Much like last year, it seems like we are ending 2011 on a high note. Despite numerous setbacks with the economy, many US companies managed to explore and find growth opportunities through buying a business for sale.

Figures from Dealogic reveal the US registered $841 billion worth of deals. That’s a 24 percent increase from last year and the highest since pre-recession.  Domestically, deal making activity was very active as it accounted for 31 percent of all global activity, the highest level since 2006.

With the continued economic recovery and as industries continue to post profits; companies in the US have become an excellent acquisition haven for companies worldwide. Dealogic data revealed that U.S.-targeted M&A totaled $996.5 billion, the best since 2008 and a 12 percent increase over 2010. This is despite volume actually declining from 9,965 total deals to 9,873.

However, Dealogic also stated that the global dollar value of corporate mergers and acquisitions for 2011 has reached $2.7 trillion, a $.4 trillion decline from 2010. This year was marked by a significant decrease in deal making activity during the last two quarters of the year. Q3 2011 deal value decreased by 23 percent (Read Time to Hit the Breaks? – M&A Activity Slowing down?) while the last quarter was met with a 14 percent decline.

Despite all of this, many economists still believe that 2012 will be an excellent year for mergers and acquisitions. They point out three factors that will spur deal momentum: lower valuation, high corporate cash balance and the capital gains tax amendment which is expected to expire of 2013.

Another factor analysts are looking at is the economic growth itself. With companies unable to grow organically, they may opt to grow through M&A. If not, investors themselves may prompt companies to use up their cash stockpile.

"Value-enhancing cash deployment could benefit U.S. equities with excess capital, stable earnings and conservative coverage ratios," strategists at Bank of America Merrill Lynch said in a note to clients. "With a significant compression in valuations, M&A could be advantageous to both acquirers and acquirees."

With improving visibility and declining volatility, J Morgan Chase sees four scenarios in 2012:

1. M&A activity being more robust in 2012 with cash-rich U.S. corporates and underinvested private equity firms;
2. Flows reversing or stabilizing;
3. U.S. stocks likely to be seen as relative ‘safe havens,’ especially with minimal international exposure by small caps; and
4. Stock repurchase activity increasing with rising cash balances and high (return on equity)

I believe that 2012 will indeed be another great year to buy a business for sale. Companies who wished to sell their business prior to the recession are gaining momentum and posting appealing revenue for buyers to consider. Businesses have all the good cards in hand, to say the least. So if your company didn’t pursue your acquisition opportunities this year, then you should not hesitate to do so in 2012.  Start the year right – register at Corporations4Sale.com today and start searching for the right business for sale for you.

Sources:
http://blogs.wsj.com/deals/2011/12/20/its-nearly-official-the-2011-ma-market-was-terrible/?mod=WSJBlog
http://www.ey.com/GL/en/Newsroom/News-releases/Global-mergers-and-acquisitions-decline-14–in-Q4-2011
http://www.cnbc.com/id/45805366
http://www.privateequityconnect.com/NewsContent.aspx?iid=64945