The first quarter of 2012 resulted in strong middle-market M&A activity, below the rapid pace of activity in 2010 and 2011, but greater than 2008 and 2009. Activity continues to be fueled by a surplus of cash on corporate balance sheets and uninvested private equity capital, along with a favorable tax environment and motivated owners looking to exit businesses. Additionally, valuations for performing businesses have returned to pre-recession levels and are driving some sellers to consider a transaction. There exists a significant divide as high-performing companies and/or companies serving attractive end markets are achieving above average multiples, while underperformers and middle-of-the-road companies are realizing little to no market-driven premium. Baker Tilly Capital continues to see a high level of activity.