InSight

Exit and Growth Strategies for Middle Market Businesses

2015 1st Half M&A Activity | Part 1

By Kim Levin | Sep 09, 2015

Middle Market Business Insights

After a multiple quarters of strong growth in North American M&A activity, things slowed down a bit in the first half of 2015. Still, a slight dip in activity does not signal an impending downturn, rather a leveling off of what has been a feverish pace. Below is a by the numbers look at H1 2015 according to data published by global research firm Bureau Van Dijk:

  • In the U.S. in H1 2015, there were 6,237 total transactions worth a combined USD $848.58 billion over the six months, compared to 7,664 deals worth a total USD $953.07 billion in H2 2014.
  • In Canada, deal value grew 8 per cent from USD $96.27 billion in H2 2014 to USD $103.53 billion, marking the fourth consecutive increase, despite a decline in volume to 1,890 transactions (H2 2014: 2,125).

Middle Market

In the middle market (deals between $1 million and $500 million) M&A has remained strong, driven by private equity groups looking to deploy capital and strategic companies eager to increase capabilities. Below is a look at the sectors that have experienced the greatest activity:

  • According to data from industry tracker Factset, the sectors that saw the biggest increases in M&A deal activity Q2 2015, relative to the same three month period one year ago, have been: Technology Services (526 vs. 477), Distribution Services (173 vs. 129), Finance (411 vs. 370), Health Services (144 vs. 125), and Communications (42 vs. 30).
  • Over the past 3 months, the sectors that saw the biggest declines in M&A deal volume, relative to the same three month period one year ago are Commercial Services (443 vs. 476), Consumer Services (207 vs. 234), Producer Manufacturing (171 vs. 195), Consumer Non-Durables (68 vs. 86), and Industrial Services (101 vs. 117).



Private Equity

According to Bureau Van Dijk, private equity M&A activity in North America has kept passed with the overall macro trends slowing down as compared to the prior six months. However, while deal volume declined, value per deal increased.

  • In the U.S. in H1 2015, there were 2,650 private equity transactions worth a combined USD $149.47 billion over the six months, compared to 3,119 deals worth a total USD $111.15 billion in H2 2014.
  • While the volume of private equity deals in the U.S. declined, value rose 34%.
  • In Canada, there was a more modest value increase (10 per cent) from USD $3.60 billion in H2 2014 to USD $3.97 billion.

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