M&A activity jumps 22% in first nine months

M&A activity jumps 22% in first nine months
The total volume of deals done in the same period of 2013 stood at $29.7 billion with 694 deals, according to Grant Thornton's quarterly dealtracker report.

'While the year began on a rather cautionary note, the deal pace started picking up in the months closer to the elections and the momentum kept increasing thereafter, signalling positive vibes for the months and quarters to come,' Grant Thornton India partner Raja Lahiri said in the report.

During January-September period, the total number of merger and acquisitions that took place stood at 441, worth $27.817 billion. In the similar period, the total merger and acquisition was $21.699 billion with 372 deals.

During the period, the PE deals were worth $8.45 billion and their number stood at 445. Inbound merger and acquisition deals stood at $9.698 billion with 129 deals in the first nine months as against $5.685 billion with 103 deals in the year ago period.

The report said there is a continuous uptick in private equity deal values and volumes, with over 50 percent deal volume from private equity/venture capital investments alone.

Lahiri said an increase across segments from domestic, inbound, outbound to private equity in both values and volumes implies a revival in business sentiments and investment climate. 'We have seen merger and acquisition values driven by the pharma sector with deals such as Sun-Ranbaxy merger indicating the consolidation trend in the sector, and GlaxoSmithKline consolidating operations by hiking the stake in the domestic subsidiary,' Lahiri said. 

Moreover, with close to a 40 percent increase in investment volumes over 2013, private equity deals have contributed 50 per cent of total deal volumes in 2014 driven by the technology sector.

Key deals in the technology sector include Cognizant acquiring US based Trizetto for $2.7 billion, Flipkart-Myntra acquisition for $340 million.

The report said the PE investment continues to be driven by the e-commerce sector led by the billion dollar investment into Flipkart.

Sectors which are expected to see renewed deal activity include infrastructure, energy, consumer and financial services.

'We expect valuations to go up given the renewed business sentiments which in our view, would be both a challenge and an opportunity for dealmakers to close deals in the coming quarters,' Lahiri said.


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