Daily News: December 8, 2014

M&A Middle Market Momentum to Continue in 2015

Ernst & Young member firm EY Divestitures says the dynamics that made 2014 a record year for U.S. deal making will continue into the new year. Industries poised for activity include: technology, life sciences, healthcare, consumer products and financial services

According to EY Divestitures, the dynamics that made 2014 a record year for U.S. deal making will continue into the new year, pointing to ongoing buoyancy for the M&A market in 2015.

EY said U.S. deal volume rose 5.1% in 2014, with 10,889 deals compared to 10,360 in 20132. Meanwhile, value soared to $1.6 trillion in 2014, up 40.7% from $1.1 trillion in 2013. This trend is likely to stay on course; 81% of executives expect the deal market to improve in the next 12 months, while 41% of US companies have five or more deals in their pipeline versus just 8% of companies six months ago.

EY notes that U.S. deal value was affected by a surge in high-profile megadeals. In 2014, 228 deals were worth between $1 billion and $10 billion, up 37.3% from 166 deals in 2013. Additionally, 21 deals were valued at $10 billion or more in 2014, up 75.0% from 12 such megadeals in 2013.

On a global level, EY said the U.S. was involved in nine of the 10 largest deals in 2014. Moreover, the U.S. was the most targeted country in 2014, with 1,210 inbound deals worth $234.8 billion.

“2014 saw the U.S. deal market get back to where it was headed prior to the sustained 2008 financial crisis,” said Rich Jeanneret, EY Americas vice chair, Transaction Advisory Services. “Based upon continued confidence and strong dynamics which include low interest rates, an improving economy, and robust corporate earnings, we expect deal growth to stay strong in 2015 and to draw out the middle market. Set against the global backdrop of post-crisis rebalancing and a divergence in performance across countries and industries, the U.S. has proven to be ahead of the curve.”

To read the EY report, click here.