Issue 2 2019

60 Acquisition International - Issue 2 2019 2018 proved to be a very impressive year in terms of the value of mergers and acquisitions (M&A) targeting support services companies. According to Zephyr, the M&A database published by Bureau van Dijk, there were 12,121 deals worth a combined USD 445,411 million announced over the 12 months. This represents the highest annual value injected into the sector on record and marks an increase on the USD 445,411 million-worth of deals signed off in 2017. n January 2019, the support services sector was targeted in 754 deals worth an aggregate USD 25,068 million. This means value has reached its lowest level in a year; the last time value was lower was in January 2018 (USD 16,797 million). Despite this, volume actually increased month-on-month, climbing 1 per cent from 745 deals in December. The most valuable months of 2018 were May (USD 67,515 million) and July (USD 56,587 million). Unsurprisingly, both of these were supported by some sizeable deals. May saw two USD 14,000 million deals announced, while in July, one USD 18,400 million transaction was signed off. This is in contrast with January 2019, when the largest deal involved Zhongnan Commercial paying USD 5,639 million for Chinese lighting equipment wholesaler Beijing EasyHome New Retail Chain Group. While this is still a significant transaction, it is not on the same scale as those mentioned which occurred in 2018. The aforementioned USD 5,639 million Beijing EasyHome New Retail Chain deal was followed by a deal with a UK target as Ensco plc submitted a USD 1,604 million approach for contract drilling services provider Rowan Companies, while third place was taken by a USD 1,253 million transaction in which CMA-CGM has agreed to pick up the remaining 75 per cent stake it does not already own in Swiss logistics and supply chain management systems developer CEVA Logistics. In all, five deals announced in the sector in January broke the USD 1,000 million-barrier. Together, these deals accounted for 42 per cent of total value in the month under review. In terms of the regions targeted in the support services sector in January, the Far East and Central Asia leads the way by both volume and value. In all, companies based in the region were targeted in 239 deals worth a combined USD 9,016 million in January. This development is unsurprising given that the month’s largest deal featured a Chinese target and seven of January’s top 25 deals by value had Far East-based targets. In terms of value, it was followed by Western Europe, with dealmaking of USD 8,622 million, while North America placed third with USD 7,768 million. No other region attracted more than USD 500 million; South and Central America placed fourth, with USD 393 million. To sum up, January has been a quiet month in terms of the value of deals targeting the support services sector. However, it is not unusual for the year’s opening month to be a fairly sedate one in comparison to the end of the preceding year. We can hope to see an increase in activity levels over the coming months and a return to the values injected in May and July 2018. Company: Bureau van Dijk E-Mail: [email protected] Web: www.bvdinfo.com Support Services I This development is unsurprising given that the month’s largest deal featured a Chinese target and seven of January’s top 25 deals by value had Far East-based targets.