Middle Market Activity, October 2012

Posted On: / By: John Davies
Middle Market Issues

Year-to-date 2012 Middle Market deal volume has dipped moderately from 2010 and 2011. This trend is counter to expectations that the potential for capital gains tax increases in 2013 would spur more activity in sales of privately held, middle market companies. Moving forward, we expect middle market transaction volume will increase because (a) private equity firms and strategic corporate investors are sitting on huge stockpiles of capital (Capital IQ reports that the S&P 500 companies have $1.2 trillion in cash on hand and private equity firms have $432 billion in available capital.) and, (b) the need to put capital to work is driving up the multiples being paid for good businesses.

After obtaining his MBA, John began his career at PriceWaterhouseCoopers, the international accounting and consulting firm, and subsequently joined Progressive Corporation, a large U.S. based insurance company. John was a Division President at Progressive and subsequently became the CEO of a New York based private equity investment company. In 2001, he founded MMI as a platform investment company and MMI has subsequently acquired 15 additional companies.

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