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Midmarket M&A growing, yet lenders remain cautious about economic growth

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Midmarket M&A growing, yet lenders remain cautious about economic growth

A dynamic, yet mixed, marketplace.

Despite signs of improved economic conditions, market participants express reserved optimism about the economy and investing, according to a recent report released by middle market investment banking firm Brown Gibbons Lang & Company.

The report documents clear positive investor activity – merger and acquisitions are in growth mode; corporate buyers are back in the game; lending appears strong; deals, albeit smaller, show increased interest and competition.

"It is a pretty dynamic market. There is a record amount of private equity capital waiting to be deployed, and corporate buyers are back in the market and very active," said Brent Burgess, the chief investment officer at Triangle Capital, one of 33 firms that participated in the report.

"It is a pretty dynamic market."The report reflects both the optimism and the skepticism of industry experts. Capital providers say trends in the financing markets mirror those observed in 2007, raising concerns that we may be reaching a peak in the cycle.

"I don't think the inflow of capital will change. I don't anticipate a material spike in defaults because the economy seems to be improving," said Preston Walsh at PNC Mezzanine Capital. "We are keeping a close eye on inflation, interest rates, and the state of the economy—whether we actually have some sustainable growth."

 

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