The U.S. posted flat growth in its M&A activities during the first half of 2013, despite seeing a few blockbuster deals during the first quarter.
According to ‘Deal Drivers America’ data published by Mergermarket in association with Merrill DataSite, the first half data doesn’t throw much light on the direction that M&A deal making might turn.
Corsair Capital highlighted its investment in a special purpose acquisition company in its first-quarter letter to investors. The Corsair team highlighted FG New America Acquisition Corp, emphasizing that the SPAC presents an exciting opportunity after its agreement to merge with OppFi, a leading fintech platform powered by artificial intelligence. Q1 2021 hedge fund letters, conferences Read More
Amanda Levin of Mergermarket feels the U.S. will continue to drive M&A deal activities for the rest of the year.
U.S. tops regional charts
The data collating M&A deal making activity in North America and Latin America reveals the first half of 2013 had seen 32 deals for companies valued at over $2 billion, encompassing a variety of industries including TMT, Energy, Consumer, Transportation and Life Sciences and Healthcare.
However, the first half had seen only 79 deals valued between $251 million and $500 million in the middle market, which is much below the pace of the last three years.
The data highlights the largest deal for the Americas relates to the purchase of H.J. Heinz Company (NYSE:HNZ) by Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) and 3G Capital, who agreed to pay $27.4 billion.
U.S. Heat Chart
‘Deal Drivers America’ report also highlights the following ‘Heat Chart’ that serves as a barometer of potential deal flow in specific regions and sectors across the Americas. The Heat Chart is an assimilation of ‘companies for sale’ written during the first half of 2013.
The chart highlights during the first half of 2013, 5,038 companies were covered, representing a small decrease from 5.740 posted during the same period last year. However, the first half performance is a tad 2 percent better than 4,941 stories covered during the second half of 2012.
TMT – A Major Driver
Throwing light on the sectoral performances, the report highlights deals from companies in the Technology, Media and Telecommunication sector was the major driver of M&A during the first half. The deals marked legacy brands and battles for ownership of companies such as Virgin Media Inc. (NASDAQ:VMED), Dell Inc. (NASDAQ:DELL) and NBC Universal. These deals catapulted TMT among the rare industries to outperform H1 2012 M&A deal.
Despite falling short of expectations, the industries and chemicals sector did well during the first half, representing 17 percent of all deal volume.
Aided by a handful of bulge bracket deals such as Heinz, the consumer sector recorded the third highest M&A deals in terms of value.
Though analysts highlight a poor global M&A market with activity ramping down in several regions and sectors, the increase of 10 percent posted by U.S. in its M&A deal value should boost the confidence of dealmakers from the second of half of 2013 onwards. The report particularly exudes confidence that the second half of 2013 should look favorable for M&A across most sectors.