| Jan 15, 2010 |
Many life sciences companies are likely to execute an acquisition in the next 12–24 months as economic conditions improve, according to Why capital matters, a global survey of senior executives in the life sciences sector conducted by Ernst & Young in 2009. Respondents believed 2010 would offer many transaction opportunities and a strong majority of respondents rated the outlook for merger and acquisitions as "favorable" or "very favorable" during the next 12 months.
Despite growing optimism, however, Ernst & Young warn in a press statement that the "lingering effects of the financial and economic crisis will present life sciences companies with unique challenges in 2010", which will necessitate an even stronger emphasis on effectively managing and deploying capital. Although M&A activity is expected to accelerate, some would-be acquirers will be unable to participate because of the impact of the downturn. Others will have to re-evaluate how they structure and fund their transactions.
More than 60% of respondents said they would like to take advantage of deal opportunities that arise, but more than half of this group added that they would be "restricted" in their ability to properly execute a robust transaction — partly because of concerns in accessing and deploying capital. Additionally, although 46% of respondents foresee an increase in distressed asset sales in the next year, only 28% feel they are well-positioned to execute a deal quickly. (Ver más...)
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