Dealmaking Continued at an Encouraging Rate
Submitted by Acuris, a partner of the M&A Leadership Council
Mergermarket, an Acuris company, has released its Global M&A roundup for 2018, including its financial advisors league tables, and with so many market-moving factors fluctuating throughout the year, mergers and acquisitions have understandably had a somewhat ambivalent 2018.
Take a look at the report HERE and don’t forget to review the charts breaking down the activity by sector, value, year-to-year analysis, etc.
A couple key findings include:
- Intensifying trade tensions, political instability, and increased regulatory scrutiny took their toll on the number of deals struck over the year, which fell for the first time, however slightly, since 2010 to 19,232 after steadily rising for close to a decade. The transactions that did make it to the signing table reached US$ 3.53tn worth of activity, ranking 2018 as the third-largest year on Mergermarket record by value. Average deal size consequently saw its second-highest total value on record with US$ 384.8m, just below the US$ 400.3m peak reached in 2015
- As companies felt the pressure to consolidate, fueled by a need for greater equity value, firms often found themselves competing for the choicest targets, pushing up valuations. Comcast’s eventual US$ 51.5bn Sky takeover was a case in point where the Pennsylvania telecoms giant ended up paying considerably more than its starting offer in an effort to beat rival bidder Twenty-First Century Fox. Further, the continued availability of cheap financing due to historically low interest rates in the post-crisis period aided much of the capital needed to fund bidding wars, particularly in the private equity space. Ahead of expected interest rate rises, global buyout activity reached US$ 556.6bn, its highest total in a decade and 3.7% more than 2017’s US$ 536.7bn. Buyouts also achieved their highest-ever deal count – 3,599 – breaking the previous record of 3,530 set in 2017. Meanwhile, sponsors exited the second-highest number of investments on record, registering 2,450 compared to a peak of 2,592 in 2017. Moreover, 2018 reached the highest total exit value ever of US$ 551.5bn