March 27, 2017

Unravelling 2017 Deal Trends

by Claire Cheape

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While Q1 2017 is yet to come to close, the recent global IPO boom and latest data showcases the deal making decline encountered in January 2016 post the year of the mega deal won’t be repeating itself.

As the year kicked off worldwide M&A reached at 6-year high. As of January 30th 2017, worldwide announced M&A totalled US$258.2 billion, up 38% from January 2016 and highest January total since 2011.

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Key Facts & Figures

Global IPO activity so far in 2017 up triple-digit percentages by dollars raised and number of offerings

 

  •  $15.2 billion from 187 offerings

Global initial public offerings totalled US$15.2 billion during the first two months of 2017, more than double year-to-date 2016 levels. With 187 offerings priced so far this year, the number of global IPOs is off to the strongest annual start since 2007 (201 offerings)

  • China Offerings Account for 39%

IPOs from companies based in China totalled US$5.9 billion from 85 offerings during the first two months of the year, accounting for 39% of global proceeds. Last year-to-date, Chinese companies had raised $1.7 billion from 21 IPOs. China and the United States account for a combined 71% of IPO dollars this year, up from 33% a year ago

  • Mexico, Brazil and Russia Tap Market

IPOs from Mexico’s Becle SAB de CV, Russia’s Detskii Mir and Brazil’s Instituto Hermes Pardini topped the list of new listings in February and marked the first time back to the IPO markets for these emerging market countries this year

  • JP Morgan Leads Bookrunners

As February came to a close, JPM Morgan leads the ranking of global IPO bookrunners with 6.0% market share, followed by Morgan Stanley and Credit Suisse.

  •  Consumer Products, Real Estate Top Sectors

IPOs from US-based JELD-WEN Holding and Laureate Education pushed the Consumer Products sector to an industry-leading $2.6 billion from 22 offerings, or 17% of total proceeds this year. Real Estate and Industrials account for 16.9% and 13.2% of overall activity through February.

 Look Back to 2016

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Worldwide deal making totaled $3.7 trillion during 2016, a decrease of 16% compared to full year 2015 and the third largest annual period for merger activity since records began in 1980.

 

 

 

 

 

 

 

A look back across historical deal cycles illustrates a span of seven or eight years in between deal making peaks. At the turn of the century, two of the all-time largest quarters for deal making kicked off the modern era of deal making, with records broken in following peak years of 2007 and 2015. Worldwide deal making totaled $3.7 trillion during 2016, a decrease of 16% compared to full year 2015 and the third largest annual period for merger activity since records began in 1980.

Deal Making in 2016 – The Key Takeaways

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