Acquisition Marketplace Review - The Journal of Applied M & A Theory

M&A MarketPlace pg2

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M&A Activity in 2000 Continues At Record Levels
Mergerstat indicates that deal activity for the first quarter of 2000 has already surpassed the same period of 1999— a record-breaking year. The value of mega-deals through March is ahead of the prior year by $143.7 billion. On the whole, the total number of deals and the aggregate value of announced transactions are also up. The aggregate value of all deals is up by a phenomenal 53%. There were 2,488 announced in the first quarter, an increase of 19%. The value of announced transactions was $495.7 billion, an increase of $171.7 billion. The only segments that did not show growth were transactions in the $10-$24.9 million range, which were off by 23%, deals between $25-$49.9 million, which declined by 14% and deals under $10 million, which were off by 4%. However, the number of deals in which purchase price was not disclosed soared from 1,285 to 1,639, an increase of 28%. It is likely that the lion’s share of undisclosed transactions involves smaller, privately owned companies. Accordingly, middle market activity is probably much more robust than stats on announced deals would suggest. During the first quarter, the percentage of deals involving stock or a combination of stock and cash increased from 56% to 64%. This increase in deals involving stock may be attributed to an increased willingness on the part of sellers to accept stock as a payment currency in light of the overall strength and appreciation of the public equity markets during the end of FY 1999 and the first quarter of 2000. This data does not reflect the impact of market volatility since March.

M&A Growth Slowed In April
The stock and bond market instability that started in March has cooled off the M&A marketplace. While deal activity and aggregate volume are ahead of last year’s numbers, the rate of growth slid during April. Mega-deals were the hardest hit sector. According to Mergerstat data, there were 29 mega-deals in March compared to only 9 in April. On the whole, 768 deals were announced during April. While this is down compared to the sizzling numbers of the first quarter, the M&A market appears to be on track for a strong, if not record-breaking year. Back to Main ~ Sign-Up to Recieve this E-Journal FREE ~ AMR Archives

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