According to research provided by Deal Point Data, $209 billion of new M&A transactions involving U.S. publicly traded targets were announced in the first half of 2017. This represents a 52.96% decline in dollar volume over the same period last year. In this big deal market, there was a striking lack of big deals announced during the first half, with only one new deal announced valued over $20 billion. Overall, the pace of new announcements accelerated during the second quarter, with $126 billion in new deals announced representing a 51% increase compared to the first quarter. As equity valuations expanded, large cap technology M&A came to a virtual halt during the first half, with only one new deal announced valued over $1 billion. Goldman, Sachs & Co. topped the U.S. public financial adviser’s league table with $91.3 billion in new deals. Among legal advisers, Skadden, Arps, Slate, Meager & Flom was the market leader with $60.6 billion in deals announced through June 30.
|H1 2017||H1 2016|
|Avg. Unaffected Control Premium %||31.98||42.93|
|Percentage of Deals That Were Accretive||35.2||35.9|
|Avg. Multiple of Reverse Break Fee to Target Break Fee||1.68||1.52|
|Financial Buyers as % of $ Volume||17.5||9.5|
|Hostile/Unfriendly Deals as % of $ Volume||2.9||21.8|
Skadden, Arps was the top ranked legal adviser on U.S public M&A deals announced in the first half of 2017, advising on $60.6 billion in 14 new deals in the high profile public M&A advisory market.
|Rank||Firm||Equity Value ($bil)|
|1||Skadden, Arps, Slate, Meager & Flom||60.6|
|2||Wachtell, Lipton, Rosen & Katz||56.8|
|3||Kirkland & Ellis||53.6|
Through the end of June, $1.29 billion in U.S. advisory fees have been disclosed on deals announced in the first half of 2017. Goldman, Sachs led the market in disclosed advisory fees with $207.9 million. Bank of America Merrill Lynch ranked second with $133.4 million and Morgan Stanley rounded out the top three market leaders.
The pace of issuance of SEC registered high-yield new issues declined in the first half of 2017 by 21.7% in dollar volume. During the first half of 2017, $29.3 billion in SEC registered high yield bonds came to the market in 48 new issues.
The level of covenant protection weakened during the second quarter, reversing the improvement made during the first quarter. Deal Point Data evaluated the covenants in SEC registered new issues and found that 38% contained limitation on restricted payment provisions up from 34% in the first half of 2016. Limitations of indebtedness covenants were present in 44% of new issues compared to 46% in deals priced in the first half of 2016.