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Mergers & Acquisitions

Industry Spotlight - Semiconductors

In the latest sign of continued strength in the mergers and acquisitions market, NXP Semiconductors NV agreed to acquire Freescale Semiconductor Ltd. in a deal valued at $11.07 billion. This is the second time that Freescale has been acquired in the last decade. Freescale has been burdened by a heavy debt load as a result of its previous LBO. The unaffected control premium of 4.18% is significantly lower than the 29.57% average unaffected control premium for semiconductor deals announced in the last twelve months.


U.S. Public M&A Deal Terms
February 2015 Last 12 Months
Ave. 1 Day Premium % 23.6% 28.6%
% of Mergers that are Accretive 64.3% 44.9%
Ave. Target Break Fee as % of Equity Value 3.3% 3.3%
Ave. Reverse Break Fee as % of Equity Value 5.9% 4.5%
% of Mergers that were hostile/unsolicited 15.0% 14.2%

Market Leaders - U.S. Public Mergers

David A. Katz of Wachtell, Lipton surpassed the $100 billion dollar mark advising on public mergers in 2014. Paul J. Shim of Cleary Gottlieb and Cary K. Hyden of Latham & Watkins rounded out the top three leading attorneys on public mergers.

Attorney Firm Equity Value $bil
David A. Katz Wachtell, Lipton, Rosen & Katz 114.0
Paul J. Shim Cleary Gottlieb Steen & Hamilton LLP 81.0
Cary K. Hyden Latham & Watkins LLP 72.5

M&A Adviser Fee Watch

Goldman, Sachs & Co. has maintained the top position in disclosed fees for deals announced in 2014. Morgan Stanley has moved in to second place among financial advisors in disclosed fees. JPMorgan rounded out the top three in disclosed fees. Disclosed fees reached their highest level since the financial crisis, soaring 63.7% over 2013.

High-Yield Bond News

SEC Registered High-Yield New Issue Volume increased in February

The pace of new issuance of SEC registered high-yield new issues rebounded in February with $4.71 billion pricing during the month up from $2.75 billion in January.

High-Yield Bond Covenants

Along with the increase in the level of high-yield bond issuance came a reduction in the level of covenant protection during February. Only one third of SEC registered deals had limitations on restricted payments covenants compared to 41% of new issues priced in the last twelve months. Limitations of indebtedness covenants were also present in only 33% of February's new issues compared to 47% of deals priced in the last twelve months.