There have been fewer global M&A deals during H1 2024 compared to the first half of last year, yet total deal value managed to soar US$12.4 billion ($18.9 billion) higher, highlighting a spate of large transactions being executed.
According to S&P Global, Q2 2024 M&A volumes were flat compared to the first quarter’s levels, with US$552 billion ($843 billion) transacted against US$555 billion in Q1 2024.
The total number of deals quarter-over-quarter was also unchanged – decreasing by just 0.1% to 8,551 transactions.
There were no mining M&A transactions to make the top 10 largest announced deals worldwide during the past quarter.
Fewer global transactions yet deal values rise
Assessing the average implied enterprise value/EBITDA (x) by sector, deal multiples for the materials (mining) sector during Q2 2024 were 12.4x, down from 28.2x seen in Q2 2022. In the energy space, deal multiples during the past quarter were 5.6x, while the communications services sector recorded multiples of 37.9x for the quarter.
S&P Global notes the financials and technology sectors had the largest share of deals during Q2 2024. More than US$91 billion were announced within financials – a 21% increase year-on-year, and US$65 billion announced in technology deals – a 66% increase year-on-year.
“One notable trend was the uptick in going private transactions. The second quarter saw $67 billion transacted across 32 deals for this deal type, representing the most activity in this space since Q2 of 2022,” S&P Global reports.
“This was highlighted by 13 deals over $1 billion, including Silver Lake’s $21 billion takeover of Endeavor Group.”
Endeavor is a global sports and entertainment company acquired by Silver Lake, a global technology investing company.
At 32, the number of going private transactions is the highest in a quarter since Q4 2020 when 27 were inked.
According to Pitchbook, M&A’s path to recovery has been solidly tracking upward, thanks in part to private equity (PE). The global M&A data firm notes PE’s share of M&A deal value hit 41% in Q2 2024, up from 34% in the first quarter, as banks are lending for leveraged buyouts (LBOs) again and borrowing costs have dropped.
However, most PE and LBO activity was confined to the enterprise SaaS sector.
Meanwhile, the US and Canada continue to lead regional M&A activity at US$260 billion – yet this was a 5% decrease compared to the same period in 2023.
“Europe experienced a sharp increase with $181 billion, representing a 30% increase in volumes year-on-year, aided by BBVA’s $12 billion acquisition of Banco de Sabadell and the $10 billion acquisition of Millcom International by Xavier Niel’s investment vehicle, Altas LuxCo 4,” S&P Global reports.
Write to Adam Orlando at Mining.com.au
Images: S&P Global
