Reduced Mergers and Acquisitions Deals Despite a Strong IPO Market

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The pace at which M&A deals of venture backed companies are taking place is underwhelming to say the least. The IPO market was really good this year, and was expected to compete with the 2007 market. But despite this, there were just not enough Mergers and Acquisitions.

In the period between January 2013 and September 2013, the number of M&A deals was 310. This value is 12% less than the value that was observed in this same period during last year. In 2012, the number of M&A deals that took place was 353. In term of value, there also has been a decline of about 31% compared to last year. This year, there was an activity of almost $25 million, and last year it was of more than $35 million.

Considering the same period, there have been 54 IPOs that are more than 29% when compared to 2012. Last year, the number of IPOs that took place in the whole 12 months was 50, and this year, the number has already been increased even though three months are not being considered in the period under observation.

Analyzing the circumstances of the year 2007, there has been around 53 IPOs in the first three quarters. In the last quarter alone, there were 27 of these, resulting in a yearly value of 80. The momentum of IPOs did rise but the market gave way and collapsed in the year 2008.

Once again, history is probably repeating itself. The IPOs market is experiencing a surge and in every quarter, the number rose higher. In the first quarter, there were only 9 IPOs. The second and third quarter experienced 20 and 25 IPOs, respectively. In the third quarter, almost 12 companies filed their IPO and may witness it taking place in the last quarter.

Coming onto the M&A market, its heading in the absolute opposite direction. Activity has declined and only 385 deals took place in the first three quarters. Most of the acquirers are not ready to spend huge amounts. This is very obvious from the fact that there were only two deals over a billion dollars in the last quarter.

The year has still ended, but in light of the current stats, it can be said that this was not one of M&A’s best periods.


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