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Mergers & Acquisitions

2015 Sets Record for M&A Activity

M&A activity involving U.S. public targets hit the highest level ever in 2015. According to research compiled by Deal Point Data, $1.1 trillion in U.S. public deals were anounced in 2015. The dollar volume of U.S. public deals that reached a definitive agreement soared to an all-time high of $1.01 trillion, up 57.29% over 2014. Despite the record level of activity, the market was much more diverse than during the 2007 merger boom. In 2007, activity was fueled by going private deals which accounted for ~ 31% of all agreed deals. Also, in 45.6% of deals announced in 2015, the buyers have indicated that the deal is expected to be accretive to earnings within twelve months of closing the transaction.

Big and Fast in 2015 - $ 10Bil Deals Completed in Under 100 Days
Target Equity Value ($bil) Days to Close*
Kraft Foods Group, Inc. 52.6 99
Pharmacyclics, Inc. 19.8 83
Salix Pharmaceuticals, Ltd. 11.1 38
Regency Energy Partners LP 10.0 94
Four of seven all time "Big and Fast" deals were announced in 2015. * From date of announcement

Market Leaders - U.S. Public Mergers

Skadden, Arps, Slate, Meagher & Flom was the top ranked legal adviser on U.S. public M&A deals announced in 2015. Skadden became the first law firm ever to advise on over $300 billion in U.S. public deals.

Rank Firm Equity Value ($bil)
1 Skadden, Arps, Slate, Meagher & Flom 372.2
2 Wachtell, Lipton, Rosen & Katz 264.5
3 Cravath, Swaine & Moore 233.9

M&A Adviser Fee Watch

2015 M&A advisory fees of $4.8 billion have been disclosed through January 13 up by 30.8% over 2014. Goldman, Sachs & Co. led the market with $795 mil in fees already disclosed. Morgan Stanley took second place among financial advisors in disclosed fees. JPMorgan rounded out the top three in disclosed fees.

High-Yield Bond News

New Issue Volume

The pace of issuance of SEC registered high-yield new issues fell by 26.6% from 2014's level. This represents the lowest new issue volume since 2011.

High-Yield Bond Covenants

The level of covenant protection continued to decrease in 2015. We evaluated the covenants in SEC registered new issues and found 36% contained limitation on restricted payments provisions down from 42% for deals priced in 2014. Limitations of indebtedness covenants were also present in only 39% of new issues compared to 47% of 2014's deals.