We have further confirmation that global M&A activity is indeed picking up. According to the Mergermarket Q1 2014 trend report released today, April 1st, global M&A totaled US$599.1 billion in Q1 2014, up a sharp 33.2% from Q1 2013 ($449.6 billion). Furthermore, Q1 2014 global M&A was up 5.7% over Q4 2013, suggesting that this increase in M&A is more than just a temporary spike.
Much of the recent M&A activity has been related to a larger than usual number of “mega deals“. Eight mega-deals worth $166.3 billion were finalized in the first quarter. This represents the most $10 bil+ deals in the first quarter of a year since 13 large deals valued at a total of $315.4 billion were announced in 2006.
ValueWalk's Raul Panganiban interviews Kirk Du Plessis, Founder and CEO of Option Alpha, and discuss Option Alpha and his general approach to investing. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with Option Alpha's Kirk Du Plessis
The mega-deals signed in the first quarter of this year accounted for a 27.8% share of global M&A, compared to $89.2 billion-worth of mega-deals representing a 19.8% share in first quarter 2013.
The average price for a deal in the first quarter was $374.4m, the highest Q1 average since 2009 and an impressive 33% greater than in Q1 2013 ($281.5m).
M&A activity by sector
The technology, media and telecommunications sector saw the most M&A activity in the first quarter at $176.1 billion, up 29.4% from Q1 2013 and the Q1 total deal value since 2006.
The technology sector was red hot. Technology sector M&A totaled $54.3 billion in Q1, the highest total for a first quarter since Mergermarket has been keeping records (2001). That represented a 55.1% increase compared to $35 billion in Q1 2013, and a 23.1% increase from $44.1 billion in Q4 2013.
The pharma sector also saw a major increase in activity. The Pharma, Medical & Biotech sector M&A total of $63.2 billion was more than four times the first quarter 2013 total of $14.2 billion.
Private equity exits soaring
The Mergermarket report also highlights that private equity exits are hitting record-setting levels. “Private equity exits reached the highest valued opening quarter on Mergermarket record (since 2001) at US$ 111.9bn. The average deal size of exits reached the highest value on Mergermarket record for any start to the year in Q1 2014 at US$589.1m, 60.8% higher than the peak for this period in 2008 (US$ 366.3m).”