M&A continues to pick up in 2011

Deal value is up 39 percent on the first five months of last year and activity is set to accelerate further, says report from PwC

M&A activity in the US continued to pick up pace in the first five months of 2011 and is set to accelerate further during the second half of the year, according to a report from PricewaterhouseCoopers (PwC).

The first five months of 2011 saw 1,276 announced deals worth a total of $454 bn, reports PwC. That represents an increase of 39 percent in value over the same period last year, when total deal value stood at $327 bn.

Deal volume, however, has declined by 4 percent from the 1,336 deals in the first five months of 2010 – a fact PwC puts down, in part, to the lag time in reporting transactions.

Average deal size increased to $356 mn in the first five months of 2011, up 45 percent from $245 mn last year, adds the report.

The strong state of corporate balance sheets – a result of cost cutting and restructuring during the recent downturn – means corporations continue to dominate the M&A landscape, according to PwC.

During the first five months of the year, corporates accounted for 82 percent of deal volume and 84 percent of deal value, the report notes.

PwC expects the market to continue to accelerate in the second half of the year, thanks to stronger capital markets, more available financing and the large cash piles held by corporates and private equity houses.

‘As expected, the favorable conditions that escalated through the end of 2010 and drove the pick-up in M&A activity carried through in the first five months of 2011,’ comments Martyn Curragh, US transaction services leader at PwC, in a statement.

‘An increase in total deal value in the last 12 months ending May 2011 indicates a sustained M&A cycle and, as confidence continues to build, markets stabilize and businesses look toward growth, we expect the acceleration of the M&A market to continue in the second half of 2011.’

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  1. gnanesh ps|

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