M&A Market Monitor – July 2019

ArkMalibu’s M&A Market Monitors are now available.

U.S. & Canada M&A Overview

Median deal pricing rose to near-record levels of 11.2x EBITDA in the 2nd quarter, up from 10.5x in Q1. Deal volumes and total values continued the positive activity we saw in the first quarter. Megadeals represented 54% of the total deal value in the second quarter with a record 11 transactions announced at greater than $10 billion each. Importantly, the middle market rebounded from 2018 lows as acquirers successfully closed on a greater number of smaller deals.

Strategic buyers accounted for approximately 75% of M&A transactions in Q2 as they continue to utilize the M&A markets to buttress organic growth. Financial buyers made up the remaining 25% of deals as firms seek opportunities to deploy record levels of dry powder and family offices continue to increase allocations to private equity investments. Against this backdrop, ArkMalibu expects the M&A market to remain strong through 2020.

U.S. Equity Market Overview

After a very strong start to the year, equity markets growth slowed in the 2nd quarter with the S&P 500, Dow Jones, and Nasdaq booking Q2 returns of 2.6%, 1.3%, and 2.3%, respectively as investors weighed concerns regarding the maturation of the longest U.S. business cycle in history and rising volatility against optimism towards lower risk of an imminent U.S. recession, positive GDP growth of 3.1% in the Q1, and the new dovish posture taken by the U.S. Federal Reserve (“Fed”). Despite the Q2 hiccup, equity markets are still having a banner year as the S&P 500, Dow Jones, and Nasdaq notched H1 returns of 17.4%, 14.0%, and 20.7%, respectively.

ArkMalibu Industry Snapshots

I invite you to access the M&A Market Monitor link below that will take you to our website where you may download detailed reports containing M&A trends and data from 17 industries. Please feel free to contact us at 513-583-5413 to discuss how the information presented in each report relates to your business and its own unique set of value drivers.

Our team at ArkMalibu is proud of our conflict-free business model, value-added processes, and M&A expertise which continues to deliver results that far exceed the expectations of our clients, the one-time sellers. We would be delighted to listen to you and then help navigate the M&A market in achieving your goals.