September is one of the busiest months in the year across the debt markets, and this year is shaping up to be no exception – an abundance of activity in the M&A market has left many opportunities on the table.
The past week in particular has seen significant M&A activity, with 12 new deals added to the large-cap (EBITDA >EUR 30m) pipeline. Agromillora, Asmodee, HTL, iQuera, Planasa, Vita Group, Primafrio, Park Holidays, Climater, Infopro Digital, Schenck Process and Grupo BC have all made their way into the fray, with the expected debt pile from these deals alone totalling almost EUR 6bn.
Many deals remain in the early stages of the M&A process. Out of a total of 136 deals worth EUR 83bn sitting in the pipeline, over 50% remain in the mandated stage – that is having an advisor appointed to the deal, but yet to begin bidding rounds. However, opportunities still abound, as 17 deals totalling over EUR 9bn are in their final stages after having reached at least the final round of bidding.
A significant amount of these deals require low levels of financing, with 32% needing under EUR 200m. Nevertheless, some considerable financing activity is on the way, as 10% of the deals have an overall debt-financing requirement over EUR 1.4bn.
Regional split
Firms in Southern Europe are worth keeping an eye on in the coming months, as a number of deals are on the verge of completion. Though smaller in absolute number of deals, companies based in the UK and Ireland represent the highest potential deal volumes, with almost EUR 23bn across all stages and EUR 1.7bn in either the final round or exclusive talks.
Sector focus
By deal count, firms in the services, manufacturing and consumer goods industries are leading the M&A pipeline; however, the average deal size is relatively small at EUR 275m, EUR 476m and EUR 653m in each respective category. Telecoms deals stand out by average volume. While still sitting within the top five by deal count, the 12 telecoms firms in the pipeline have a much higher average deal size at EUR 1.6bn.
