Q2 PE M&A jumps 40 pct while general mergers drop

Second-quarter deal value rose 40 percent while the number of transactions jumped 17 percent, according to data from Thomson Reuters.

In Q2, 367 U.S. private-equity-backed-M&A deals valued at $47.2 billion were announced, Thomson Reuters said. This compares with 315 transactions valued at $33.7 billion in the year-earlier period.

For the first half, valuations were up 49 percent and the number of deals rose nearly 18 percent from H1 2016. In 2017 through June 30, 745 U.S. PE mergers totaled $79.5 billion. This compares with 634 deals valued at $53.4 billion a year earlier, Thomson Reuters said.

While PE M&A was up, valuations for U.S. mergers dropped 30 percent in Q2, Thomson Reuters said.

In the quarter 3,049 M&A deals totaled $305.7 billion. This compares with 2,887 deals valued at $438 billion in Q2 2016. The number of deals advanced 5.6 percent.

Becton Dickinson’s $24.2 billion buy of CR Bard was the quarter’s biggest M&A deal. Amazon.com’s $13.6 billion buy of Whole Foods Market ranked second for the period, Thomson Reuters said.

Here are the top 5 PE deals for the quarter, according to Thomson Reuters.

1. In first place is JAB Holdings, which in April agreed to buy Panera Bread for $7.49 billion. JAB is the investment vehicle of Germany’s billionaire Reimann family, Reuters said. JAB owns Krispy Kreme and Keurig,

2. Sycamore Partners is one of the rare buyout shops to attempt a retail deal, Reuters reported. In June, Sycamore said it would buy office-supplies chain Staples Inc for $6.9 billion. Some PE firms, like Sycamore, are distinguishing between mall-based fashion retailers, which are vulnerable to changing consumer tastes, from retailers with a niche and rich cash flow, such as Staples, Reuters said. Sycamore’s Staples deal ranks second for the quarter.

3. In third place is Pamplona Capital’s $5.04 billion deal for Parexel International, a pharmaceutical-research-services provider.

4. Ranking fourth is Apollo Global Management’s $4.9 billion buy of West Corp, a U.S. telephone conferencing-service provider. The deal was announced in May.

5. Clayton, Dubilier & Rice last month said it would acquire the Waterworks business unit of HD Supply Holding for $2.5 billion. Waterworks, St. Louis, is a U.S. distributor of industrial and construction products used to build and maintain underground water, wastewater and drainage infrastructure networks.

Action Item: For more on Thomson Reuters M&A data, email Matthew Toole at matthew.toole@thomsonreuters.com

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