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Mergers & Acquisitions

U.S. Public Deal Activity - 3rd Quarter Review

M&A activity involving U.S. public targets hit its highest YTD level since before the financial crisis. According to research compiled by Deal Point Data, $785.3 billion in high profile public deals have been announced through the end of the third quarter. This level outpaced 2014 volume by 15.24%. Despite the major equity averages posting the worst quarter in four years, the number of new announced deals rose by 9.09% while dollar volume declined by 8.33% from the second quarter of 2015. Along with the new announcements, $210 billion in deals closed during the quarter up 56.5% from the second quarter. The average time to close was 134 days compared to 127 in the second quarter. Morgan Stanley led the third quarter U.S. public financial adviser's league table, with $102.5 billion in deals.

U.S. Public M&A Deal Terms
3rd Quarter 2015 Last 12 Months
Avg. 1 Day Premium % 39.4% 30.6%
% of Mergers that are Accretive 36.7% 40.5%
Avg. Target Break Fee as % of Equity Value 3.51% 3.55%
Avg. Reverse Break Fee as % of Equity Value 5.53% 5.53%
% of Mergers that were hostile/unsolicited 10.0% 12.4%

Market Leaders - U.S. Public Mergers

Morgan Stanley was the top financial adviser on U.S. Public M&A deals announced in the third quarter of 2015.

Rank Firm Equity Value $bil
1 Morgan Stanley 102.6
2 Goldman, Sachs & Co. 83.3
3 Citi 56.0

M&A Adviser Fee Watch

M&A advisory fees of $3.02 billion have been disclosed year-to-date through the 30th of September compared to $1.9 billion at this point last year. Goldman, Sachs & Co. led the market with $549 mil in fees already disclosed. JP Morgan took second place among financial advisors in disclosed fees. Morgan Stanley rounded out the top three in disclosed fees.

High-Yield Bond News

3rd Quarter High-Yield New Issue Volume

Driven by the global equity and energy markets, the pace of issuance of SEC registered high-yield new issues fell by 82.8% compared to the second quarter. This represents the lowest new issue volume since Deal Point Data began tracking this data in January 2010.

High-Yield Bond Covenants

Through the end of the third quarter, the level of covenant protection continued to decrease. We evaluated the covenants in SEC registered new issues and found 38% contained limitation on restricted payments provisions down from 42% for deals priced in 2014. Limitations of indebtedness covenants were also present in only 41% of new issues compared to 47% of 2014's deals.