M&A Deal Value Tanks 37% In November To $2.2 Billion
This is in spite of the month seeing the fourth highest number of IPOs in the past 11 years, according to Grant Thornton.
November turned out to be the worst month for the deal street with 119 merger and acquisition transactions worth $2.2 billion, a fall of 40% in volume and 37% in value annually, a report said on Monday.
This is in spite of the month seeing the highest number of initial public offerings in the year, and the fourth highest in the past 11 years, according to the data collated by Grant Thornton.
With 21 per cent of M&A volumes, the startup sector continued to dominate the M&A deal activity, said the report, while private equity activity saw $1.4 billion worth of investments made across 100 deals (second-lowest monthly volumes), down 55% in volume and 32% in value.
With just $2.2 billion across 119 deals, November was the worst month so far this year. This is a 40% plunge in volume and a 37% in value over November 2021.
However, the month also saw the highest number of IPOs in the year, making it the fourth-highest in the past 11 years, Shanthi Vijetha, a partner at the agency, said.
The muted deal activity shows a significant drop in both M&As and PE deals as strategic and financial investors are taking a cautious and conservative approach given the prevailing global uncertainties, he said.
From an M&As perspective, both in the terms of volume as well as value, deals declined with only 19 transactions worth $818 million, marking the second-lowest monthly volumes till date. While volume declined 62%, value plunged 88% over November 2021.
The startup sector continued to drive the PE deals with a 55% of volume worth $246 million, led by retail tech segment (22% share), followed by fintech and enterprise application and infrastructure at 16% and 13%, respectively.
The energy and natural resources sector led the chart in value terms for the month led by the Serentica Renewables fund raising.
The markets are down so far this year both from the IPOs as well as QIPs fronts with 32 IPOs worth $7.6 billion as compared to 53 IPOs worth $15.4 billion in 2021. On the other hand, qualified institutional placement saw 13 issues raising $1 billion so far compared to 34 issues that raised $6.1 billion in 2021.