Merger and Acquisition activity in the second half of 2013 was in a “strikingly similar position” to the same period in 2012, says mergermarket’s latest report on dealmaking. Value declined 3.3% year-on-year (YoY) to USD 1.2tn, while volume edged up 3.2% to 7,177 deals. Exit activity increased globally in the latter half of 2013 by 19% YoY by volume to 910 deals. Value paints an “equally encouraging” picture, increasing 11% to USD 161.9bn over the same period.
Trade sales were on the upswing, giving secondary buyouts a bit of competition on the exit front. Analysts said that because private equity firms typically look to sell for premiums in order to recoup their initial investments, this trend points to corporates being in better financial positions, or being more bearish about the prospects of transformative acquisitions, than they were in previous months.
The report highlighted Sysco Corporation’s USD 8.2bn announced acquisition of US Foods from Clayton, Dubilier & Rice and Kohlberg Kravis & Roberts. The deal sees the two firms exiting their initial investment of USD7.2bn in 2007. Outlook for 2014 is not showing an uptick in exit activity yet but dealmaking trends suggest that private equity firms are seeing returns on their pre-crisis investments, and are in an increasingly strong position to re-invest capital over the coming month. (Image source: mergermarket)