North American M&A Value Down in May, Despite Increase in Volume

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PE and VC value declines month-on-month, both volume and value improve year-on-year Zephyr reports on North American M&A and private equity activity in May 2017 - access report

Lisa Wright, Zephyr director

Despite a decline in the value of North American M&A value month-on-month, the fact that the result is up on the same period of last year is undoubtedly positive. So far in 2017, only March has failed to improve on the corresponding month in 2016...

There were a total of 2,003 mergers and acquisitions (M&A) worth a combined USD 128,222 million targeting North American companies announced in May 2017, according to information collected by the leading M&A database Zephyr. Value for the period fell 8 per cent from USD 139,166 million in April despite volume rising from 1,863 last month. Year-on-year, deal volume fell 11 per cent from 2,252, while value increased by 1 per cent from USD 126,636 million in May 2016.

Zephyr shows that although US targets accounted for the bulk of dealmaking in the region in May, the month’s largest deal actually featured a Canadian target as Pembina agreed to acquire Canadian gas pipeline operator Veresen for USD 7,109 million. It was, however, followed by two US deals, namely Sinclair Broadcast’s USD 6,600 million agreement to purchase newspaper publisher Tribune Media and Avantor’s USD 6,400 million deal to take over laboratory equipment supplier VWR, which placed second and third, respectively. Of the month’s top 25 deals by value, 23 had US targets while two featured companies based in Canada.

Partially due to the aforementioned Tribune Media deal, deal value in the publishing and printing sector surged almost four-fold to USD 12,807 million in May, up from USD 3,407 million in April. It also rose significantly from the USD 3,949 million recorded in May 2016. Month-on-month, the machinery, equipment, furniture and recycling industry, which topped the rankings by value in April, saw value plunge from USD 34,902 million last month to USD 11,529 million. However, the sector improved year-on-year, climbing from USD 8,350 million in May 2016.

Lisa Wright, Zephyr director, commented, “Despite a decline in the value of North American M&A value month-on-month, the fact that the result is up on the same period of last year is undoubtedly positive. So far in 2017, only March has failed to improve on the corresponding month in 2016 in terms of North American deal value. This will give many hope that we will be seeing a positive result when the first half of the year comes to an end. Plenty of large deals are being announced in the region, with all of May’s top 20 worth in excess of USD 1,500 million, which should encourage those watching activity levels.”

The Zephyr database shows that the value of PE and VC investment targeting companies based in North America declined in May, despite an increase in volume month-on-month. In all there were 1,226 deals worth a combined USD 33,245 million announced during the four-weeks under review, compared to 1,022 deals valued at USD 39,629 million in April. However, in a year-on-year comparison value was up 37 per cent from USD 24,274 million invested in May 2016, while volume also rose 2 per cent from 1,201 deals over the same timeframe. A significant decline in the value of deals with US targets can account for the overall drop in value month-on-month; in all USD 32,413 million was invested by PE and VC companies into US targets in May, an 18 per cent drop in value from USD 39,508 million in April.

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Colin Stewart
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Press ReleaseNorth America M&A Report May 2017