Mergers & Acquisitions: The Dealmaker's Journal

Strategic Strength; Growing Confidence in the Economy Opens Corporate Coffers

Byline: Anthony Noto

The stage is set for strategic buyers. Uncertainty over macroeconomic issues may have dimmed the corporate lights on M&A plans in previous years, but 2014 is providing a more promising script. Debt financing is readily available; many corporations boast significant cash on their balance sheets; shareholders are clamoring for more than just share buybacks; and companies are scouring for targets at home and abroad with more immediacy than before. CEOs are viewing the M&A scene with more confidence than they have in a long time.

Ametek (NYSE: AME) provides a good showcase for the trend. The Berwyn, Pennsylvania-based maker of electronic instruments and electromechanical devices has inked five acquisitions in 2014 and expects to do more, says William Eginton, senior vice president of corporate development.

"There is a greater depth of deals that are available now," Eginton says, adding that 2014 has been especially right for well-positioned companies to scoop up targets.

The numbers back him up. Strategic buyers closed 1,251 middle-market deals valued at $144.4 billion in the first eight months of 2014, up from 1,157 valued at $129.3 billion during the same period in 2013, according to Thomson Reuters.

Across all sectors, strategic buyers are making their way back to the negotiating table. General Mills Inc. (NYSE: GIS), for example, recently acquired Annie's Inc. for $820 million. The deal marks the latest venture into the organic food space for the Minneapolis-based buyer. The last deal of this type for the company was in 2012, when General Mills purchased Food Should Taste Good, a natural snack- foods company based in Needham Heights, Massachusetts. …

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