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M&A at a Glance (April 2015)

April 15, 2015 download PDF

The global and U.S. M&A markets showed renewed growth in March 2015, in both overall deal volume and number of deals, owing largely to sponsor-related transactions.  After three months of decline, March's global volume climbed by 40.9% to $353.6 billion, nearly returning to the relatively high levels last seen in November 2014.   While the number of global deals increased only slightly, the average deal value increased by 32.0% to $230.5 billion.  The volume of global sponsor-related transactions increased by 216.0% over last month to $128.1 billion; a monthly volume 95.6% larger than the 2014 average of $65.5 billion.  Figure 1.

The U.S. market saw even more pronounced growth.  Total U.S. volume rose 63.6% to $189.4 billion, and U.S. average deal value rose 73.5% to $637.7 million.   The volume of sponsor-related transactions increased by 547.7% over last month to $97.2 billion; a monthly volume 242.3% larger than the 2014 average of $28.4 billion. Healthcare was the most active U.S. target industry by volume in March 2015 ($52.3 billion) and continues to hold the number one spot over the last 12 months. In contrast, by number of deals, Computers & Electronics led the field both for March 2015 and over the last 12 months.  Figure 2.

With respect to inbound U.S. crossborder transactions, the Netherlands took the top position by deal volume ($16.7 billion), while Canada maintained its top spot by number of deals (33).  Canada took the top position for outbound U.S. crossborder transactions with $4.4 billion in volume, and maintained its lead by number of deals (35) in March 2015.  Figure 3.

The largest U.S. public merger in March 2015 was the H.J. Heinz Company $45.8 billion offer for Kraft Foods Group, Inc. This was the fourth largest public merger in the past 12 months.  Four of the top five deals in March 2015 topped $10 billion (although the offers for two of these deals, the acquisitions of The Macerich Company by Simon Property Group, Inc. and Salix Pharmaceuticals, Ltd. by Endo International Plc., were subsequently withdrawn). Figure 5.  Average reverse break fees dropped from 5.9% in February 2015 to 5.1% in March 2015, and for only the fourth time since this publication began tracking this metric in May 2013, average reverse break fees for mergers involving strategic buyers were larger than average reverse break fees for mergers involving financial buyers.  Figure 7.  After two months without a go-shop provision in U.S. public mergers, three out of the 16 deals in March 2015 (or 18.8%) had go-shops and, interestingly, all such go-shop deals involved strategic buyers.  Figure 8.  The incidence of tender offers in March 2015 increased to 43.8% from 23.1% in the month prior and well above the 12-month average of 24.7%.  Figure 11.

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