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Mergers & Acquisitions

U.S. Public M&A Activity – 3rd Quarter Review

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 Leaders - Top Investment Banks for U.S. Public M&A
Industry Sector Top Ranked Firm ($ bil)
Technology Qatalyst Partners 52.9
Healthcare Evercore Partners 47.6
Industrial Goldman, Sachs 13.4
Financial Services Goldman, Sachs 18.8
Energy RBC Capital Markets 32.6
Consumer Goods BofA Merrill Lynch 64.8
Retail Barclays 5.9
Deals announced Jan 1, 2016 to Sept 30, 2016

Market Leaders - U.S. Public Mergers

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
Announced Morgan Stanley 142.3
Closed Goldman, Sachs 47.8

M&A Adviser Fee Watch

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.

High-Yield Bond News

New Issue Volume

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.

High-Yield Bond Covenants

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.