Merging productivity

Article Type: News From: International Journal of Productivity and Performance Management, Volume 59, Issue 4

Mergers and acquisitions (M&A) activity is picking up in 2010, according to PricewaterhouseCoopers’ (PwC) Transaction Services practice. While credit markets are easing for some participants, financing remains the dominant challenge to M&A activity increasing the pressure on middle market deals. Strategic buyers with strong balance sheets and robust cash reserves are well-positioned for strategic M&A opportunities. As these strategic buyers take advantage of their ability to manoeuvre in the face of a challenging deal environment, PwC suggests they will pursue deals with a focus on synergies– including enhancing productivity, providing cost-savings and adding revenue volume to their businesses.

“Those who have built their balance-sheets for a rainy day might come out of last year’s storm to find the rainbow, and at the end of it,nicely-valued acquisition targets that provide opportunities for revenue growth and enhanced productivity,” said Bob Filek, Partner with PricewaterhouseCoopers Transaction Services. “As a result, M&A activity in 2010 is being driven by strategic buyers who have access to capital and the strategic vision to capitalize on some of the best values we have seen in recent times.”

“Companies have taken aggressive actions on costs; the low hanging fruit is gone, and to drive further efficiency they will look to combine with similar players to drive scale and enhance productivity. The ‘merger of productivity’ is a driving force in 2010 as companies look to drive revenue growth and enhance margins,” continued Filek.