Earlier this year, SPS discussed the 10 percent decline in closed M&A activity from the Q4 2014 to Q4 2015 period, as well as the 15 percent decline in closed activity from Q1 2015 to Q1 2016. We’re excited to refresh these calculations in the coming months to see if the trend has continued.
We’re data geeks, deriving meaning from various economic and market trends. Sifting through SPS market data, here is a quick profile of closed M&A transactions. Included below are two graphs that segment closed intermediated transactions by sector for the periods Q4 2014 – Q3 2015 and Q4 2015 – Q3 2016.
The sector profile of closed deals has remained consistent for the aforementioned period; however, there continues to be a downward trend across multiple industries. The largest declines stem from the Healthcare, Industrial and Financial sectors. Reviewing the numbers quickly: Healthcare deals have dropped from 563 in Q4 2014 – Q3 2015 to 501 in Q4 2015 – Q3 2016; Industrial transactions have declined by over 90 deals from 555 to 464; and Financial deals have dropped from 527 to 447 for the same period. Also worth noting, but not surprising, the Energy sector has continued its decline with 61 fewer deals for this period.
Generally, most sectors have remained relatively consistent or flat, with slight declines in Q4 2015 – Q3 2016. One interesting outlier is Consumer deals, which saw a small uptick from 258 closed deals in Q4 2014 – Q3 2015 to 265 closed deals in Q4 2015 – Q3 2016.
It’s always good to evaluate sector based trends and their potential impact on your deal sourcing approach. We will continue to crunch the numbers, and keep you posted.