For the past year we have been discussing the gradual return of the M&A markets. Slowly but surely the activity has been inching upward. Let’s take a look at the data and measure the progress.
On a year over year basis, both the number of deals and the aggregate value of deals have increased substantially. The number of deals completed increased by over 25% in 2010 vs. 2009. Not surprisingly, the aggregate value of closed deals increased at a greater rate of 33%. This implies that the larger segment of the market is growing at the fastest pace.
What is particularly interesting is that there is a clear demarcation in the rate of growth of activity at the $50 million transaction size. As noted in Table 1, the transactions in excess of $50 million are growing in both number of deals and aggregate dollar amount in excess of 66%. The growth rate is even higher for transactions in excess of $500 million (the fastest growing sector of the market). The growth rate for transactions under $50 million is significantly lower than the rest of the market with the under $10 million segment of the market actually declining on a year over year basis.