2018年-德勤全球_A_financial_money-go-round__20页_6mb

US-UK M&A Deal Monitor Summary

Core Content

The Deloitte US-UK M&A Deal Monitor is a report analyzing the trends in mergers and acquisitions (M&A) activity between the United States and the United Kingdom over the most recent eight quarters, covering the period from 2016 Q3 to 2018 Q2. The report emphasizes that while deal values may fluctuate due to the influence of high-value transactions, deal volumes are a more reliable indicator of market trends. The report highlights the growing role of Financial sponsors in the M&A landscape and explores the implications of this trend.

Main Points

Deal Volumes and Market Trends

• Deal Volumes: The US-UK M&A corridor has remained stable, with deal volumes showing little change over the first half of 2018 compared to the previous 18 months.
• Deal Value: Due to the lack of disclosed values for over two-thirds of deals, the report notes that volatility in deal values is primarily driven by a few high-value transactions.
• Regional Distribution: London dominates M&A activity in the UK, while New York and California are the main hubs in the US. The technology sector accounts for over a quarter of all deals, and the corridor represents 5% of global cross-border M&A activity and 20% of disclosed deal value.

Buyer and Seller Dynamics

• Financial Sponsors: Financial sponsors are twice as likely to sell to other Financial sponsors compared to Corporate or Private sellers. Financial buyers are more than twice as likely to acquire from Financial sellers.
• Deal Flow: Over 70% of transatlantic deals involve the sale of privately-owned businesses. Corporates account for over two-thirds of the buyer side, with the majority of acquisitions being from Private sellers or Corporate divestments.
• Behavioral Patterns: Financial buyers and sellers tend to prioritize speed and certainty, which often gives them an edge in the market. Corporate buyers, on the other hand, face more internal bureaucracy and slower decision-making processes.

Financial Money-Go-Round

• Cost of Capital: Low interest rates and increased liquidity have made it easier for Financial sponsors to access capital, enabling them to compete more effectively with Corporates.
• Dry Powder: Financial sponsors have significant 'dry powder' (uninvested capital) to fund acquisitions, which has increased the number of transactions and the competition for assets.
• Secondary Sales: Secondary Financial sponsor transactions are becoming more common, with a notable increase in the share of Financial transactions in the US-UK corridor from 10% in 2016 to 15% in the first half of 2018.

Strategic Fit and Process

• Strategic Fit: The strategic rationale and synergy potential of Corporates give them an edge in acquiring certain assets, particularly those that align with their long-term goals.
• Sale Process: Financial sponsors often have more efficient and transparent sale processes, which can lead to faster deal closures and more confidence in the outcome.
• Challenges for Corporates: Corporates may find it difficult to compete with Financial sponsors in fast-paced and detail-oriented sale processes, especially when the latter have a clear understanding of the business and its value.

Key Questions for Further Exploration

• Is the increasing frequency of Financial-to-Financial transactions healthy for the industry?
• Will the 2018 deal vintage experience negative multiple arbitrage on exit?
• Are Financial sponsor transactions being driven to artificially high levels due to the availability of 'dry powder'?
• How can Corporates better compete with Financial sponsors in the sale process?
• Should Financial sponsors reassess their sale processes and engagement with strategic buyers?
• Is the focus on secondary transactions distracting from the development of primary deals?
• Do Corporates view selling to Financial sponsors as a negative?

Regional Analysis

US Outbound Investment

• New York and California: These states are the primary sources of US buyers, accounting for over half of the deal activity in their respective regions.
• Other Regions: There is a more even spread of deal activity across other US regions, with Illinois being the most active in the Midwest and Texas in the South.

UK Inbound Investment

• London: Over half of US-UK M&A activity involves London-based buyers, with an additional 14% being investor groups primarily based in London.
• Regional Buyers: UK regional buyers are more likely to acquire businesses outside of New York and California, suggesting a broader geographic reach.

Contacts

• Paul Lupton
  Deloitte UK Lead
  US-UK M&A Corridor
  +44(0)2070074842
  plupton@deloitte.co.uk

• Andy Wilson
  Deloitte US Lead
  US-UK M&A Corridor
  +1 312 486 3587
  andwilson@deloitte.com

• Aziz UI-Haq
  Partner
  M&A Advisory
  +44(0)1614556831
  azizulhag@deloitte.co.uk

• Frank Moczulewski
  Senior Manager
  M&A Advisory
  +1 312 486-2108
  fmoczulewski@deloitte.com

• Dominic Graham
  Associate Director
  US-UK M&A Corridor
  +44(0)2073036323
  dominicgraham@deloitte.co.uk

• Alexandra Manning
  Marketing Manager
  US-UK M&A Corridor
  +44 (0)20 7007 1357
  amanning@deloitte.co.uk

Conclusion

The US-UK M&A corridor continues to be a significant and active part of the global M&A landscape. Financial sponsors are playing an increasingly prominent role, with their structured and efficient sale processes giving them an advantage over Corporates. The report underscores the importance of strategic fit and the need for Corporates to adapt their strategies and processes to remain competitive in this evolving market.