According to a recent report from Hype Park Capital, Florida had the 4th most mergers and acquisitions transactions by volume in the United States in 2012 with 517 completed M&A transactions. Despite being better known for its real estate and tourism industries, South Florida had 196 completed M&A transactions in 2012, which would have put South Florida as the 15th ranked state by volume in 2012. The report shows an active M&A market in Florida in the small and middle markets. In particular, M&A transactions in the small market (deals valued at $100 million or less) represented almost 75% of the total deal volume in Florida in 2012 for M&A transactions with disclosed values.
Driving Forces: Healthcare Sector and Private Equity Firms
The healthcare sector and private equity firms continue to be driving forces in the Florida M&A market. The healthcare sector was one of the few sectors to show increases in both M&A deal volume and deal value in 2012. With available funds to invest, private equity firms continue to be active in the M&A market, accounting for approximately 31% of the completed transactions in 2012 according to the report.
Political Uncertainties Contribute to Volume Decrease
As for the downside from the report, the volume of Florida M&A activity decreased 11% in 2012, continuing a downward trend from the prior year, even with what seemed like a rush of M&A deals at end of 2012 related to the expected change in the capital gains tax rate. This decrease in M&A activity was most likely the result of uncertainty related to the presidential election, U.S. fiscal policies and general concerns about economic growth. Hopefully, our politicians will finally be able to agree on long-term U.S. fiscal policies in 2013 to allow business owners to make long-term financial decisions regarding their businesses and their exit strategies.