U.S. public M&A activity remained vibrant in 2016 following the record-breaking deal announcements of 2015. Investment bankers and corporate attorneys set a record for closing U.S. public target deals in 2016 with $697.1 billion in deals closed during the year. Goldman, Sachs & Co. and Skadden, Arps topped the Deal Point Data M&A league tables for completed deals in this key market, closing $346.3 billion and $243.5 billion respectively. New deal announcements totaled a healthy $845 billion in 2016. This represents a 24.4% decline in dollar volume compared to the record-setting volume of 2015. The new year, 2017 is poised to be another busy year for top-tier investment banks and law firms as over $640 billion in U.S. public deal volume was pending as of December 31, 2016.
|Target||Acquirer||Equity Value ($bil)|
|Time Warner Inc.||AT&T||83,618|
|Monsanto Company||Bayer AG||55,916|
|Spectra Energy Corp||Enbridge Inc.||28,275|
|LinkedIn Corporation||Microsoft Corporation||26,175|
|Level 3 Communications, Inc.||CenturyLink, Inc.||25,138|
Wachtell, Lipton, Rosen & Katz was the top ranked legal adviser on U.S. public M&A deals announced in 2016. Sullivan & Cromwell ranked second in the high profile public M&A advisory market.
|Rank||Firm||Equity Value ($bil)|
|1||Wachtell, Lipton, Rosen & Katz||239.2|
|2||Sullivan & Cromwell||206.4|
|3||Cravath, Swaine & Moore||139.8|
2016 M&A advisory fees of $4.0 billion have been disclosed through January 3 down by 22.0% over full year 2015. Goldman, Sachs & Co. led the market with $721 million in fees already disclosed. Morgan Stanley took second place among financial advisors in disclosed fees. JPMorgan rounded out the top three in disclosed fees.
The pace of issuance of SEC registered high-yield new issues rose by 3.6% from 2015's level. This represents a 24.1% decline over the pace of new issuance in 2014.
Once again, the level of covenant protection continued to decrease in 2016. We evaluated the covenants in SEC registered new issues and found that only 29% contained limitation on restricted payments provisions down from 36% in 2015 and 42% for deals priced in 2014. Limitations of indebtedness covenants were also present in only 38% of new issues compared to 39% in 2015 and 47% of 2014's deals.