Mid-cap M&A activity surges as economy rebounds
SMALL and mid-size companies have been increasingly active on the M&A scene in the first half of the year, dabbling in a greater number of more lucrative deals as the economic tide begins to turn.
The value of global mid-market mergers and acquisitions, among companies valued up to $500m, surged by 42.3 per cent to $311.7bn (£206.9bn) over the past six months, according to the latest review by Thomson Reuters. The number of deals was also up on the same period last year, from 18,279 to nearly 19,100, echoing the tentative return of confidence to the markets.
In a surprising twist, almost every region of the globe experienced growth in mid-market M&A activity, including the UK, despite fears over the impact of the coalition government’s fiscal tightening drive. UK mid-market deal values rose by almost 90 per cent to $19.8bn, while the number of deals climbed to 1,177 for the half-year.
Financial advisory firms were quick to reap the gains of the increased activity over the period. Morgan Stanley advised on the largest share of deals by value, though its advisory fee bill was just $221m compared to closest rival Goldman Sachs’ $244.2m.
Among small cap companies, those valued up to $50m, the value of M&A deals increased by almost a quarter over the past half year, to $60.5bn. However, the number of deals only inched up to 17,546, from 17,228 in the first half of 2009.
Ernst & Young was the most prolific financial adviser to small caps by deal value, followed up by Nomura and Lazard. But the accountancy giant’s fee bill paled in comparison with its banking peers at just $3.4m.
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M&A advisers to mid cap companies, H1 2010
Institution Deal value No. of deals Advisory fee bill
1. Morgan Stanley $13.9bn 109 $221m
2. Goldman Sachs $12.6bn 85 $244.2m
3. JP Morgan $11.11bn 82 $177.3m
4. Lazard $11.08bn 90 $236m
5. UBS $10.3bn 81 $139.9m
6. Credit Suisse $9.8bn 82 $156m
7. Deutsche Bank $9.5bn 62 $119.3m
8. Rothschild $8.6bn 92 $225m
9. BoA Merrill Lynch $6.5bn 48 $107.2
10. Nomura $6.0bn 69 $67.2m
Source: Thomson Reuters/Freeman Consulting