U.S. LBO volume rises 9 pct while M&A drops 19 pct

U.S. announced M&A dropped in 2016, while private equity deal volume rose nearly 9 percent, Thomson Reuters data showed.

There were 715 U.S. announced LBOs valued at $96.19 billion as of Dec. 20, the financial-information service said. This compares with 690 transactions totaling $88.53 billion in the year-earlier period. The number of deals increased 3.6 percent while volume advanced 8.7 percent, Thomson Reuters said.

By comparison, U.S. announced M&A dropped nearly 19 percent to $1.63 trillion spread across 10,030 deals, Thomson Reuters said. In 2015, 10,023 mergers totaled $2 trillion. AT&T’s mammoth $85.4 billion buy of Time Warner was easily this year’s biggest deal.

Christian Atwood, a Choate, Hall & Stewart partner who has advised PE firms and their portfolio companies for 15 years, said 2016 was more about add-ons for PE.

“While there were definitely some very large deals announced in 2016, to me it felt more like a year in which middle-market deal makers were more focused on add-on or tuck-in acquisitions — platform building or enhancement — rather than platform deals per se,” he said.

Because of high prices, 2016 saw firms continue to sell anything that was not nailed down, Atwood said. “It was, and remains, harder to be one of many buyers, and [there was] a lot of money chasing a limited number of high-quality deals,” he said.

High technology remained one of the busiest sectors in 2016, producing 127 deals valued at $37.2 billion, Thomson Reuters said. In 2015, tech generated 111 transactions valued at $29.7 billion.

The top five U.S. announced PE deals are:

1. Apollo Global Management’s buy of ADT, the provider of home and business security systems, landed in first place. Thomson Reuters valued the deal at $12.27 billion.
2. Blackstone’s nearly $8 billion buy of BioMed Realty Trust.
3. Carlyle Group’s roughly $7 billion buy of Veritas from Symantec ranked third.
4. Blackstone’s agreement to buy TeamHealth Holdings for $6.1 billion.
5. Vista Equity Partners in March completed its nearly $6 billion buy of Solera Holdings. 

Action Item: To contact Thomson Reuters’s deals intelligence, email matthew.toole@thomsonreuters.com

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