ArkMalibu M&A Market Monitor – April 2019

Coming off a strong first quarter, our outlook for an attractive 2019 North American M&A market remains unchanged.

Strategic acquirers represented about two-thirds of the deal count as they seek avenues of inorganic growth and channel diversification. Financial buyers and Family Offices account for the remaining activity as they continue to put record levels of dry powder to work.

Overall North American M&A activity continued its 2018 momentum with strong preliminary first-quarter results driven by robust corporate balance sheets, vast dry powder reserves, and the readily available access to financing. Aggregate disclosed deal value and deal count increased from the first quarter of 2018 by 16% and 7%, respectively. Large market and megadeals drove the growth in deal value, representing 60% of the total for the quarter, with 39 large market deals inked at greater than $1 billion and 10 mega deals at greater than $10 billion. The middle market was down slightly following the frenzied activity of the fourth quarter of 2018 but we expect activity to rebound as the year progresses.

The first quarter was one of optimism for North American capital markets as unemployment reached historic lows, U.S. monetary policy stabilized interest rates, and continued economic growth drove markets upwards. The S&P 500 posted a quarterly return of 12.9%, its highest since 2009. No slouches, the NASDAQ and Dow Jones posted quarterly returns of 16.0% and 11.1%, respectively. Despite these positive results, an undertone of uncertainty exists due to concerns regarding global trade, geopolitical stability, faltering growth in China, and the current bull market reaching 10 years old. We continue to believe that the overarching theme of 2019 will revolve around market perceptions of volatility and recession probabilities versus actual recession risks.

I invite you to access the M&A Market Monitor link below that will take you to our website where you may download detailed reports containing M&A trends and data from 17 industries. Please feel free to contact us at 513-583-5413 to discuss how the information presented in each report relates to your business and its own unique set of value drivers.

Our team at ArkMalibu is proud of our conflict-free business model, value-added processes, and M&A expertise which continues to deliver results that far exceed the expectations of our clients, the one-time seller. We would be delighted to listen to your story and help you and your company navigate the 2019 M&A market in achieving your goals.

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