Directors & Boards 2012 M&A survey: minimal dealmaking seen immediately ahead, but our board audience foresees brighter prospects at the end of this year for buying and selling -- providing the economy cooperates.

• Position: 2012 M&A SURVEY - Survey

The majority (85%) of public and private company directors responding to the Directors and Boards recent survey on merger and acquisition activity see the current economic recovery as sustainable, but most of those respondents (75%) foresee minimal growth in 2012.

Even in the face of a tepid recovery, or perhaps because of it, 51% of directors foresee slightly to significantly more M&A activity in their primary company's industry by the end of 2012. The reasons for this include "better pricing" or, as one respondent put it, "The more successful companies in every industry are using -- or looking to use -- their improving cash flows to make acquisitions 'on the cheap.'" Another director was more blunt: "Successful organizations are able to buy unsuccessful ones."

Adding to this outlook are the investment needs of the ultra-wealthy. As one director put it: The wealthy want larger returns, and even though the economy will remain weak, there is a lot of money available looking for greater returns. The healthcare sector, for example, needs consolidation and a new delivery model. Merge the two drivers and there should be a lot of activity in biotech, pharma, and durable equipment.

Our study also highlighted the tension between buyers who see opportunities to buy smaller, less well-capitalized companies, and a perceived sense on the sell-side of stronger valuations. "There aren't a significant number of increased opportunities for us," commented a director. "But I do see increased pricing, which benefits sellers."

It will be interesting to see how this tension plays out for the remainder of 2012, as larger, more successful companies look for opportunities among companies that are struggling, and as companies looking for an exit seek to maximize their valuation, all in an election year, and in an economy that, at best, is slowly and somewhat painfully growing.

RELATED ARTICLE: Survey methodology and demographics

This Directors & Boards survey was conducted in May 2012 via the web, with an email invitation to participate. The invitation was emailed to the recipients of the Directors & Boards monthly e-Briefing. A total of 212 usable surveys were completed.

ABOUT THE RESPONDENTS (Multiple responses allowed) A director of a publicly held company 43% A director of a privately held company 50% A director of a nonprofit entity 44% A senior-level executive (CEO, CFO, CxO)of a publicly held 16% company A senior-level executive (CEO, CFO, CxO) of a...