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Expect big deals in 2013, says BDO

CHICAGO — If the folks at BDO are to be believed, the OfficeMax/Office Depot merger will be just one of many potential deals forged in 2013.

According to a new survey from the advisory firm, nearly all retail CFOs (94%) expect merger and acquisition (M&A) activity will increase or remain steady in 2013. CFOs’ bullish forecasts follow $324.6 billion in global retail and consumer M&A activity in 2012, which was up 33% over 2011 and the busiest year since 2007, according to Dealogic. A majority of CFOs (68%) expect the U.S. markets to see a majority of deal volume, followed by the Asia-Pacific market (20%) and Latin America market (7%).

Retail CFOs also forecast robust IPO activity in 2013. Following 13 U.S. retail public offerings in 2012 (according to Intrepid Investment Bankers), a vast majority of CFOs (83%) expect to see more or about the same number of retail IPOs this year. When asked what the biggest driver of a company’s ability to go public in 2013 is, CFOs point to the strength of the U.S. economy and stock market (42%), as well as strength of brand (24%) as top factors.

“In terms of overall M&A transactions, we’ve seen the fastest start to the year since 2005, and retail looks to be a bright spot for deal-making this year,” says Stephen Wyss, partner in the Retail and Consumer Products practice at BDO USA, LLP. “Steadier markets, renewed interest in international growth and the desire for omni-channel capabilities are fueling the investment rebound in retail and consumer businesses.”

These findings are from the seventh-annual BDO Retail Compass Survey of CFOs, which examined the opinions of 100 chief financial officers at leading retailers located throughout the country. The retailers in the study were among the largest in the country. The survey was conducted in January and February of 2013.

 

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