DealCloserBlog Roundup December 19
This week features 2014 M&A highlights (including top market segments leading the surge), 2015 M&A outlook, and a 2014 ModelOff competition recap.
19 December 2014
Welcome to your guide on the most interesting M&A, corporate development, alternative investments and debt capital markets news and events.
Because you can’t follow all of the dealmaking updates, we do it for you. Each week we will share the top stories featured on our blog to catch you up to speed. Check these out …
- The surge in 2014’s mid-market deal volume and value suffered a Thanksgiving hiccup, notes Mergers and Acquisitions. November saw only 164 M&A deals (worth $21.7 billion), compared to October’s 249 deals totaling $29.4 billion in value. But given the performance of the first 11 months of the year (2,203 deals worth $293 billion), 2014 should still set post-recession records for both volume and deals.
- And one of the 2014 market segments leading the surge is health care (including the pharmaceuticals, biotech, and medical device sectors), says an Associated Press article. For a variety of reasons (such as cheap cash and a hot stock market) this sector is very active, doing $438 billion in M&A globally so far this year. That accounts for 14 percent of 2014’s M&A overall total of $3.2 trillion.
- Speaking of the high value of 2014’s completed deals, the M&A that didn't close totaled $573 billion in value, notes Forbes, or about 21 percent of all proposed deals. The article cites four reasons for these failed transactions:
- Statistical probabilities — it’s typical that 10-20 percent of all proposed M&A fail.
- Changes to tax inversion laws (check out the Burger King-Tim Hortons deal).
- The targets see the hot M&A market and want to hold out for a better offer.
- Shareholders sometimes balk when the deal is announced — this often leads to a drop in stock price and gives third parties a chance to jump in.
- And on a positive note, dealmakers are expecting to see more M&A activity in 2015, says CFO magazine. Citing a recent Mergers & Acquisitions magazine-KPMG survey, the article claims that 82 percent of respondents expect their firms or clients to attempt at least one acquisition next year. (Last year, only 63 percent of respondents made that prediction.) Generally, valuations for deals will rise, too, with dealmakers aiming for transactions running from $250 million to $1 billion in value.
- And for those of you financial modelers, the ModelOff championships are now over. The finalists pitted their speed, imagination, and data and risk judgment capabilities against one another, live, in front of a judges panel. Diarmuid Early of Deutsche Bank took home first prize. Congratulations to all of the winners and finalists.
Thanks for reading. Stay tuned to our blog each week for more highlights.
Marc Songini has worked in the information technology field for more than 16 years. His roles have included those of journalist, analyst, and marketing communications specialist. He admits that when he started out as a cub high tech reporter, Netscape was still rocking the industry with a wondrous new user interface called a “browser.” During his 10 years with International Data Group (IDG), Marc wrote for NetworkWorld and Computerworld, both award-winning magazines. Marc specializes in cloud, enterprise apps, and figuring out the meaning of being human in an automated world.