Monthly M&A Insider: November 2014

21 November 2014

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The value of global M&A deals through the end of October has surpassed aggregate 2013 numbers and deal sizes have skyrocketed during the year given the many large-cap and transformative transactions. The biggest deal for October is the almost US$12bn acquisition of New Jersey-based medical equipment company Becton, Dickinson and Co. of San Diego-headquartered medical technology company CareFusion Corporation. CEO confidence in the M&A market has boosted the number of these mega transactions in 2014.

Highlights include:
 
  • In Latin America, the average deal size of US$379m is the highest since Q1 2010 when it was US$624m, a 26.8% increase from the average deal size in Q3 2014 of US$299m
  • North American M&A value for October ended with a total of 362 deals worth US$88.3bn, a year-on-year increase of 31.6% by value and 14.2% by volume from last year
  • Industrials & Chemicals still remains a popular investment space in Asia-Pacific. In October, the sector recorded 52 deals to make up 23.1% of the market share at a value of US$9.4bn

Latin American M&A Spotlight 2014

03 December 2014

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The 2014 Latin American M&A Spotlight report, published by Greenberg Traurig LLP in association with Mergermarket, reveals a cautious optimism for Latin American M&A. Despite the uneven economic growth rates, respondents continue to expect an increase in Latin American M&A activity over the next 12 months.

The 2014 Latin American M&A Spotlight examines the opinions of Latin American-focused investors and corporate executives who offer their perspectives on the region’s M&A environment. This report looks at the region’s cross-border and intra-regional M&A activity by analyzing the most active countries and sectors in the context of current challenges while identifying new investment opportunities.

Some key findings from the report include:

  • 62% of respondents believe annualized economic growth in Latin America will be in the 3% to 4% range over the next year
  • Eighty-six percent of respondents believe that acquisitions by strategic investors in Latin America are likely to be the most common type of transaction over the next 12 months, followed by acquisitions by financial sponsors (54%)
  • Intra-regional M&A is poised to grow over the next 12 months as more than half of survey respondents (52%) expect a significant increase in M&A involving Latin American companies transacting with one another

Deal Drivers Africa

04 December 2014

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Mergermarket is pleased to present the third edition of Deal Drivers Africa, a comprehensive review of African M&A, published in collaboration with ENSafrica, Nedbank Capital and Control Risks. Based on interviews with 100 M&A practitioners operating in Africa, this report provides invaluable insight into the African M&A market from those who know it best.

Highlights from the report include:

  • M&A between Africa countries quadrupled year-on-year (YoY) to US$13.5bn, as volume edged up 3% YoY to 99 deals. The bulk of African domestic M&A took place in Nigeria and South Africa, with a combined value of US$7.9bn, or 59% of total African domestic deal value.
  • Fifty-three percent of survey respondents expect dealmaking to increase significantly over the next 12 months.
  • Private equity (PE) buyout volume rose 11% to 21 deals in the first three quarters of 2014, while value grew 7% YoY to US$1.3bn. Exits exhibited a similarly positive trend: while there were only eight exits in the first three quarters of 2014, value jumped 75% YoY to US$654m.
  • Natural resources M&A activity declined 25% YoY in volume to 30 deals, and 79% YoY in value to US$4bn, due in part to sluggish economic growth in markets such as China and India.

A greater yield: Attracting investment into Australian agribusiness

10 December 2014

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Australian agribusiness is poised to benefit tremendously from changing consumer tastes across Asia and globally. The ability to meet this demand will require a steady investment flow from foreign and domestic financial investors.

Highlighting this trend, Australian law firm Allens and Mergermarket proudly presents an analysis on investment opportunities in Australia’s agriculture in this exclusive report, A greater yield: Attracting investment into Australian agribusiness. Tackling a variety of topics in the agribusiness space in Australia, this report features an in-depth look at the country’s competitive advantages and disadvantages, financing solutions and potential funding models, as well as infrastructure and research and development needs.

Highlights from the report include:

  • Proximity to markets was the main attraction for investing in the Australian agribusiness sector, while climate variability was by far the greatest disincentive for investing in the sector.
  • 53 per cent of respondents said the traditional family-owned farm was not an appropriate model for Australian agriculture. Of those respondents, 56 per cent pointed to the lack of scale due to capital and manpower restraints.
  • 59 per cent of investors would consider a financing model for investing in Australian agribusiness, while 45 per cent would prefer the joint venture model.
  • 45 per cent of respondents said that research & development needed the most urgent government attention, followed by irrigation infrastructure.

Asia-Pacific M&A Barometer Issue 3

17 December 2014

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Ascent Partners and Mergermarket proudly present this newsletter on M&A trends in Asia-Pacific.  Our current issue recaps M&A activity, as well as private equity buyouts for Q3 2014 showing an increase in volume and value. Deal values regionally totalled approximately US$142bn with 847 deals for Q3 2014, exceeding Q3 2013, which had 766 deals worth US$130bn.

Additional highlights illustrated by proprietary Mergermarket data for Q3 2014 include:

  • Top three sectors by deal volume were: industrials & chemicals (21%); technology (15%); and business services (11%);
  • 55% of the region’s deal volume was in transactions valued below US$50m, while 38% was in the middle market range (those deals valued between US$51m and US$500m);
  • Private equity buyout values rose to US$27.1bn in Q3 2014, compared to US$17.1bn in Q3 2013.

Aviation, Aerospace & Airports M&A Quarterly Q3 2014

17 December 2014

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The third quarter of 2014 was a busy time for M&A across all three sectors according to the fifth edition of Aviation, Aerospace & Airports M&A Quarterly, published by global consulting firm ICF International in association with Mergermarket.

Highlights include:

  • Aviation M&A was largely driven by deals in the Asia-Pacific region
  • Private equity was drawn to specialist aerospace testing firms in Q3
  • Germany and Italy provided the backdrops for investment activity in the airport sector

2014 Canadian Goodwill Impairment Study

18 December 2014

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Mergermarket is pleased to present the third edition of the Canadian Goodwill Impairment Study in association with Duff & Phelps. The study presents an analysis of the overall developments and challenges in recognizing goodwill impairment (GWI) in Canada and includes a survey of 50 Canadian financial executives across a wide variety of industries.

Highlights from the report include:

  • The $8.9 billion of goodwill impaired by Canadian companies reporting under IFRS in calendar year 2013 was a notable increase (12.7%) from the $7.9 billion amount seen in 2012
  • A majority of respondents (56%) indicated that projecting cash flow is one of the most considerable challenges pertaining to goodwill impairment
  • Seventy-two percent of survey respondents recognized goodwill impairment in 2013. The survey results thus demonstrate that Canadian companies have seen a rise in goodwill impairments as only 16% of public companies and no private companies recorded an impairment in 2012

Market Spotlight: 2015 Deal-making Outlook

18 December 2014

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Deal-making activity is expected to rise in 2015, according to research conducted by Mergermarket.

In this month’s Venue® Market Spotlight, brought to you by RR Donnelley in association with Mergermarket, research shows different types of deal-making, ranging from global M&A to IPOs, will experience an increase in the upcoming year.

Monthly M&A Insider: December 2014

19 December 2014

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As the M&A market comes very close to year-end, there are some regional trends that are noteworthy in terms of global dealmaking activity. One such highlight is North America’s dominance in terms of deal value in 2014 – YTD North American M&A deals have reached US$1.4tn, comprising 48% of the total value of global M&A deals. Europe however, saw the highest share of deals among all regions raking in 5,266 transactions worth US$792bn.

Highlights include:

  • Latin American YTD deal value for 2014 totaled US$123.7bn compared to US$88.3bn during the same time last year
  • The top North American deal involved Actavis’ acquisition of Allergan, owner of Botox, for US$63.1bn
  • In Europe, a total of US$800.5bn worth of deals were signed YTD, a 37.7% increase on the same period last year and above any year since 2008

Monthly M&A Insider: H2 2014

26 January 2015

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M&A activity for 2014 surpassed previous years’ figures in terms of total number of global transactions. Last year there were 16,588 deals compared to the next highest year, 2007, that saw 16,060 deals. Many factors contributed to these hyper elevated levels of dealmaking to include the overall improvement of the economy that gave CEOs the confidence needed to execute deals and significant cash piles companies accumulated throughout the crisis.
 
In looking at the year ahead, the big question for dealmakers becomes whether the positive momentum of deal flow last year will continue throughout 2015.
 
Highlights include:
 
  • In Latin America, the most active sector was Consumer with 66 deals totaling US$4.3bn.
  • The top deal of H2 2014 was Actavis’ US$63.2bn acquisition of Allergan in the Pharma, Medical and Biotech sector.
  • Goldman Sachs topped the North American Financial Advisers League Table by volume and value with 136 deals worth US$381.2bn in H2 2014, a 30.5% increase in value from H2 2013 (US$292.1bn)

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