US middle-market M&A activity in first quarter 2014 was disappointing as low volume, high value trends continued from the second half of 2013. Deal volume was down 23.4 percent to 642 for the period compared to first quarter 2013, while dollar volume increased slightly by 4.4 percent to $24.4 billion over the same time period. Conditions for US leveraged financing markets remain strong and the economy has seen several positive indicators throughout the quarter including improved labor markets, strength in manufacturing, and increased consumer spending. Accordingly, economists are predicting modest economic expansion throughout the rest of 2014 with uncertainties as to the economic and political impact of the start of the Affordable Care Act and the assignment of a new Federal Reserve Chairman. Despite an overall uptrend in the US economy, these uncertainties combined with a lack of sellers will likely have dampening effects on overall M&A, and only modest growth in deal making is expected into second quarter 2014.
|US middle-market M&A activity||642 Deals|
|US middle-market M&A average deal multiple||8.3x|
|Cash and short-term investments of S&P 500||$1,269 billion|
|Private equity capital raised in fourth quarter||$39 billion|
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