Midwest merger and acquisition activity in the past quarter continues to reflect a strong deal-making environment, according to the latest analysis by Bridgepoint Merchant Banking.

The Bridgepoint Midwest M&A Index rose substantially to 103.3 to end the fourth quarter of 2014. On a year-over-year basis, the index decreased 13.0 percent from the year-ago quarter. The strength of the index in the latest quarter indicates that Midwest M&A activity remains at healthy levels.

The number of merger/acquisition transactions involving Midwest companies increased to 175 deals in the fourth quarter, compared with 159 transactions in the third quarter. Transactions with Midwest companies as acquisition targets increased by nearly 39 percent to 161 in the fourth quarter, “which reiterates the strong buyer appetite for Midwest companies,” the report said.

The report tracks selected merger and acquisition transactions in Iowa, Kansas, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

Valuations are at all-time highs in many sectors and are elevated across the board, fueled by high demand but low supply for quality deals, said Matt Plooster, managing principal of Bridgepoint at the firm’s Lincoln, Neb. office. The market is also experiencing record buyer cash stockpiles and easy buyer access to debt with historically aggressive terms, he said, so M&A professionals expect strong valuations and increasing corporate confidence to continue to drive deal volumes into 2015.

“Our private equity and lender contacts are consistently reporting large quantities of capital chasing too few deals,” Plooster said. “It’s a great time to be a company in the Midwest and a tougher time to be a private equity firm or institutional lender.  We expect this window to remain open over the near-term, while longer-term headwinds could impact valuations and capital availability. The time is now for Midwest companies.”