After a banner year for M&A in 2016, deal volume through 3Q 2017 in North America and Europe has declined 23% and overall deal value has dropped 19% from the same period last year. Our 3Q 2017 M&A Report provides analysis into trends of all types, including how transaction metrics like median deal size lend insight into the state of the current cycle.
After two years of massive M&A activity, the pace of consolidation has continued to slow to pre-2015 levels.
Median M&A deal size ($M)
The median M&A deal size has skyrocketed by roughly 66% thus far this year.
M&A activity in North America
This year's M&A activity in North America has totaled $925 billion across 7,348 transactions through 3Q—24% and 23% behind the first three quarters of 2016, respectively.
Median North American EV/EBITDA multiples
Median EV/EBITDA multiples remain the highest ever tracked in North America, edging up to 10.6x.
M&A activity in Europe
European M&A activity has totaled $439 billion across 5,810 transactions through 3Q 2017—20% and 32% behind the same period last year.
Median European EV/EBITDA multiples
Likewise, European EV/EBITDA multiple reached 10.8x for transactions completed in 3Q, bringing the European YTD median to 10x, the highest in our dataset.
M&A activity (#) by target company financing status
The proportion of target companies with institutional backing (i.e., PE or VC) at the time of acquisition has risen to an all-time high of 16.9%. Another 3.8% of targets were publicly traded when the deal was struck, the highest we've recorded since 2009.
M&A activity (#) by deal size
The middle of the market reached a new high for activity.
M&A activity (#) by sector
Dealmaking in IT has remained markedly resilient.
M&A activity in energy, materials & resources
The energy and materials & resources sectors have shown substantial YoY growth, with deal value in the two sectors increasing 122% and 15%, respectively, over the same period last year.
M&A (#) by acquirer type
Financial sponsors accounted for 31.4% of all transactions in 3Q 2017, the highest proportion in our dataset.
PE-backed exit activity (#) by type
Secondary buyouts this year have accounted for 52.6% of M&A transactions involving the sale of a PE-backed company through 3Q 2017, the highest proportion on record.