98 Acquisition International - Issue 5 2018 The value of global private equity (PE) investment increased year-on- year and declined quarter-on-quarter in the opening three months of 2018, while volume was the lowest recorded since Q3 2016. According to Zephyr, the M&A database published by Bureau van Dijk, there have been 1,564 deals worth a combined USD 155,934 million in Q1 2018, compared to 1,628 deals worth USD 161,989 million in Q4 2017. hile value represents the third consecutive decline quarter-on-quarter, it remained higher than Q1 2017, when 1,641 deals worth an aggregate USD 116,308 million were signed off. However, it is worth noting that Q1 2018 is the largest first quarter for announced PE deals since Q1 2007 (USD 226,946 million) and typically in recent years, the first quarter has been slower in terms of PE investment than the fourth quarter of the previous year. In addition, despite only being 25 days into Q2 at the time of writing, there have already been a sizeable amount of PE investments made so far as 355 deals worth a combined USD 36,550 million have been signed off. As value in Q1 performed significantly well in terms of PE dealmaking, it will be interesting to see how Q2 stacks up against the corresponding period of 2017, when 1,613 deals worth a combined USD 176,036 million were announced. Value in 2018 to date has been largely supported by two deals that exceeded USD 10,000 million and together represent 21 per cent of total value for Q1. The largest such transaction involves theBlackstone Group, Canada Pension Plan Investment Board and GIC agreeing to acquire the financial and risk business of Canada’s Thomson Reuters for USD 20,000 million. This was followed by Carlyle Europe Partners, GIC and Carlyle Partners picking up the speciality chemical unit of Akzo Nobel for USD 12,576 million. In fact, all of the top 20 deals by value exceeded USD 2,000 million in the year so far and featured other investors such as BC Partners, Silver Lake Technology Management and Global Infrastructure Management. Companies in the computer, information technology and internet services industry have proved to be popular targets of PE investment this year, having been targeted in 848 deals worth a combined USD 51,982 million. This was followed by personal, leisure and business services with 316 deals worth USD 41,374 million, while industrial, electric and electronic machinery and chemicals, petroleum, rubber and plastic featured in deals worth USD 21,497 million and USD 20,887 million, respectively. North America is in the lead by both volume and value of PE targets in Q2 to date, with 130 deals worth USD 19,637 million, already representing a quarter of the USD 61,125 million invested in the region in Q1 2018. North America has received a significantly higher amount of investment than its nearest competitor, Western Europe, by value, with USD 8,622 million. Companies in the Far East and Central Asia were third with USD 4,918 million, followed by Oceania (USD 1,873 million), South and Central America (USD 1,440 million) and the Middle East (USD 53 million). In terms of volume, businesses in the Far East and Central Asia were the second most prolific targets, having featured in 113 deals, followed by Western Europe with 88 deals, Oceania (9), South and Central America (8) and the Middle East (4). In conclusion, despite value declining over the three-month period, it was the highest recorded Q1 since the opening quarter of 2007. This could give a good indicator of how the second quarter could pan out and shows that a small number of large investments, such as the Thomson Reuters and Akzo Nobel deals, can make a significant impact on overall results for a timeframe. © Zephyr Company: Bureau van Dijk E-Mail:
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