A trawl through Capital IQ's 56-page "
Monthly Market Observations" report for April puts numbers to some M&A trends we knew about and hints at a few others.
We're working here with numbers that compare the 12 months ending March 31, 2007, to the 12 months ending March 31, 2008. Overall deal volume doesn't change that much because of the starting points; it actually goes up in deals with European targets, despite the market's dramatic slowdown in the first quarter of this year. Still, when you start to look at different sectors, things get interesting.
Information technology was the most active sector for North American target deals in the year ending March 31, 2008, when there were $195 billion worth of tech deals announced, compared with $166 billion for the previous 12 months. Think of Oracle Corp. and all those other active tech acquirers. Valuation numbers for tech deals bear out what IBM Corp. CFO Mark Loughridge said earlier this week about
prices easing. For deals greater than $500 million, median valuations notched back a turn, from 17.1 to 16.1 times Ebitda.
Materials deals were the biggest category in Europe, surging from $62 billion to $268 billion. Think of all those mining mergers.
Leveraged buyouts were off sharply in North America, less so in Europe. No surprise there. But things were different in the much smaller category of nonbuyout deals by PE firms. In North America, they rose from $8.7 billion to $14.6 billion, in Europe from $9.3 billion to $22 billion. What were they buying? In North America the biggest category was financial companies. The most recent 12 months saw 58 such deals worth a total of $6.8 billion, up from 17 and $1.2 billion a year earlier. That's a sharp contrast with the overall trend in deals with North American financial company targets. They fell off sharply, from $321 billion to $194 billion. -
Kenneth Klee
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