Pitchbook recently released their accounting of mergers and acquisitions performance.
Unless the fourth quarter of 2015 falls off the planet, 2015 is set to reach an all-time high in value terms. Overall, if deal value climbs only by the amount it did in the first quarter of 2014, deal value in 2015 will reach about $1.7 trillion, about $200 billion above the 2014 count.
Unsurprising to industry insiders, deal values have exploded over the past few years.
Here’s a look at some of the details.
The Broad Picture
First, here’s a look at the broad picture of the number of deals and deal value, according to Pitchbook.
Overall, deal value in the first, second, and third quarters of 2015 came in at $526 billion, $445 billion, and $437 billion. These figures represent strong increases from where deal value came in at during 2014 through the first three quarters, coming in at $323 billion, $358 billion, and $385 billion.
The strongest quarter was the first quarter of 2015 at a massive $526 billion.
Switching to the number of deals, the number of deals look to have peaked, failing to reach prior periods’ experience.
Through the first three quarters of 2015, the number of deals is at 14,412. This is off slightly from the 15,055 deals the industry did through the first three quarters of 2014.
Source: Pitchbook
Deal Size Breakdown
Shifting now to a look at the M&A data by deal size, shown in the following graphic.
Perhaps the first item that jumps out is the gradual shift towards a preference for larger deals, which peaked in the first quarter of 2015 at over 50% for deals valued at greater than $5 billion.
Fascinatingly, in the first quarter of 2013, it was around 15% of total deal value.
The gain in deal value for deals valued at greater than $5 billion came at the expense of all other deal values, from deals valued at less than $100 million on up.
Source: Pitchbook
Private Equity’s Take of the Overall M&A Action
Lastly, here’s a look at how much of M&A activity is stemming from sponsor-backed (private equity) activity (orange line).
Overall, M&A activity stemming from sponsor-backed private equity has been fairly constant over the past few years, with the most recent click at 26%.
Source: Pitchbook
Conclusion
In looking at the trend in private equity activity through the first nine months of 2015, it’s quite possible that 2015 may turn out to highest M&A activity ever.
If M&A activity comes in at a low $323 billion in value in the fourth quarter of 2015, total deal value in 2015 will reach about $1.7 trillion, about $200 billion above were deal value reached in 2014.
Deals have exploded in value over the past few years, even though the number of deals has not kept up with its value counterpart.
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