1Q21 Global M&A Report with legal league tables

07 April 2021

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Mergermarket, the leading provider of M&A data and intelligence, has released its 1Q21 report which revealed that the first quarter of 2021 reached USD 1.16tn in transactions, surpassing even red-hot 2018 and 2019, making 2021 the most active annual opening on record. Large deal values but fewer deals have led to the highest average deal value since 2006 of USD 518.7m (based on 2,243 deals with disclosed deal values).
 
 
  • Cross-border deals were a significant contributor to overall activity, hitting a record of USD 516.6bn for first quarter activity and nearly returning to historical averages of more than 45% of total deal value. The two largest deals announced in the quarter were cross-border deals that involved US targets: AerCap Holding’s USD 31bn bid for GE Capital Aviation Services and the planned USD 28.6bn merger of Canadian Pacific Railway and Kansas City.
 
  • North America, dominated by the US, reached its highest market share in 14 years netting 54.4% of global deal value, up from 48% in 4Q20. It is a marked turnaround from 2Q20 when North America plunged to 21.5%. North America’s gain came at the expense of all other regions. Save the Middle East, all other global regions lost market share. APAC ex Japan saw its market share decline to 14%, down significantly from its 37.2% share in 2Q20.
 
  • The US was also home to more than two-thirds (USD 137.8bn) of the USD 200.9bn in global IPOs in 1Q21, according to sister product Dealogic. There were 398 IPOs in the US compared to 762 worldwide. Overall, global IPO activity in 1Q21 reached nearly two-thirds of the value of all 2020 activity (USD 319.5bn on 1,592 IPOS).
 
  • Special purpose acquisition companies (SPACs) played a large part in the overall increase in IPO activity and, particularly, in the US. Year-to-date, more than USD 97bn has been raised by 304 SPACs globally, the figures showed. The SPAC surge may take hold in Europe as an increasing number of the specialized vehicles are coming to market. M&A tied to SPACs has also been spiking, with 99 deals totalling USD 219.5bn taking place globally in 1Q21, eclipsing all of 2020, Dealogic data shows. The average deal value for SPAC transactions was USD 2.2bn for the quarter, up from USD 1.2bn in 2020.
 
  • The rising buying power of SPACs may be one factor in the rise of deals in the USD 2bn to USD 5bn range. Such deals have jumped from 19.5% of all deal value in 4Q20 to 23.6%, USD 274bn on 91 deals. Deals greater than USD 5bn in value, which surged in the latter half of 2020, declined in absolute and relative terms. Deals greater than USD 5bn represented more than 44.5% of all deal value in 2H20. In 1Q21, such deals declined to 36.4% (USD 423.4bn on 46 deals).
 
 
Mark Druskoff, Data-Driven Content Coordinator (North America) at Mergermarket commented: “Carrying forward the momentum of 4Q20, global merger and acquisition activity turned in a strong first quarter performance. While many themes crossed over into 2021, such as the technology sector’s dominance and the continued strength of private equity, some notable shifts did occur in terms of deal size and geographic concentration of deals.”
 

1Q21 Global M&A Report with financial league tables

07 April 2021

Download Publication (2.4 MB)

Mergermarket, the leading provider of M&A data and intelligence, has released its 1Q21 report which revealed that the first quarter of 2021 reached USD 1.16tn in transactions, surpassing even red-hot 2018 and 2019, making 2021 the most active annual opening on record. Large deal values but fewer deals have led to the highest average deal value since 2006 of USD 518.7m (based on 2,243 deals with disclosed deal values).
 
 
  • Cross-border deals were a significant contributor to overall activity, hitting a record of USD 516.6bn for first quarter activity and nearly returning to historical averages of more than 45% of total deal value. The two largest deals announced in the quarter were cross-border deals that involved US targets: AerCap Holding’s USD 31bn bid for GE Capital Aviation Services and the planned USD 28.6bn merger of Canadian Pacific Railway and Kansas City.
 
  • North America, dominated by the US, reached its highest market share in 14 years netting 54.4% of global deal value, up from 48% in 4Q20. It is a marked turnaround from 2Q20 when North America plunged to 21.5%. North America’s gain came at the expense of all other regions. Save the Middle East, all other global regions lost market share. APAC ex Japan saw its market share decline to 14%, down significantly from its 37.2% share in 2Q20.
 
  • The US was also home to more than two-thirds (USD 137.8bn) of the USD 200.9bn in global IPOs in 1Q21, according to sister product Dealogic. There were 398 IPOs in the US compared to 762 worldwide. Overall, global IPO activity in 1Q21 reached nearly two-thirds of the value of all 2020 activity (USD 319.5bn on 1,592 IPOS).
 
  • Special purpose acquisition companies (SPACs) played a large part in the overall increase in IPO activity and, particularly, in the US. Year-to-date, more than USD 97bn has been raised by 304 SPACs globally, the figures showed. The SPAC surge may take hold in Europe as an increasing number of the specialized vehicles are coming to market. M&A tied to SPACs has also been spiking, with 99 deals totalling USD 219.5bn taking place globally in 1Q21, eclipsing all of 2020, Dealogic data shows. The average deal value for SPAC transactions was USD 2.2bn for the quarter, up from USD 1.2bn in 2020.
 
  • The rising buying power of SPACs may be one factor in the rise of deals in the USD 2bn to USD 5bn range. Such deals have jumped from 19.5% of all deal value in 4Q20 to 23.6%, USD 274bn on 91 deals. Deals greater than USD 5bn in value, which surged in the latter half of 2020, declined in absolute and relative terms. Deals greater than USD 5bn represented more than 44.5% of all deal value in 2H20. In 1Q21, such deals declined to 36.4% (USD 423.4bn on 46 deals).
 
 
Mark Druskoff, Data-Driven Content Coordinator (North America) at Mergermarket commented: “Carrying forward the momentum of 4Q20, global merger and acquisition activity turned in a strong first quarter performance. While many themes crossed over into 2021, such as the technology sector’s dominance and the continued strength of private equity, some notable shifts did occur in terms of deal size and geographic concentration of deals.”

Global dealmakers: Cross-border M&A in 2021

24 March 2021

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Mergermarket and Dealogic are pleased to present Global dealmakers: Cross-border M&A in 2021, published in association with Baker Tilly International.

Global M&A was shaken in 2020, however, the impact of Covid-19 may not have been as bad as expected. Deal activity for Q3 and Q4 were among the highest on record as dealmakers spent their way through the crisis. This unprecedented drive helped propel average deal value above that of 2019, averting a lull and more prolonged recovery similar to that in the post-GFC period. As confidence continues to grow, the question arises: Is it onward and upward in 2021?

This report dives into the trends that drove the global M&A recovery through 2020 while looking to future opportunity sectors and markets that hold promise in 2021.

Key highlights include:               

  • Global recovery: M&A rocketed to new highs in H2 2020, closing 122% higher in value (US$2.5tn) and 5% higher in volume (16,700 deals) from H1.
  • TMT leads: Tech-driven M&A led the charge, with the TMT sector accounting for 36% of deal volume and 31% of deal value in 2020.
  • PE scales new heights: Private equity closed out 2020 with one of its highest years since 2007, accounting for an impressive 23% of total global M&A deal value.
  • Outlook 2021: Low interest rates are creating enthusiasm among various buyers to pursue M&A to expand their businesses, however, current optimism hinges on the effectiveness of vaccine programs around the world and potential rising distress in certain markets and industries.

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Investing in CEE: Inbound M&A report 2020/2021

17 March 2021

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Mergermarket and Mazars are pleased to present Investing in CEE: Inbound M&A report 2020/2021. This report offers an overview of investor activity into the CEE region in 2020, looking ahead to the challenges and opportunities for the coming months.
 
Total deal value in CEE rose by 11% in 2020, to a total of €49.2bn, even as the number of deals dropped by 16% compared to the previous year, to 648 transactions. This impressive performance, in spite of the global pandemic, highlights the enduring appeal of the region for investors interested in big-ticket deals.
 
Key highlights include:
 
  • CEE continues to attract a strong and steady flow of inbound investment. International buyers continue to be attracted to the region, accounting for 49% of total deal value – investing €23.9bn – in line with previous years. Meanwhile, cross-border transactions within the region grew to account for 13% of overall value, up from 6% in 2019 – the highest level in the past five years.
  • Private equity (PE) activity flourished amidst the pandemic. PE remained extremely active in 2020, with total disclosed buyout value in the region seeing a 40% year-on-year rise to €3.9bn. PE exits also fared well, with total disclosed value coming to €8.1bn, a 11% rise on 2019.
  • Four countries continue to dominate the market. The top four countries in deal value terms remained the same as in 2019 – Russia, Poland, the Czech Republic, and Austria. The region’s biggest market, Russia, accounted for four of the year’s ten largest transactions. Meanwhile, the biggest deal of the year took place in Austria, the most affluent of the CEE markets. This deal saw Austrian oil company OMV increase its stake in petrochemicals company Borealis from 36% to 75% for €5.712bn.
  • Looking forward, CEE is well-placed to be one of the global centres for M&A. Having weathered 2020 so well, investors are likely to continue looking towards CEE as the global dealmaking environment stabilises.

Creative Deal Structures: Energizing the M&A Market Post-Crisis

10 March 2021

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Mergermarket is pleased to present Creative Deal Structures: Energizing the M&A Market Post-Crisis, published in association with Sidley Austin LLP.

Creative structures have become increasingly important in bridging the gap between sellers’ expectations and buyers’ willingness to pay. Based on interviews with 150 respondents from US corporates and private equity firms, this report analyzes the ways in which M&A is moving forward in spite of the pandemic.

Key findings from this report:

  • 63% of respondents who use alternative structures say more of their recent deals have incorporated such mechanisms than has historically been the case. Among private equity firms, the figure was 68%.
  • The proportion of private equity firms expecting to be involved in SPAC-related transactions is significantly higher (69%) than among corporates (31%).
  • Among respondents likely to use alternative deal structures, energy, mining & utilities and industrials & chemicals were the sectors where they expected the most use.

Clearwater International Multiples Heatmap: Q4 2020

23 February 2021

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Unquote is pleased to present the Clearwater International Multiples Heatmap, published in association with Clearwater International. The report identifies key themes driving European Private Equity (PE) deals’ EV/EBITDA multiples on a quarterly basis.
 
In this issue:
  • European overview: A strong performance in the second half of the year meant that any drop-off in activity was not as pronounced as was first feared, with 2020 deal value and volume falling by just 5% and 6% year-on-year, respectively. At 11x, average multiples paid in PE-backed transactions across Europe reached a new high in the final quarter of the year.
  • Spotlight on France: With a strong rebound in dealdoing after the Q2 2020 lockdown, the French PE market remains the busiest in Europe – and deal-hungry sponsors with deep pockets should ensure processes remain heated in the coming months.
  • Consumer sector focus: As investors shift their focus on defensive assets, the consumer sector saw both a sharp increase in activity and a rise in average pricing as 2020 drew to a close.

Ireland M&A Review FY 2020

22 February 2021

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Mergermarket and William Fry are pleased to present the Ireland M&A Review. This report provides a comprehensive overview of developments in the Irish M&A market during 2020 and offers insight into likely trends in the coming months as economies worldwide continue to confront uncertainty brought about by COVID-19.
 
Key findings include:
  • Ireland’s M&A market posted impressive figures in spite of the ongoing impacts of COVID-19. Irish deal value rose by 14% year on year, while volume remained in line with 2019 figures, coming to a total of 169 transactions recorded worth €9.1bn in 2020. In contrast, the overall European deal market recorded a 17% decline by volume, and a relatively modest 3% increase by value.
  • Inbound activity continues to bolster the Irish M&A market. Total inbound volume reached a new record of 121 deals (worth €8.8bn) in 2020 – a rise of 6% by volume and 16% by value from the previous year. The top 20 deals of the year were all inbound cross-border transactions.
  • A number of key sectors saw strong performances in 2020. The TMT sector continued to dominate Irish M&A in 2020, both in terms of volume (25%) and value (22%). Business services also performed well, accounting for 21% of value and 17% of volume. In contrast, the government lockdown particularly impacted the leisure and tourism industries, as Ireland witnessed a sharp decline in consumer spending.
  • As vaccination programmes are gradually rolled out worldwide, a renewed boost to Irish M&A is expected in 2021. The Irish economy is already showing signs of a positive recovery after being hit hard by Covid-19 in the first half of the year. This activity is anticipated to continue, and Ireland is one of just two European economies expected to return to pre-pandemic levels of growth by the close of 2021.

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Baltic M&A Monitor 2021

11 February 2021

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Mergermarket is pleased to present the Baltic M&A Monitor, in association with Ellex. This report provides analysis of M&A activity in 2020 in Estonia, Latvia and Lithuania, along with forecasts for the year ahead.
 
The Baltics collectively recorded 70 M&A deals worth almost €1.2bn in 2020. These relatively small, open European economies were, of course, affected financially by the COVID-19 crisis. However, swift and decisive government action kept businesses going and underpinned investor confidence in the region.
 
Key findings include:
 
  • Estonia accounted for 41% of M&A deals overall by volume. These figures are barely changed from the year before, suggesting that 2020’s headwinds have affected the Baltic countries fairly equally.
  • Lithuania logged total deal value of €154m, a 64% decrease from 2019’s €434m. However, the aggregate was still above 2018, when just €43m worth of deals were announced. This indicates many investors were willing to go through with significant acquisitions despite the challenging circumstances, and bodes well for 2021 as postponed transactions recommence.
  • Latvia, although contributing the smallest share of M&A among the three Baltic nations, relatively speaking enjoyed the strongest year in dealmaking. Aggregate value leapt to €453m (the highest sum of the decade) across a total of 13 deals from 2019’s €345m on 12 deals. The country contributed the largest transaction of the year in the Baltics, with the Latvian government injecting €250m into airBaltic.
  • TMT was the top sector for dealmaking in 2019/20 in both volume and value terms. It accounted for 20% of all transactions – up from 17% in 2017/18 – and 31% of total deal value, up from 9% in 2017/18. It contributed three of the six biggest Baltic deals in 2020, including the second and third largest, as well as three further top-14 deals.

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