AI Magazine Issue 2 2017

66 Acquisition International - February 2017 The volume and value of deals featuring targets in the support services sector declined in the second half of 2016, according to Zephyr, the M&A database published by Bureau van Dijk. In all there were 5,567 deals worth a combined $176,807 million announced over the course of the six months, down from 6,126 deals worth $202,102 million in the first half of the year. 017 has gotten off to a fairly slow start in terms of deal making activity in the sector. In January, there were 860 deals worth a combined $24,296 million. If activity continues on this trajectory we are likely to see H1 2017 decline on H2 2016 by both volume and value. If this is the case it would represent the third consecutive drop on both fronts for a six- month period. However, January’s result alone is still fairly close to the $38,725 million invested in H1 2009 and we could still see increased levels of deal making over the coming months which may boost results before the end of H1. As we have seen in previous years, it only takes a small number of large transactions with high values to change the course of results over a period. We have already seen a number of fairly large deals targeting support services companies in 2017 and many will be keeping a close eye on the markets to see if further high considerations are injected in the coming months. The largest deal to target a support services company in 2017 to date featured US-based online application intelligence software player AppDynamics, which Cisco Systems agreed to acquire for $3,700 million. This deal alone accounts for 15% of the $24,296 million invested over the course of the month. Second place was taken by a transaction worth $2,280 million as WestRock Company signed on the dotted line to pick up Bermuda-headquartered print-based packaging solutions provider Multi Packaging Solutions International. Only two other deals broke the $1,000 million-barrier; Keysight Technologies acquired Ixia for $1,600 million while Digital Bridge Holdings took over Vantage Data Centers Management for $1,000 million. North America has so far attracted the most support services investment in 2017, with the region having been targeted in 289 deals worth $12,135 million. In terms of value it was followed by the Far East and Central Asia with $7,092 million, while South and Central America came third with $2,636 million. It was a different story by volume as Western Europe was second with 242 deals, followed by the Far East and Central Asia (229) and Eastern Europe (62). The fact that South and Central America could only place fifth by volume with 15 deals highlights the importance of individual large considerations as those transactions were worth a combined $2,636 million, thereby accounting for 11% of the industry’s total value for the period, and will have boosted the sector’s aggregate value for the month considerably. In conclusion, it remains too early to say how 2017 is likely to shape up for the support services sector, but the fact that a number of high value transactions worth over $1,000 million have already been signed off is undoubtedly encouraging. The next few months will provide a better indication of whether H1 is likely to stop the decline in activity which has been witnessed over the last couple of years. Company: Bureau van Dijk E-Mail: [email protected] Web: www.bvdinfo.com M&A Deals in the Support Services Sector 2