Paul Weiss Offers M&A at a Glance for April 2020

COVID-19 had a marked impact on M&A in April, extending the decline observed in March across all measures. Globally, the number of deals decreased by 24.2%, to 2,036, and total deal value[1] decreased by 44.3%, to $118.34 billion. U.S. M&A activity also declined, with the number of deals decreasing by 32.2%, to 473, and total deal value significantly decreasing by 69.6%, to $16.60 billion. Significantly, average deal value declined to $58.1 million globally and to $35.1 million in the U.S. (reductions of 26.5% and 55.1%, respectively). Figure 1.

In a marked departure from the norm, no U.S. public deals with an equity value over $100 million were announced in April, marking the first time this has occurred in the history of this publication.  Even at the height of the last financial crisis in 2008, there was not a single month without a recorded transaction in excess of $100 million, the lowest figure previously seen was two deals in December of 2008. The good news is that May has seen at least two deals announced so far, so we look forward to having more to report on in our next issue.

Strategic vs. Sponsor Activity

Strategic and sponsor activity both declined in April. The number of strategic deals decreased by 28.0% to 409 in the U.S. and by 21.6% to 1,876 globally. Meanwhile, strategic deal volume as measured by dollar value decreased by 57.9% to $12.04 billion in the U.S. and by 36.6% to $101.71 billion globally. The number of sponsor-related deals also decreased by 50.8% to 64 in the U.S. and by 45.0% to 160 globally. Sponsor-related volume by dollar value also decreased dramatically by 82.4% to $4.56 billion in the U.S. and by 68.1% to $16.62 billion globally. Figure 1 and Annex Figures 1A4A.

Crossborder Activity

Global crossborder volume also declined in April. The number of crossborder deals fell by 29.5% to 389, while declining in dollar value by 70.0% to $26.04 billion. The number of U.S. inbound crossborder deals decreased by 32.6% to 64 and U.S. inbound activity as measured by dollar value decreased by 53.0% to $2.41 billion. The number of U.S. outbound crossborder deals decreased by 34.0% to 70 and U.S. outbound activity as measured by dollar value decreased significantly by 83.4% to $8.27 billion. Figure 1 and Annex Figures 5A7A.

Canada was the leading country for U.S. inbound activity in April by total dollar value ($0.61 billion) and the U.K. was the leading country for U.S. inbound activity by total dollar value over the last 12-month period ($43.26 billion). Canada retained its lead for U.S. inbound activity by number of deals in April (12) and over the last 12-month period (292).

India was the leading country of destination for U.S. outbound activity in April by total dollar value ($5.79 billion), the first time it has ranked first in this category in 2019 and 2020. The U.K. was the leading country of destination over the last 12-month period ($54.94 billion). The U.K. continued to retain its lead as the leading country of destination for U.S. outbound activity by number of deals, both in April and over the last 12 months (10 and 242, respectively). Figure 3.

U.S. Deals by Industry

Computers and Electronics was the most active target industry in April and over the last 12 months by number of deals (213 and 3,364, respectively) as well as the most active target industry by dollar value in April and over the last 12 months ($7.32 billion and $318.51 billion, respectively). Figure 2.

U.S. Public Mergers

As we noted above, because there were no public U.S. mergers with equity value over $100 million in April, we are unable to report the monthly totals for the statistics in Figures 6-12 and average 12-month numbers do not provide a full picture given the lack of new data.

ENDNOTE

[1] Each metric in this publication that references deal volume by dollar value is calculated from the subset of the total number of deals that includes a disclosed deal value.

All Figures referenced above are available here.

This post comes to us from Paul, Weiss, Rifkind, Wharton & Garrison LLP. It is based on the firm’s memorandum, “M&A at a Glance, May 2020,” available here.