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Ahead of the pack: US M&A 2019

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While global M&A fell in 2019, the US forged ahead, maintaining its year-on-year value and taking a greater share of the global deal market


Despite a fall in overall global dealmaking, M&A in the US has proved resilient, as megadeals and domestic activity boost the market

It has been a busy year for M&A involving US companies. While global deal value dropped compared to 2018, the US maintained its year-on-year total and took a greater share of the overall deal market. 

Confidence in the US economy and the opportunities it offers companies for growth and investment led to a market driven by megadeals (valued at US$5 billion or more), with the life sciences and TMT sectors leading the way. Indeed, a full 58 percent of the US$1.5 trillion worth of deals involving US companies qualified as megadeals, up from 47 percent in 2018. And nine of the top ten deals for 2019 were domestic, suggesting that US corporate executives see plenty of opportunity in their home market.

Last year was also characterized by a growing breadth of M&A market participants. Private equity (PE) remained active, buoyed by strong fundraising and high liquidity in the debt markets. Family offices continued their expansion into direct deals. And sovereign wealth funds, many of which had pulled back from direct investing, returned to M&A markets, with the US as a target.

Rising stock markets and competition for deals led to further increases in company valuations in both public and, in particular, private markets. Many corporates opted for deals involving stock consideration to mitigate high pricing, while PE players sought smaller platforms through which to execute buy-and -build strategies as well as hunting opportunity in taking public companies private. These trends suggest that dealmakers are proceeding with confidence but also caution when it comes to pricing. 

Talk of a downturn has been muted somewhat as we head into 2020—at least regarding the first half of the year. Economic growth will settle at 2.1 percent, according to the Conference Board. Unemployment is predicted to remain low, and financing for deals will continue to be widely available and low cost. However, with a presidential election in November, as well as ongoing headwinds such as trade wars and unrest in the Middle East, there is no room for complacency.

US dealmakers steer a steady path through global headwinds

As the rest of the world backed away from the deal table, confident US corporates continued buying businesses—especially in the life sciences and TMT sectors, and particularly in the domestic market.


Private equity stands its ground in 2019

In line with the wider US M&A markets, PE deals held firm through 2019 with 1,329 buyouts, worth US$208 billion, representing a decline of 9 percent by volume, but just a 4 percent fall by value relative to 2018.

New York City

Sector watch

Sector overview: Tech and healthcare take the top spots

In terms of value, the technology and healthcare sectors—separately and, sometimes, in tandem—have ruled the M&A markets in 2019. Meanwhile, the consumer industry faced tough times—though there could be a rebound in 2020.


SaaS, cashless and convergence drive tech to the top

Technology continued to be among the most active subsectors for US M&A in 2019, with 1,138 deals announced worth a total of US$206 billion. This represents a marginal decrease of 3 percent in volume and 7 percent in value compared to 2018 activity.

Circuit board

Consumer deals fall but disruption may be a driver

Restructurings and uncertainty are hitting the US consumer sector. Retail M&A deal volume dropped 11 percent year-on-year to 459 deals, while deal value dropped 36 percent to US$76.87 billion.

Shopping Trollies

Real estate deals build on very solid foundations

The trend for megadeals in US real estate continued in 2019, with 38 transactions in the sector, worth a total US$56.6 billion—but overall deal volume was down 17 percent and deal value fell 25 percent year-on-year.

Fire escapes

Biotech boosts US healthcare M&A in 2019

The healthcare sector (incorporating pharma, medical and biotech) has seen M&A valued at US$256.5 billion across 645 deals in 2019. This is a decrease of 9 percent by volume, but an increase of 121 percent by value.


Pricing and pull backs affect oil & gas M&A in 2019

M&A in the US oil & gas sector slowed in 2019, with 190 deals worth US$158 billion, down 38 percent in volume and 45 percent in value, mirroring steep declines in global M&A in the industry.

Oil Fields

In Focus

Sustainability is an increasing focus for global M&A

Dealmakers are placing more emphasis on sustainability in the context of their investment practices. This is occurring despite a lack of US federal regulation on companies’ sustainability reporting.

Offshore Wind Turbine

Key dealmaking decisions from Delaware and New York

We focus on two H2 2019 rulings that could affect M&A transactions in the future.

New York Court House


Five trends that could move the M&A needle in 2020

After a solid 2019, the foundations are in place for a strong start to the M&A year in 2020. The following factors are likely to heavily influence the market in the months ahead.

Wall Street

Meet our Partners

Global M&A Leaders

John Reiss

John Reiss
Partner, New York

Gregory Pryor

Gregory Pryor
Partner, New York

Chang-Do Gong

Chang-Do Gong
Partner, New York

Darragh Byrne

Darragh Byrne
Partner, Frankfurt, Stockholm

John Cunningham

John Cunningham
Partner, London

Alexandre Ippolito

Alexandre Ippolito
Partner, Paris

Allan Taylor

Allan Taylor
Partner, London

Baldwin Cheng

Baldwin Cheng
Partner, Hong Kong SAR

New York City

Private equity stands its ground in 2019

In line with the wider US M&A markets, PE deals held firm through 2019 with 1,329 buyouts, worth US$208 billion, representing a decline of 9 percent by volume, but just a 4 percent fall by value relative to 2018.

4 min read

PE remained resilient in 2019, despite a drop-off in the second half of the year. The first six months were particularly impressive, with buyout volume keeping pace with H1 2018. Funds kept moving on deals, particularly as interest rates remained low and credit availability is high, with private credit funds increasingly providing flexible—and larger—financing packages for PE-backed deals. This has driven ever-larger fundraisings: Average sizes of US private debt funds have risen to more than US$1 billion since 2016, when they were just under US$700 million, according to Preqin statistics.

Funds and gains

At the same time, PE funds have also been raising significantly larger funds than in the past. Blackstone, for example, broke a record by raising US$26 billion—the largest PE fund ever—as investor capital increasingly concentrates at the larger end of the fund spectrum. Preqin figures for 2018 show that 62 percent of the US$426 billion was directed toward funds of US$1billion or more and that the ten largest funds accounted for almost a quarter of this. PE dry powder has reached US$1.54 trillion at the end of June 2019, a record high.

Competition heats up

US$208 billion

The total value of 1,329 PE buyouts in 2019

Dry powder and available credit are underpinning continued deal activity by PE houses, but they do not have the market to themselves. Strategies remain active and increasing numbers of family offices are seeking to complete direct deals (see page 6). Sovereign wealth funds are also returning to the US, among other markets. Investors such as Singapore's GIC have recently led or co-led deals and the Qatar Investment Authority was, early in 2019, reported to be increasing its US exposure to approximately US$45 billion over the next two years.

However, PE remains an attractive option for sellers wishing to roll over some of their equity to benefit from upside, as well as those not wishing to divulge commercially sensitive information to competitors.

Increased competition for deals has had an inevitable impact on valuations. EBITDA multiples in the US reached an average of 12.9x in September 2019, compared with 11.5x in December 2018, according to PwC figures. Many larger sponsors have tried to mitigate high entry prices by fishing for deals in the mid-market and pursuing buy and build strategies. This strategy should endure, as it enables PE-backed companies to benefit from synergies and therefore potentially pay more for assets. Yet competition has become fierce in this part of the market too and multiples are also rising. Valuations of US M&A deals in the US$100 million to US$250 million range have increased markedly: from an average of 9.0x for 2017 to 10.7x in the year to September 2019, according to Capital IQ.

Public-to-private on the rise

Rising private company multiples are making public company valuations more attractive for PE. As a result, the market has seen public-to-private transactions find favor once more with PE firms. Hellman & Friedman, for example, led the acquisition of publicly listed human capital software group Ultimate in May 2019 for US$11 billion. Meanwhile, drugstore group Walgreens Boots Alliance is reported to be in talks with PE firms about a US$70 billion take-private in what would be the largest-ever buyout.

In the club

Club deals have also re-emerged as PE firms seek to team up to spread risk and pursue larger targets. One recent example of this is the US$4 billion buyout of healthcare consultancy Press Ganey Associates by Leonard Green & Partners, Ares Management, GIC and others.

Indeed, the largest buyout deal of 2019—the US$14.1 billion buyout of communications infrastructure provider Zayo Group—was also completed by a consortium, led by Digital Colony Partners, EQT and Stonepeak Infrastructure Partners.

TMT takes pole position

The Zayo deal helped boost the value totals for TMT buyouts for the year to US$73.8 billion, although volumes were also high, with 380 deals recorded, to make the sector the most active for PE firms. TMT has become an increasingly popular target for PE, as the technology subsector has matured and as firms seek to capitalize on the digitalization and technological transformation occurring across sectors. Vista Equity Partners, for example, raised the largest-ever technology-focused PE fund, with US$16 billion, earlier in the year.

Energy, mining and utilities was the second most popular sector for PE by value, with deals totaling US$39.9 billion across 44 buyouts. However, a substantial proportion of this asset class was accounted for by IFM Investors' US$10.2 billion acquisition of midstream logistics player Buckeye Partners.

Where's the exit?

With private company valuations riding high, PE houses are taking the opportunity to realize their investments, with 1,069 exits recorded in 2019, valued at US$253.8 billion. This is a 3 percent increase in value and a fall of 9 percent by volume, compared to 2018. With dry powder at record levels, secondary buyouts remain a popular exit route, while IPOs are possible for the right businesses. PE firms are also taking advantage of strong leverage supply to complete recapitalizations and return cash to investors ahead of an exit.

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