Merger and acquisition activity nationwide in 2010 was something to cheer about for the first time in years, a new report by William Blair & Co. shows.

The Chicago-based financial services firm said M&A activity rose for the first time in three years, with the total number of U.S. deals rising 32 percent, to 12,271, and the dollar volume rising 25 percent, to $1.097 trillion.

Middle-market activity was even stronger, with the deal total up 46 percent and the dollar volume up 52 percent, to $358.3 billion. The strongest middle-market segment was for deals between $250 million and $750 million.

“We expect the favorable momentum to continue into 2011,” William Blair said.

It cited such factors as higher corporate profits, more optimism among company executives and a rallying stock market.

As the stock market has rebounded, public companies increased their share of M&A deals nationwide, using their stock as currency. But private equity firms will also be getting more active due to the increased availability of debt financing, and committed but un-invested capital of more than $400 billion.

All 14 industry sectors showed an uptick in dealmaking in 2010, with technology and health care the most active. The overall average disclosed deal size nationwide was $174 million.

In the M&A world, the number of U.S. private equity deals rose 22 percent and the dollar volume rose 64 percent, William Blair found. Computers and electronics remain the buyout industry’s most active sectors in the number of deals announced.

Hostile takeovers are also becoming more prevalent, Blair found.

byerak@tribune.com