Greater Pittsburgh middle-market M&A activity: Third quarter 2015

Economic and Market Data

  • Unemployment in the Pittsburgh Metropolitan area was estimated at 4.2% for September 2015, below the national rate of 5.1%. The Pittsburgh regional unemployment rate has decreased 1.0% from 5.2% in the third quarter of 2015.1
  • Q3-2015 observed poor financial results, as the S&P, DJIA, and NASDAQ closed down 6.9%, 7.6%, and 7.4%, respectively for the quarter. General market sentiment is that the third quarter market correction was caused by the slowing growth rate within the Chinese economy as well as the widespread expectation that the U.S. Federal Reserve Bank would begin to unwind their simulative policies through interest rate increases.2

Pittsburgh M&A Activity3

  • There were 17 reported middle-market M&A transactions during Q3-2015. Activity decreased from 64 transactions during Q1-2015. Q3-2015 also marked a decrease from 40 deals for the same period in 2014. We would note that this decrease in deal volumes is a function the specific nature of geographic focus and not the larger M&A transactions market (citing that Y/Y 3Q M&A transactions volume for the Great Lakes4 region has decreased by 9% while the Northeast5 region transaction volume has seen an increase of 4.5% year over year.
  • In terms of the total number of deals, the Industrials sector led the market with 41% of middle market M&A activity in Q3-2015. The Healthcare, Information Technology, Financials, and Consumers sectors followed with 35%, 12%, 6%, and 6% of middle market M&A activity, respectively.
  • The aggregate total deal value of the middle-market transactions with reported values was $565 million during Q3-2015. This is a decrease from the total deal value of $681 million during Q2-2015 and a decrease from $1.27 billion during Q3-2014.
  • The average transaction size was $188 million for the three deals with reported values in Q3-2015, representing an increase from $45 million for the 15 deals with reported values in Q2-2015.

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1 BLS.gov, Sep. 2015, Seasonally Adjusted.

2 S&P Capital IQ.

3 S&P Capital IQ and Baker Tilly Capital research, September 2015.

4 S&P Capital IQ 3Q Great Lakes M&A volumes: 2014 = 1,148, 2015 = 1,044.

5 S&P Capital IQ 3Q Northeast M&A volumes: 2014 = 2,102, 2015 = 2,018.

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