Deal Drivers: Americas HY 2021
Total Page：16
File Type：pdf, Size：1020Kb
Deal Drivers: Americas HY 2021 A spotlight on mergers and acquisitions trends in 2021 Contents Foreword: Key sectors primed and ready for sunny second half 03 Outlook: Americas heat chart 04 All sectors 05 Consumer 14 Energy, mining & utilities 19 Financial services 24 Industrials & chemicals 29 Pharma, medical & biotech 34 Telecoms, media & technology 39 About this report 44 Foreword: Key sectors primed and ready for sunny second half In late 2020, key M&A markets in the Americas witnessed In Q2, some signs of normalization began to materialize in record-breaking activity as dealmakers shook off the worst of certain industries. After the whirlwind recovery of M&A markets the COVID-19 pandemic. This optimism carried through into in Q4 2020 and Q1 of this year, a slight regression towards the the early phases of this year, with more economies reopening mean should not come as surprising. However, dealmakers are and vaccination programs promising a return to normality. still in enviable positions with near record-breaking numbers. After months of lockdowns, dealmaking in Q1 2021 continued This does not mean dealmakers can rest on their laurels. to benefit from the release of pent-up demand, the renewal of Economic recovery remains uneven in parts of the Americas, transactions postponed due to the pandemic, and an influx of and COVID-19 is not yet in the rear-view mirror. But there new M&A opportunities as corporates and investors began to are more reasons for optimism than for pessimism: the strict devise their post-COVID-19 strategies. rules on movement that governments introduced last year are unlikely to be reinstated; inoculations are becoming more widely distributed in developing economies; and new In the US, the induction of Joe Biden as treatments for coronavirus are in constant development. President gave consumers and dealmakers Dealmakers should ready themselves for a very busy second a sense of assurance that had been lacking half of 2021. for several years. Given the central role the US plays in regional and global M&A, all parties are likely to benefit from the higher degree of certainty and level-headedness that a Biden White House is expected to provide. 3 Outlook: Americas Heat chart based on potential companies for sale heat chart Canada US Western Midweastern US Southern US Northeastern US Brazil Latin America & Caribbean TOTAL According to our forward-looking heat chart, which illustrates Financial services 21 363 222 405 502 45 30 1,588 the distribution of ‘companies for sale’ stories on the Mergermarket intelligence tool, financial services is the TMT 41 373 103 247 322 48 17 1,151 industry in which dealmakers should expect to see the most activity in the Americas in the near term. It amassed 1,588 Pharma, medical & biotech 24 178 98 182 246 20 748 stories through the first six months of 2021 about financial services companies coming to market in the region, the most Industrials & chemicals 15 116 86 140 145 20 5 527 of any sector—representing almost 30% of the 5,429 ‘for sale’ stories reported overall. Consumer 16 110 57 96 106 34 9 428 The next most popular sector was technology, media and Business services 10 84 37 89 95 22 8 345 telecoms (TMT), which continues its scorching run from 2020 when consumers and companies alike relied so much on Energy, mining & utilities 30 38 22 38 42 41 12 223 technology as governments imposed stay-at-home orders during the pandemic. The industry accrued 1,151 ‘for sale’ stories in H1 2021, trailing behind financial services but still Leisure 36 13 28 32 8 2 119 far ahead of the third-place pharma, medical & biotech (PMB) sector, which had 748 such stories. Real estate 6 24 7 23 15 6 7 88 Unsurprisingly, given the size of its economy in general and its Transportation 3 13 6 18 16 16 2 74 rapid post-crisis resurgence, the US accounts for the largest share of activity by far. The four subregions that make up the Construction 2 8 3 10 17 19 59 Cold Warm Hot US in our heat chart contributed 4,868 ‘for sale’ stories in total, representing almost 90% of all stories from the Americas. Agriculture 14 10 8 4 4 6 2 48 Note: The Intelligence Heat Charts are based on ‘companies for sale’ tracked by Mergermarket in Defense 9 3 15 4 31 the respective regions between January 01, 2021 and June 30, 2021. Opportunities are captured according to the dominant geography and sector TOTAL 182 1,362 665 1,295 1,546 285 94 5,429 Source:of the Mergermarket potential target company. 4 All sectors Sailing on the wave of rip-roaring post-pandemic rebound In value terms, the M&A figures logged in H1, and in particular Signs of normalization All sectors M&A activity, Q2, in the Americas represents a continuation of the heady In volume terms, however, Q2 saw a slight contraction 2018 - HY 2021 activity that began to be recorded in Q3 of last year. (1,923, a 15% decline from the preceding quarter’s 2,275 deal announcements), which could signify the beginning of The region’s economic fundamentals look robust. Every major the normalization of post-pandemic M&A activity. It might 2,500 900 economy and dealmaking hub is expected to enjoy strong be, for instance, that the pent-up demand of deals that had growth this year, with the International Monetary Fund (IMF) been postponed during the crisis has now been expended. 800 forecasting annual GDP expansion of 6% in the US and 5% in 2,000 700 both Canada and Mexico, according to its most recent World The ultra-buoyant figures from the end of 2020 were, in all Economic Outlook. likelihood, singular and exceptional. It is more probable that 600 H2 2021 will resemble the (still very upbeat) figures posted US$(bn) value Deal 1,500 Deals worth US$765bn in aggregate were announced in Q2 in 2019, when just under 2,000 deals were announced in the 500 2021 (up 16% from the preceding quarter), the antithesis of Americas per quarter. Moreover, some sectors—including TMT Q2 last year, when just US$83bn worth of deals were logged, and financial services—appear poised to see a tremendous 400 Deal volume Deal as COVID-19 began to encircle the globe. amount of activity. 1,000 300 Of course, elements of that outlook remain 200 dependent on the pandemic, especially 500 if mutations of the COVID-19 virus prove 100 resistant to vaccines, which could lead to 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 recurring waves of infections. Dealmakers 2018 2019 2020 2021 can take some solace, though, in the idea Deal volume Deal value US$(bn) that political leaders are, after enduring the turmoil of 2020, highly unlikely to reinstate Source: Mergermarket any very strict restrictions on movement. 6 TMT’s red-hot record All sectors top sectors by value I HY 2021 The top sector in both volume and value terms, by far, was US$(m) TMT, with 1,233 deals announced in H1 2021 worth more than TMT 518,189 US$518bn in aggregate. Those figures, respectively, account Pharma, medical & biotech 178,057 for almost 30% of all deals announced and 36% of total value Industrials & chemicals 165,683 logged in H1 in the Americas. Financial services 147,235 Energy, mining & utilities 120,485 No other sector comes close to TMT, which continues its red-hot run from 2020, as corporates and investors look All sectors top sectors by volume I HY 2021 to improve their technological positions in an increasingly digitized world. In volume terms, second-place industrials & Deal count chemicals contributed less than half as many deals as TMT, TMT 1,233 with 596 announced. In value terms, the silver medalist was Industrials & chemicals 596 PMB, with US$178bn worth of deals, just one-third that of TMT. Business services 550 Pharma, medical & biotech 508 Financial services 359 Unsurprisingly, TMT was a key component of the top 10 deals announced in H1. It contributed three of the seven largest transactions, including the biggest, namely the All sectors top bidders by value I HY 2021 almost-US$100bn sale of Warner Media to Discovery, which US$(m) subsequently merged. The entertainment giant hopes to USA 1,073,700 become a dominant player in the ‘streaming wars’. Canada 130,995 Ireland (Republic) 51,446 Japan 28,351 Brazil 26,848 All sectors top bidders by volume I HY 2021 Deal count USA 3,030 Canada 380 Brazil 203 United Kingdom 124 France 40 7 Megadeals on track All sectors top 10 announced deals, HY 2021 The next largest deal fell in the PMB space, when a group of major PE firms—including Carlyle, Blackstone, and Hellman Announced Bidder company Target company Target Vendor company Deal value & Friedman, along with sovereign wealth fund GIC—moved to date dominant (US$m) acquire medical-supply company Medline. The transaction, sector which is thought to be worth US$34bn, would be one of the 1 17-May-21 Discovery, Inc. Warner Media, LLC TMT AT&T Inc. 96,153 biggest leveraged buyouts since the 2008 financial crisis. In light of the pandemic, a company like Medline, which produces 2 05-Jun-21 The Carlyle Group; Hellman & Friedman LLC; Medline Industries, Inc. Pharma, 34,000 Blackstone Group Inc.; GIC Private Limited medical & and distributes a wide array of medical products in more than biotech 125 countries, is extremely attractive. Two other PMB deals 21-May-21 Canadian National Railway Company Kansas City Southern Transportation 33,565 appeared in H1’s top-10 transactions.