New Study on Trends on M&A, Private Equity Activity

According to an article in the fall 2013 issue of the SRR Journal by Gian Ricco, based on data from S&P Capital IQ, there were 15,155 mergers and acquisitions in the 12 months ending June 30, 2013, up 2% from the same period in the prior year. The aggregate value of the deals was $890 billion, down 3% from the $920 billion for the prior 12-month period, reflecting an increase in deals under $50 million. The average EBITDA multiple was 8.7 for strategic buyers and 7.7 for financial buyers. Private equity firms now hold 6,850 companies, with the median holding period for their investment at 5.4 years.

The study provides a perspective on how ESOPs compare to other transition strategies. We estimated that there are about 500 to 700 new ESOPs each year, so ESOPs clearly still are a small part of the M&A market.