According to research compiled by Deal Point Data, $139.6 billion in M&A deals involving publicly traded U.S. targets were announced in the third quarter. This represents a 48.4% decline in dollar volume compared to the third quarter of 2015. The number of new deals announced declined a moderate 6.3% while the average deal size plunged by 45% to $2.3 billion during the quarter. Along with new deal announcements, $189.1 billion in deals closed during the quarter down 12% compared to the same period last year. Through the first nine months of 2016, $578.3 billion of publicly traded target deals were announced, a 26.6% decline over the record pace set in 2015. During the first nine months of 2016, 17.4% more deals closed totaling $578.6 billion, up 6% over 2015.
|Industry Sector||Top Ranked Firm||($ bil)|
|Financial Services||Goldman, Sachs||18.8|
|Energy||RBC Capital Markets||32.6|
|Consumer Goods||BofA Merrill Lynch||64.8|
|Deals announced Jan 1, 2016 to Sept 30, 2016|
In the first nine months of 2016, Morgan Stanley led the market on U.S. public M&A deals with definitive agreements. Morgan Stanley also earned the top ranking based on overall announced deals. Goldman, Sachs took top honors in the closed deals category through September.
|Category||Top Ranked Firm||Equity Value ($ bil)|
|Definitive Agreement||Morgan Stanley||141.4|
M&A advisory fees of $2.7 billion have been disclosed year-to-date through September 30 compared to $3.02 billion at this point last year. This represents a 10.6% decline in fee revenue. Goldman, Sachs & Co. led the market with $542 mil in fees disclosed. Morgan Stanley took second place among financial advisers in disclosed fees. Qatalyst Partners climbed to third place up from a fifth place ranking for all of 2015.
S.E.C. registered high-yield bond new issue volume increased 30.8% to $49.8 billion compared to the first nine months of 2015. However, the pace of new issuance stalled in the third quarter declining by 39.8% compared to the second quarter.
During the third quarter, the level of covenant protection decreased. We evaluated the covenants in S.E.C. registered new issues and found only 11% contained limitation on restricted payments provisions down from 28% for deals priced in the last twelve months. Limitations of indebtedness covenants were also present in only 16% of new issues compared to 36% of all deals priced in the last twelve months. Poison pill puts were included in 58% of new issues down from 73% over the last twelve months.