Investing

Acquisition Multiples are High, But Fair

As part of a year end review of merger & acquisition activity in 2011, consulting firm PricewaterhouseCoopers LLC surveyed corporate executives regarding the outlook for 2012. Nearly 41% of respondents, for example, said that the 2011 economy either delayed or killed proposed deals. About 45% said either were able to adapt or said that there was no impact, while 14% found even better deals.

For 2012, 58% of those surveyed said that multiples were “fair” and the remaining 42% were evenly split, with half saying prices were too high and half saying prices were too low. More than 30% are considering an acquisition in the next 1-3 years, while only about 11% are considering to sell either an asset or the entire company.

With profits steady and corporate coffers bulging, that may mean that we’re about to see more hostile takeover offers in 2012.

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