The M&A market was mixed in April 2015, after what had been a strong March. Although the global M&A market strengthened in April 2015 for the second consecutive month, the U.S. M&A market, and sponsor-related transactions in particular for both the global and U.S. markets, generally declined. Global volume, as measured by total dollar value, increased in April 2015 from March 2015 to $415.29 billion (a 15.9% increase), driven by an increase in global strategic and crossborder transactions. U.S. volume decreased 19.3% to $153.98 billion, and the number of U.S. transactions also decreased 15.8% to 744.
The decline in the U.S. and global M&A markets was driven more significantly by fewer and relatively smaller sponsor-related transactions. The global M&A market saw a sharp decline in the volume and average value of sponsor-related transactions in April 2015, falling 60.4% and 43.4%, respectively. The U.S. market saw an even stronger decline in such measures, with the volume of U.S. sponsor-related transactions dropping 70.5% to $28.64 billion and the average value of U.S. sponsor-related deals dropping 48.4% to $795.6 million. Figure 1.
Healthcare was the most active U.S. target industry by volume in April 2015 ($11.26 billion), followed by Computers & Electronics ($21.90 billion) and Real Estate/Property ($9.9 billion). Healthcare continues to be the most active U.S. target industry by a wide margin for the last 12 months ($434.47 billion in deal volume with Computers & Electronics the next most active U.S. target industry at $170.52 billion in deal volume). Figure 2.
Crossborder volume enjoyed a noteworthy month. Global crossborder volume increased significantly in April 2015 by 75.2% to $216.44 billion (the highest figure since this publication began in April 2012), as did inbound U.S. crossborder volume (increasing by 88.9% to $63.48 billion). These increases were driven in part by the Teva Pharmaceutical Industries, Ltd. offer to purchase Mylan N.V. (announced on April 21, 2015). Despite the upward crossborder volume trend, the overall number of global and inbound U.S. crossborder deals declined by 12.8% and 18.1%, respectively, in April 2015. Figure 1.
With respect to inbound U.S. crossborder transactions, Israel took the top position by deal volume ($51.52 billion), while Canada maintained its top position for the highest number of deals (34). Israel's deal volume rose primarily due to the Teva Pharmaceutical/Mylan offer. France took top position for outbound U.S. crossborder transactions with $4.82 billion in volume, while Canada had the highest number of outbound U.S. crossborder transactions (43). Figure 3.
The largest U.S. public merger in April 2015 was the $5.08 billion offer for Informatica Corp. by Permira Advisers LLP and Canada Pension Plan Investment Board. Figure 5. Average reverse break fees rose to 10.6% in April 2015, compared to 5.2% for the last 12 months. This increase was primarily due to the 24.9% reverse break fee recorded in respect of Blackstone Group L.P.'s offer to acquire Excel Trust, Inc, which was significantly higher than the other three deals with reverse break fees in April 2015. Figure 7. Two of the ten U.S. public mergers in April 2015 contained go-shop provisions, resulting in an increase in the percentage of U.S. public mergers with go-shop provisions (20%, compared to 5.2% for the past 12 months). Figure 8. Finally, we note that there were no hostile/unsolicited offers in April 2015, compared to 12.8% for the last 12 months. Figure 12.
Click here to view the PDF.