The end of the first quarter is upon us and it has been a flying start to the year in terms of announced deal value. Before even running the actual deal stats and simply by thinking of the number of high profile deals that have made the headlines of the financial press, I believed that companies had appeared to be keen to do deals this quarter. It has felt like every day that I looked at the news, one company or another was the subject of a deal and it almost seemed a little odd when something high profile didn’t appear in the news on a given day.
As of today, announced deal values stand a little over USD 1.2 trillion, a record figure for a first quarter, and there are still a couple of days left before the end of March. The last three months has seen a flurry of USD 10bn+ deals announced, with fifteen having been announced. This represents the highest number in a three-month period since Q1 2015. Add in the USD 47bn failed deal involving Qualcomm and NXP and that would have pushed aggregate value for the first quarter even higher.
Good economic growth appears to be inspiring confidence throughout global boardrooms and the Trump Administration tax cuts passed late in 2017 are also enabling US-based companies to be more aggressive in their pursuit of targets. Private equity buyers still have an ever-increasing amount of funds to put to work, which means from a seller’s perspective you would expect strong competition if your business becomes the desired target in a deal.
The levels of activity that we have seen so far in 2018 were last seen three years ago, in 2015, and that became a vintage year in terms of global deal activity.