Latest news with #Mergermarket
Business Mayor
22-05-2025
- Business
- Business Mayor
Dealmaking rebounds after Trump's tariffs cut off a budding M&A boom
People walk by the New York Stock Exchange (NYSE) on June 18, 2024 in New York City. Spencer Platt | Getty Images Hopes for an active year of mergers and acquisitions could be back on track after being briefly derailed by the Trump administration's sweeping tariff policies last month. Dealmaking in the U.S. was off to a strong start this year before President Donald Trump announced tariff policies that led to extremely volatile market conditions that put a chill on activity. In a pre-tariffs world, dealmakers were encouraged by the Trump administration's pro-business flavor and deregulatory agenda, as well as previously easing concerns about inflation. Those trends were expected to fuel an even stronger M&A comeback in 2025, after last year's moderate recovery from a slow 2023. This year's appetite for dealmaking came back quickly after Trump suspended his highest tariffs and market jitters took a backseat. If borrowing costs remain in check, many expect activity could be brisk. 'More clarity on trade policy and rebounding equities markets have set the stage for continued M&A, even in sectors hit especially hard by tariffs,' Kevin Ketcham, a mergers and acquisitions analyst at Mergermarket, told CNBC. The total value of U.S. deals jumped to more than $227 billion in March, which saw 586 deals, before suddenly slowing down in April to roughly 650 deals worth about $134 billion, according to data compiled by Mergermarket. So far this month, activity is rebounding and the average deal has been larger. More than 300 deals collectively valued at more than $125 billion have been struck this month as of May 20, Mergermarket said. Read More Bitcoin tops $66,000 as it nears 2021 all-time high That's encouraging. After Trump's 'liberation day' tariff announcement, U.S. deal activity plunged by 66% to $9 billion during the first week of April from the prior week, while global M&A activity dropped by 14% week over week to $37.8 billion, according to the data. Charles Corpening, chief investment officer of private equity firm West Lane Partners, anticipates M&A activity to pick up after the summer. 'The trade war has indeed caused a slowdown in the anticipated M&A boom earlier this year, particularly in the second quarter,' Corpening said. Higher bond yields are also hurting activity in the U.S. given that higher rates translate into greater financing costs, which reduces asset prices, he said. Corpening expects greater interest towards special situations M&A, or deals that involve a motivated seller and tend to be flexible with their structure and terms, as well as smaller transactions, which are easier to finance and generally face less regulatory scrutiny. 'We're beginning to see signs of recovery and we're getting some clarity on the types of deals that are likely to get into the pipeline soonest,' Corpening said. 'We anticipate that these earlier transactions will lean toward special situations as the better-performing businesses will wait for more market stability in order to maximize sale price.' Several major deals have been announced in recent months, with large transactions occurring in tech, telecommunications and utilities so far this year. Some of the biggest include: According to Ketcham, the Dick's-Foot Locker deal 'likely isn't an outlier' given that Victoria's Secret on Tuesday adopted a 'poison pill' plan. Such a limited-duration shareholder rights plan suggests the lingerie retailer is concerned about the threat of a potential takeover, he said. Ketcham added that some consumer companies are adapting to the new macroeconomic environment instead of pausing dealmaking. He cited packaged food giant Kraft Heinz confirmation on Thursday that it has been evaluating potential transactions over the past several months as an example. Kraft Heinz said it would consider selling off some of its slower growing brands or buying a brands in some of its core categories such as sauces and snacks. This kind of trend would lead to smaller deals, which has already been seen this year. For example, PepsiCo scooped up Poppi, a prebiotic soda brand, for $1.95 billion in March. READ SOURCE
Irish Independent
17-05-2025
- Business
- Irish Independent
Irish M&A activity has slowed dramatically: ‘This pent-up capital needs to be deployed at some point'
Several Irish M&A market experts described to the Sunday Independent how deals have been taking longer to execute, with extensive due diligence procedures helping extend some deal timelines from 12 weeks to up to six months. Buyers are also paying more attention to how exposed companies' sales and supply chains were to the US market and tariffs. Figures from Mergermarket, a global provider of M&A intelligence, show that only 28 domestic deals have been completed so far in the second quarter of the year, with a combined value of €1.26bn. While there is still time to run in the period, the figures were some distance off the totals in the first quarter of the year, when 129 deals were announced with a total value of over €7.04bn. Despite an apparent lull, most experts feel a strong pipeline of M&A activity is kicking off again, with the likes of listed hotel group Dalata seeking a buyer. More prospects have emerged in recent weeks, aided by US moves to do a trade deal with the UK and enter talks with China. Andrew McIntyre, head of William Fry's corporate/M&A department, said transactional work had been 'quieter' across the market over the first quarter, though it was beginning to heat up again in the past month. 'Anything that affects activity and trade is going to affect investors and buyers,' he said. 'They will consider things more carefully when those kinds of tensions are ongoing. 'What that leads to, though, is pent-up capital that needs to be deployed at some point. So we're hoping we will see a return a little later in the year, when things ease.' The cost of capital is higher. I think that is being reflected McIntyre said deals hadn't 'fallen away' but were taking longer to complete. Interest in M&A remained high, especially from international buyers, with recent 'green shoots' providing hope that more deals will close over the second half of the year. 'I'm working on something now in the retail space where they have courted a lot of buyers and investors over the years, and are now thinking: 'Well, maybe now is the right time, but we just don't know yet.' ADVERTISEMENT 'With the uncertainty of where things might end up in the next couple of months, people are being cautious and slower to make decisions,' he added. 'That doesn't mean decisions won't be made – they will get their deals away – but transactions have slowed down.' Uncertainty over how US tariffs will play out has been a big reason for some deals slowing. Brendan Traynor, a co-founder of Irish private equity fund Renatus, said when uncertainty hits the market, it becomes difficult to answer the 'hard questions' in M&A discussions with certainty. This hits some sectors more than others. In its Q1 M&A report, Renatus found that 132 deals had been completed, a 39pc increase from the previous year. However, they noted that uncertainties around global trade could negatively affect investment and slow down deal activity. Traynor said the figures did not reflect 'what is actually going on'. 'We are likely to see some slowdown given current macro tariffs and general uncertainty going into the remainder of the year,' he said. 'There are some sectors acutely affected by the tariff situation, where there's probably a tempering of activity, or a pause. In Ireland, principally, that is pharma and medical. Some in the drinks industry are coming in. That will have an impact on activity. 'More generally, the impact of Trump and tariffs are definitely delaying some deals. But it's all down to the level of exposure a business has.' Traynor said the 'soil conditions' were positive for M&A deals over the rest of the year, believing more clarity on tariffs will bring about a 'steep uplift in deals'. He highlighted strong activity in financial services, wealth management, veterinary, dental, and technology, with rollups playing out across the board. 'Nobody has a crystal ball on this,' he said. 'At this stage of the year, the deal market is on track with last year, but likely to take somewhat of a dip in the next quarter, picking up in Q3 and Q4.' Some involved in M&A have no plans to slow down, despite acknowledging signs of a lull. Laura Dillon, a partner with Dutch private equity group Waterland and head of its Irish unit, is looking for entrepreneurs who want to sell their businesses. Waterland is among Ireland's consolidators, acquiring domestic firms in the same sector – such as engineering, professional services, pharmaceutical packaging, and food – to create companies of scale. 'I think three or four of our portfolio companies currently have add-on acquisitions in due diligence at the moment,' said Dillon. 'We probably have a handful of companies that I'm feeling relatively positive about, but let's see if they will become the next platform for us. Hopefully, we will get more than one platform done. I'm feeling pretty positive we can get two or three platforms done later this year.' While Dillon is busy with Waterland, she had heard deals were 'definitely taking longer' and that 'people are quieter than they might like to be', especially regarding investments in America and from the US into Ireland. However, Dillon added that every period of volatility creates opportunity. She said her pipeline was 'probably the strongest it has ever been'. Uncertainty in the market has also created opportunities for Irish players looking to scale through acquisition. Colm Kelleher, boss of financial advisory firm LHK Group, said he had a couple of purchases in the pipeline he hopes to complete before the end of the year. Kelleher also spoke of uncertainty in the M&A market. In his sector – insurance and pensions – he felt some of the large private equity consolidators had slowed, and believes this was due to debt being expensive. Kelleher says he feels valuations have become more 'realistic'. 'I think what we have probably seen is a bigger disparity between what would be recognised as very good businesses and maybe businesses that aren't necessarily performing as strongly,' he said. 'Two years ago, nearly everything was getting a high valuation. There is a bigger delta coming in the values than we would have seen historically. 'Good businesses are still getting strong valuations,' he added. 'The cost of capital is higher. I think that is being reflected. "There is a riskier environment, and the cost of funding is higher. People are paying a lot more attention to due diligence'. All agreed the prospects for later this year were promising. Plenty of capital is waiting to be deployed. Fergal McAleavey, corporate finance partner at EY Ireland, said the volume and value of deals had been consistent with previous years. However, he acknowledged a lull a month ago. He noted Irish firms and private equity funds had raised a lot of capital and were preparing for acquisitions. 'Even alone in the last few months, there's been four companies that I can think of that have raised more than €100m of investment capital,' he said. 'A couple of years ago, if one company did that, it'd be huge news.' 'I think across the board, the noise that was in the system has gone out of it, and people who may have paused deliberately or slowed things down, that momentum is picking back up again.'
Yahoo
30-04-2025
- Business
- Yahoo
M&A is slowing in US but accelerating worldwide during new Trump era
US dealmaking is down in the new Trump era but accelerating in other parts of the world. The volume of announced US mergers and acquisitions as measured in dollar value fell 5.7% for the year through April 28, to $586.5 million, when compared with the same period last year, according to Dealogic data. That is the slowest start for US M&A in two years. On the other hand, deal volume outside of the US posted its best year to date result since 2022. Announced mergers in the rest of the world surged 43% in dollar value through April 28 from the same period a year ago, to $702 million. US dealmaking had a tepid stretch in April as President Trump's "Liberation Day" tariff announcement triggered widespread uncertainty about the economy and ushered in a period of extreme volatility for markets. Some companies put deals on hold as they waited for greater clarity about the path ahead. On April 9, the president paused many of the Liberation Day duties for 90 days to give countries time to negotiate new trade deals with the US. "M&A is like a barometer of business confidence, and people are feeling uncertain and the changes are very hard for boardrooms to work out," Lucinda Guthrie, head of data provider Mergermarket, told Yahoo Finance last week. "A number of processes have been pulled or paused" through April ahead of planned public announcements, Guthrie added. US M&A volume fell 8% during the month through April 28, according to Dealogic. Merger volume across the rest of the world gained 2%. The subdued start to 2025 is a disappointment for many on Wall Street who hoped the president's economic agenda would unleash a new dealmaking boom. Goldman CEO David Solomon told Bloomberg on Tuesday that "policy actions to date have raised the level of uncertainty to a degree that I don't think is healthy for investment and growth, and I think it's going to be important that we get more clarity." There have been signs of some activity, however. The two largest deals of the year so far — Alphabet's (GOOG) $32 billion agreement to acquire Wiz and Sycamore Partners' move to take Walgreens private — happened in March, according to Dealogic, as did eight of the other top 15 deals. And things did improve in February and March, before Trump's April 2 announcement. In fact, the merger advisory business at Goldman Sachs (GS), JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), and Morgan Stanley (MS) climbed 5% collectively during the first quarter from a year ago, to $2.8 billion. Some US corporations also don't have the luxury of waiting for trade policy to settle, forcing them to get more creative in deal structuring. Boeing (BA) last Tuesday announced plans to sell portions of its digital aviation software unit to private equity firm Thoma Bravo for $10.55 billion, all in cash. Earlier this month, US semiconductor firm Intel (INTC) announced plans to sell a 51% stake in its programmable chip unit, Altera, to private equity firm Silver Lake. Silver Lake is deferring $1 billion of the purchase to be paid out over the next two years, according to an SEC filing. "If the level of uncertainty grows from here, yes, you won't see the same amount of capital markets activity," Goldman's Solomon said during a Tuesday Bloomberg interview in Oslo, Norway. "But my own belief is things will settle down." David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance. Click here for in-depth analysis of the latest stock market news and events moving stock prices Sign in to access your portfolio
Axios
28-03-2025
- Business
- Axios
CoreWeave CEO calls IPO a "victory" despite shrunken size
The CEO of CoreWeave called the company's IPO an "unbelievable, overwhelming victory" despite selling fewer shares than originally intended at a lower price than hoped. Why it matters: The offering was seen as a bellwether, both for the health of the IPO market and the AI infrastructure segment — which has seen dramatic growth, but also hints that capacity may be getting ahead of demand. Driving the news: CoreWeave, which rents the graphics chips needed to run many AI tasks, started trading Friday after selling 37.5 million shares at $40 a piece. It raised $1.5 billion — over $1 billion less than it had recently been targeting. The shares closed flat at $40 Friday afternoon. "The company's first day issues are perhaps no surprise given heavy losses on the Nasdaq, but it marks a difficult moment for the US, and global, IPO market given the profile of the deal and the hope that surrounded it," Samuel Kerr, head of equity capital markets at Mergermarket, wrote in a note. What they're saying:"It would be silly to say we didn't want it to go larger or we didn't want [the stock price] to go higher," CEO Mike Intrator told Axios. But, he said, going public is key to having reliable access to the consistent funding the company needs to build out the computing infrastructure that clients are after. "Some people, they need more time to understand what is a fundamentally different business model," he said, noting that CoreWeave's business is more capital-intensive than many other kinds of tech companies. "We go out and we win a contract and then we go out into the debt lending syndicate and marry up those two contracts so there is an accretive contract that can pay off the debt. You can scale the business to enormous size." Yes, but: There have been mixed signals on the demand for that kind of AI infrastructure, with reports Microsoft is scaling back its plans with CoreWeave, and for its own data centers. Intrator acknowledged that "there is a narrative out there that there is too much capacity" but said that's not what he is seeing. "I continue to be in a position where I am unable to build enough infrastructure to deliver enough computing to sate the clients," he said. "I am sold out. I have been sold out and I'm not allowed to talk about what's coming next, but there is no indication that is going to ease up."
Reuters
28-03-2025
- Business
- Reuters
CoreWeave's retail appeal may be tempered by IPO timing, financial pressures
March 28 (Reuters) - Concerns sparked by CoreWeave's debt pile and other financial challenges may weigh on retail investor enthusiasm as it prepares to go public after what analysts said was a poorly timed IPO. The Nvidia-backed AI infrastructure company, which focuses on data centers and cloud services, is listing at a time when the equity markets are under pressure from tariff uncertainty and on rising concerns over the competition posed by China's artificial intelligence startup DeepSeek. Frustration is also mounting over when Big Tech's massive investments in AI will yield returns, leading to concerns CoreWeave may have missed the ideal window to list its shares. "It feels like the IPO was poorly timed. Had it floated a year ago, demand might have been much stronger than now as AI interest has started to wane," Dan Coatsworth, investment analyst at AJ Bell, said. The listing comes at a time when IPO-bound companies, even in the most high-profile sectors, have been under intense scrutiny. Despite a recovery, the IPO market is nowhere near the pandemic years when listings had soared. CoreWeave already suffered a setback on Thursday when it downsized its IPO. Under the new terms, it fetched a fully diluted valuation of around $23 billion compared with the $32 billion it was targeting earlier. "It's got a lot of risks. I don't know what is the long-term sustainability of the business," said Kamran Ansari, managing partner at Kapital Ventures. CoreWeave's revenue jumped more than eight-fold last year, but sustaining that growth will be critical. "There will be risks over the longer term around the company maintaining its impressive growth and not missing earnings estimates," said Samuel Kerr, head of equity capital markets at Mergermarket. CoreWeave had about $8 billion in debt as of last year. The company said earlier this month that it plans to use about $1 billion of the IPO proceeds to reduce debt. Some investors have also flagged concerns about the company's heavy reliance on Microsoft (MSFT.O), opens new tab, whose shifting AI data center strategy could impact long-term demand for chips known as graphics processing units, or GPUs. AI HYPE Top AI players have sparked massive interest from retail investors in recent years. Nvidia, Microsoft, Amazon (AMZN.O), opens new tab, Apple (AAPL.O), opens new tab and Alphabet (GOOGL.O), opens new tab were among the top 20 stocks drawing retail investor inflows in 2024, according to Vanda Research. Some experts have also brushed aside concerns stemming from DeepSeek, noting that heightened competition will drive more investment rather than leading to cutbacks. "AI remains a very hot investment theme despite doubts earlier this year following the emergence of DeepSeek," Mergermarket's Kerr said. Those seeking opportunities beyond the top tech names may back CoreWeave. Net inflows from retail investors into U.S. equities and exchange-traded funds totaled $69.8 billion as of March 25 this year, only slightly below the $71.7 billion invested in the final quarter of 2024, according to Vanda Research. "Retail investors will be drawn to (CoreWeave) as they continue to look for other avenues of returns away from the potentially lackluster performance of the MAG7 (Magnificent Seven) stocks," Josef Schuster, CEO of IPO research firm IPOX, said. The Magnificent Seven - a group of tech giants that have driven much of the stock market's gains in recent years - have been battered so far in 2025. CoreWeave did not immediately respond to a request for comment. It is set to debut later on Friday.
