There were 43 transactions that closed in the Pittsburgh regional market during the second quarter of 2018 (Q2 2018), a decrease of approximately 10.4 percent from the 48 closed transactions in the prior quarter. The 43 closed transactions also marks a decrease from the 47 closed transactions during the same period in 2017.
The pace of M&A activity increased in North America in Q2 2018 compared to the same quarter in 2017 (Q2 2017). In Q2 2018, M&A volume increased 5.5 percent while median transaction size increased 16.7 percent compared to Q2 2017.
The increase is the result of a positive business sentiment, ease of access to financing and an uptick in successfully completed “megadeals.” Several deals above $10 billion closed in Q2 2018 and the recent M&A boom has shown no signs of slowing after gaining significant momentum. Corporations seeking larger transactions were benefitting from increased purchasing power, availability of deployable capital and a healthy and stable economy. The favorable market outlook combined with organic growth opportunities had led to increased demand for acquisitions.
The increase in M&A activity was expected to put further upward pressure on price multiples, which had already risen to all-time highs due to ample private equity dry powder reserves and readily available debt financing. The median valuation/EBITDA multiple for North American M&A transactions reached 10.3x in 2017, which was up slightly from 10.2x in 2016.
Source: S&P Capital IQ, PitchBook and Baker Tilly Capital research (July 2018)
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