Despite an increase in M&A activity over the past three months, deal trends in February 2018 retreated towards their 12-month averages, following banner months in November and December, both of which featured some of the largest deals we have seen in the last year. In the U.S., deal volume by dollar value decreased by 52.1% to $82.61 billion, the second-lowest level of the preceding 12‑month period, and the number of deals decreased by 21.5% to 716. Globally, deal volume decreased by 10.5% to $295.03 billion and the number of deals decreased by 20.1% to 2,639 (a 12-month low).
Although still a minority of M&A transactions, appraisal actions are on the rise. In 2012, 20 transactions involving Delaware-incorporated target companies were challenged, but in 2016, this number increased to 48, representing a 240% bump in four years. Further, these figures do not include transactions where appraisal demands were settled before the 120-day deadline for filing an appraisal petition.
With this recent uptick in appraisal litigation, private equity firms should understand the associated risks for, including some that may be unique to PE deals. Recent Delaware decisions and anecdotal perceptions (real or otherwise) have suggested that private equity-led buyouts may … Read more