After the Q3 M&A exit market was the weakest of the year, the fourth quarter turned out to be the strongest.
U.S.-based PE-backed exits posted the highest total value since Q4 2017’s $55.2 billion.
All told, sponsors in the fourth quarter closed 123 deals totaling more than $34.6 billion, Thomson Reuters data showed. That compared with 170 deals totaling $24 billion in Q3, 164 deals totaling $30.9 billion in the second quarter and 164 deals generating $28.8 billion in Q1.
Value above 6-year average
The numbers are through Dec. 4, which still leaves several weeks for more growth. The value is above the six-year average ($26.6 billion) but deal count lagged (148).
Of Q4’s 123 exits, 52 had disclosed values, 13 of which crossed the billion-dollar mark.
The largest was Adobe’s $4.75 billion acquisition of software publisher Marketo from Vista Equity Partners.
Coming in second was the acquisition of Siren Holdings Korea, a provider of security systems. An group composed of SK Telecom (55 percent) and a unit of Macquarie Group (45 percent) purchased the company from Carlyle Group for $2.7 billion.
At a close third was the acquisition of Verra Mobility. Gores Holdings paid a total of $2.2 billion to Platinum Equity and other shareholders for the custom computer programming services company.
High technology led for the second straight quarter, accounting for 21 percent of all M&A exits with 26 deals. Next came consumer products and services with 18 deals, or 15 percent. Financials finished third with 13 deals, or 11 percent.
Though PE-backed IPOs had their weakest quarter of the year, 2018 will finish as their strongest year since 2014. The current 2018 IPO total is $12.3 billion raised in public debuts.
The five companies making their debuts on public markets in the fourth quarter combined for more than $580 million.
The largest offering is from Yeti Coolers, which raised $288 million for its IPO. Yeti coolers claim to be bear-resistant, and the company, backed by Cortec Group, makes other outdoor/camping equipment.
As the accompanying “PE-Backed IPO Exits By Quarter” graph shows, the IPO market is erratic, with PE-backed IPOs fluctuating sharply quarter to quarter.
PE-Backed IPO Exits By Quarter
Q4 2018 Buyout Exits Through M&A
Q4 2018 M&A Exits Industry Breakdown