Merger and acquisition (M&A) activity continued to show strength last month as there was only a slight decline in the number of deals with a slight increase in the amount of spending on deals. Private equity firms in particular slashed their M&A activity in July.
Top sectors increases
According to data compiled by FactSet Mergerstat, there were 1,103 announcements about mergers and acquisitions last month, compared to 1,123 during the month of June.
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The Voss Value Fund was up 4.09% net for the second quarter, while the Voss Value Offshore Fund was up 3.93%. The Russell 2000 returned 25.42%, the Russell 2000 Value returned 18.24%, and the S&P 500 gained 20.54%. In July, the funds did much better with a return of 15.25% for the Voss Value Fund Read More
Overall spending on those deals increased 1.3% month over month, however. (All charts/ graphs in this article are courtesy FactSet Mergerstat.)
Recent data shows that firms which bought on M&A news have benefited so far this year.
Top sectors for declines
The sectors which have recorded the largest increases in M&A deals over the last three months compared to the same three months last year were: Finance, with 427 deals this year (394 last year); Distribution Services, with 175 deals this year (148 last year); Technology Services, with 517 deals this year (491 last year); Retail Trade, at 122 deals (97 last year); and Transportation, at 74 deals this year (56 last year).
The research firm noted that 11 of the 21 sectors it tracks saw relative gains in deal flow year over year for the last three months. Here’s the full list of M&A activity by sector:
Top sectors for declines
FactSet reports that the sectors with the largest declines in M&A activity over the last three months compared to the same three months last year were: Industrial Services, with 101 deals (128 last year); Producer Manufacturing, with 164 deals this year (190 last year); Electronic Technology, with 129 deals this year (153 last year); Commercial Services, with 490 deals (509 last year); and Non-Energy Minerals, with 33 deals this year (40 last year).
The firm also reported that ten of the sectors its analysts track saw negative relative losses in deal flow over the last three months compared to the same three months last year. Overall, FactSet Mergerstate found a combined decline of 121 deals year over year.
Aetna – Humana M&A deal the largest
FactSet compiled a list of the biggest M&A deals announced during July, and Aetna’s offer to buy Humana topped the list at $34.1 billion. Other deals on the list were Visa’s offer to buy Visa Europe for up to $20 billion and Coty’s offer to buy Procter & Gamble’s Beauty Brands business at $12.5 billion. Here’s a full list of the most expensive deals so far this year.
Private equity firm M&A activity plunges
Interestingly, M&A activity among private equity firms accounted for much of the decline in deal announcements in July. PE firm activity fell 19.2% month over month, with 97 deals announced in July and 120 the month before. Also FactSet reports that the aggregate base equity fell 62.6% to $13.2 billion, compared to the total of $35.1 billion in June.
International companies gobbling up U.S. firms
FactSet Mergerstat also found that during July, Canadian companies were the biggest buyers of U.S. companies, with 32 deals from Canadian companies announced during the month. In second place was the U.S., with 21 deals, and then France and India. The biggest deal to buy a U.S. business was Switzerland-based ACE Limited’s deal to acquire The Chubb Corp., which was worth $28.2 billion.
U.K.-based companies were the largest sellers to U.S. companies, clocking 38 deals. In second place was Canada, while Australia was in third. The biggest deal by a U.S. firm to acquire an international company was Visa’s deal to buy Visa Europe, which is based in the U.K.