to rise: KPMG
18 Jul 2011
KPMG International's latest Global M&A Predictor shows that forward price / earnings (PE) ratios have risen by 12 per cent over the last year, indicating an increased appetite for making deals.
However, these figures are tempered by a fall over the last six months. A cause for optimism is the growing M&A capacity, as evidenced by the downward trend in net debt / EBITDA ratios, projected to fall by 26 per cent by June 2012.
These lower debt levels should put prospective corporate buyers in a stronger position to fund any potentially attractive deals.
On a global sector basis, healthcare and utilities both show a growing appetite. Healthcare has the added advantage of having low leverage, so it would be no surprise to see a rise in acquisition of companies in this sector.
Conversely, utilities is the single most indebted sector, with any new acquisitions likely to be funded by new equity or the disposal of existing assets.
Telecommunications has almost held its own over the past six months and is well up over 12 months so continued activity can be expected, with Consumer Staples just behind.
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