This report, published twice a year, provides an update on M&A activity for the first half of 2018, focusing on both global and PNW trends with a focus on transactions with an Enterprise Value (EV) between $10 million and $25 million, our target client size. Our data is sourced from GF Data, PitchBook and other publications.
GLOBAL M&A TRANSACTIONS POINT TOWARDS $5 TRILLION RECORD
Global M&A activity continues at record pace, surpassing $2.5 trillion for 1H 2018 with the potential for $5 trillion by the end of the year. M&A activity continues to be supported by low interest rates, strong corporate earnings, lower taxes, high equity valuations, and favorable lending terms.
Media, energy, healthcare, and technology continue to drive the larger transactions and much of transaction volume. Cross-border deals also accounted for over $1 trillion of transactions. Market headwinds include potential trade wars, regulatory uncertainty, and rising interest rates.
Aggregate Deal Value Trend
Source: The New York Times, A Record $2.5 Trillion in Mergers Were Announced in the First Half of 2018
LOWER-MIDDLE MARKET EBITDA MULTIPLESREMAIN STRONG
The data shows that EBITDA multiples for companies with EV of $10-25 million and $25-50 million remain in-line with long-term trends (YTD 2018 5.7x and 6.7x, respectively).
Larger transactions are demonstrating a significant size premium (YTD 2018 9.2x for EV of $50-100 million vs 15-year average of 7.0x).
EBITDA Multiples
Source: GF Data M&A Report May 2018
Enterprise Value Deal Multiples
Source: GF Data M&A Report May 2018
PNW DEAL VOLUME SHOWS GRADUAL DECLINE
For the first half of 2018, total deal volume for transactions where the target or seller is based in the PNW was 209. This figure is down from 245 for 1H2016 and 234 for 1H 2017.
Pacific Northwest Deal Volume
Source: PitchBook
The three industries with the highest level of M&A activity in the Pacific Northwest during the first half of 2018wereBusiness Services, Technology, and Healthcare.
PNW Deal Activity by Industry
Source: PitchBook
PNW Deal Activity by Investor Type
Source: PitchBook
SELECT 1H 2018 Pacific Northwest M&A TRANSACTIONS – FOCUS ON TRANSACTION SIZE $10 MILLION TO $50 MILLION
