The 2014 trend of high value deals continues, according to a recently released Mergermarket Monthly M&A Insider report on global M&A activity. Through the month of October, the aggregate value of deals worldwide for the year has surpassed the last year’s total. Volume, on the other hand, still has some way to go before matching 2013 totals.
Geographically speaking, Europe saw the highest volume of transactions year-to-date, by a very small margin over North America (35.5% of global volume vs. 35.4%, respectively), but European deal values were comparatively lower, with European deals accounting for 22.6% of global deal value, while North American deals accounted for slightly more than half of the global aggregate. On the global scale broken down by industry sector, Energy, Mining & Utilities dominated the value breakdown, accounting for 18.9% of the total, followed by Pharma, Medical & Biotech and the Industrials & Chemicals sectors. Industrials & Chemicals is also the busiest sector year-to-date, having seen 18.9% of the total volume worldwide, followed by the Technology (12.2%), Consumer (12.1%) and Business Services (at 11.9%) sectors.
The picture did not differ greatly in North America. As noted by Mergermarket, both value and volume were up year-over-year for the month of October as compared to 2013 (US$ 88.3 billion compared to US$ 67.1 billion, and 362 total deals compared to 317 deals, respectively). Similarly, year-to-date value through October has also surpassed 2013 totals (and by a significant margin). The North American year-to-date volumes are coming up close to matching the annual total for the last year, but aren’t quite there yet. Notably, thus far higher-value deals have also accounted for slightly more of the year’s North American deal volume as compared to 2013.
Broken down by industry sector, the year-to-date experience in North America has been very similar to the global picture discussed above. Energy, Mining & Utilities is also the sector that saw the most value in the region (at 23.2% of total), followed by Pharma, Medical & Biotech (14.9%) and Consumer (11.3%) sectors. In fact, according to the Mergermarket data, of the top 10 announced North American deals for the month of October, five were in the Energy, Mining & Utilities sector (albeit two of the five were to an extent related). Industrials & Chemicals was the leading sector by volume, followed by Technology, and rounding out the volume lead were Energy, Mining & Utilities and Business Services.
In global private equity trends, both buyout and exit values year-to-date have exceeded 2013 totals. In North America, exit values were greater year-to-date than the total for 2013, but buyout values have not yet surpassed 2013 totals. Mergermarket noted that value of exits decreased year-over-year for the month of October by 30.8% compared to 2013. However, in terms of volume, we have seen a higher number of exits year-to-date in the region than in all of 2013.