Deal activity in the middle market remained strong in the Q2 ‘10, continuing the solid rebound that started in Q4 ’09 and Q1 ’10. In Q2 ’10, both aggregate deal value and volume increased 26% and 2.9% from Q1 ‘10, respectively, for disclosed middle market transactions (Enterprise Value < $500 million and > $10 million).
Increases in deal value and deal volume are being driven by both strategic buyers and private equity firms. Attractive valuations in the middle market, improving economic conditions and record cash balances have caused strategic buyers to emerge from the M&A sidelines. In addition, the private equity community is increasingly active in the middle market, under pressure to spend uninvested capital and to realize returns on existing portfolio companies before the tax on capital gains increases in 2011.