Strategic acquirers drive huge quarter for M&A value in 1Q
May 12, 2016
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Even amid market volatility, strategic acquirers had a blockbuster 1Q, making over $435 billion in deals across North America and Europe—the second highest total on record—according to our 1Q 2016 M&A Report. Corporations have sought to pursue transformative deals as value increased for the third consecutive quarter, while volume again moved lower. Generous corporate cash piles and public valuations combined with a low organic growth environment and cheap debt have resulted in favorable conditions to grow through acquisition. Here are a few key data points from the report:
Corporate acquirers accounted for 84% of acquisition value, the highest post-crisis level
Add-ons made up 59% of buyouts, another recent record
The median size of add-ons halved QoQ to $35.3 million
In short, the current environment has created a bifurcation in the M&A market. Strategics have the cash and cap space to pursue big deals, while financial sponsors have instead opted for buy-and-build strategies given credit market volatility and future counterparty risk when it comes time to exit.